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The blockchain industry is currently experiencing a global renaissance with the rise of decentralized finance (DeFi). Some industry reports in the recent past have suggested that the “hype” was over and enterprise blockchain solutions would replace retail-focused excitement, but this has clearly not been the case.
The recent DeFi movement has attracted hundreds and thousands of new market participants around the world to the technology, while also catching the attention of the large banking institutions that it was always meant to disrupt.
Currently, over USD 8 billion is locked in various DeFi applications, with live protocols producing real-time opportunities to achieve yields never before seen.
This hype and excitement has also brought back much needed capital and attention to the space, helping non-DeFi projects with real products launches. Here’s a roundup of some of the current trends shaping the blockchain industry, with insights provided by the companies and entrepreneurs currently paving the way.
Yield farming has been one of the most discussed trends of 2020, and for good reason. Farming has provided the opportunity to leverage idle assets to earn returns unmatched by any traditional bank.
But, yield farming is difficult and is currently being used only by the cryptocurrency-savvy.
To solve this, APY.Finance automates yield farming as a robo-advisor, simplifying the process. APY’s Founder Will Shahda explains “APY.Finance will connect with the latest DeFi protocols to route your funds to a portfolio of the latest-and-greatest yield farming strategies. This hands-off yet secure approach will be the perfect bridge for everyone to experience yield farming without the vast learning curve that is traditionally involved.”
Know-your-customer (KYC) and identity verification practices are slow, time-consuming and often invasive of the very privacy rights that blockchain users want when dealing with third-parties. The future of identity in the industry will solve this. Innovative products like aleph.im allow a seamless identity management solution that is focused on ease of use and privacy.
The aleph.im identity solution is developed in conjunction with industry leaders Synaps.io and Ledger. Jonathan Schemoul, founder, Aleph.im says, “The days of submitting KYC documents to multiple vendors are numbered, as the aleph.im solution allows users to tie documentation to their Ledger device and grant access to vendors in a secure environment.”
This year is a special one for decentralized exchanges (DEXs), as volume surpassed USD11 billion and outpaced volume figures at most large centralized exchanges. Unfortunately, this spike in popularity caused Ethereum gas prices to hit unprecedented levels, making DEXs exclusive rather than inclusive for portions of the community.
Polkastarter is trying to solve this by building a DEX for cross-chain token pools and auctions, helping lower costs and provide ultra-fast swaps. “Smooth interoperability between various networks is a key to success for DEXs and the industry as a whole. This is what we are aiming to solve with Polkastarter,” says founder Daniel Stockhaus.
The next generation of DeFi will find genuine mechanisms for shifting the balance of power away from network creators towards the community. Voting technology is the sought after key that unlocks a decentralised future. Governance voting is a way to bring cryptographically verified direct democracy to decentralised systems.
Finance.vote is at the cutting edge of governance innovation with a gamified quadratic voting based consensus system built for DeFi. It brings the ability to build influence on crypto networks, socially trade via consensus and get paid for researching the cryptospace. Founder Dr. Nick Almond describes, “Voting tools will open the possibility for decentralised financial systems to be led by their users and not just replicate, but generate new ways of managing money. We are building a fun way for users to discover and influence new projects in the crypto market.”
Crypto derivatives trading broke records in August 2020 with over USD 710 billion in transacted volume. This was around the same time DEXs hit similar record-breaking trading volumes. There is a clear demand for both derivatives and decentralized trading, but for long there was no mechanism connecting both. Injective Protocol is doing just that with its layer-2 decentralized exchange protocol.
Eric Chen¸ CEO, Injective Protocol describes this need as essential to the continued growth of DeFi. “Injective Protocol will give traders unparalleled access to new decentralized derivatives markets without any restrictions, gas fees or limitations.” Injective was incubated at Binance and expects their mainnet to go live in Q4 2020.
Decentralized Autonomous Organizations (DAOs)
DAOs are not a new phenomenon in the blockchain world but they are experiencing resurgence. Since 2019, the number of active DAOs is up 660 per cent, with governance tokens being at the core of this movement. It is important to note that the right governance structure is critical to ensuring a DAO can thrive and sustain itself for the foreseeable future.
With exactly this in mind, JP Mullin and Will Corkin launched MANTRA DAO, the largest and most prominent community-governed DeFi platform. Corkin explains, “Our goal was to create a truly decentralised and fair organisation that would allow our community to be in control and grow wealth together. In just a couple of months MANTRA DAO has built a global community of 17,000 people that truly believe in the concept of a DAO.”
Like other trends, staking is not new but is undergoing rapid innovation. A key difference between staking and farming is that the former is focused on long-term holders while the latter attracts opportunistic traders. The staking industry seems to have taken an interesting turn with the rise of startups like KIRA.
KIRA offers liquid staking via a Multi-Bonded Proof of Stake (MBPoS) consensus that allows users to stake and earn rewards from any asset, such as crypto, NFTs and fiat currencies. Milana Valmont, CEO, KIRA says, “We let users earn blocks and fee rewards from staking any digital asset on multiple chains at the same time. This is a major differentiator from more legacy Proof of Stake (PoS) staking options and one that is far more flexible and robust.”
Data shows that in the U.S, over 25 per cent of the population is either unbanked or underbanked. This has caused younger generations to seek solutions that are more seamless and easier on their pocket. Thankfully, mobile cryptocurrency payments can do exactly what banks can do, with the added benefits of little to no fees, quicker transactions and greater security.
MobiePay is at the forefront of this movement by offering consumers a universal payments and rewards ecosystem, all from the convenience of their phone. Founder Brandon Burgason describes, “MobiePay gives users the ability to exchange and use crypto for everyday purchases while incentivizing them with cash back rewards. For merchants, it will provide the chance to receive payments in cryptocurrency while instantly settling in cash and eliminating the risk for volatility while providing added convenience.”
Peer-to-peer encryption is a security standard used to secure communications between two people or devices. Though this is the standard protocol for many communications platforms, security experts say most are not truly secure.
Mask Network (formerly Maskbook) has built a browser extension that allows users to send encrypted messages, files and even cryptocurrency on top of any social network, such as Twitter. The company has even received an endorsement by Ethereum’s Vitalik Buterin for their work.
Suji Yan, founder, Mask Network explains “Mask Network will be a portal to the new internet where seamless secure communications and transactions can live on top of your most frequently used sites. From playing DApps to sending files, users will be in full control at all times.”