DeFi adoption is said to come in waves. In 2017, DeFi started with programmable money such as MakerDAO’s DAI and Bancor’s Automated Market Maker. In 2020, the DeFi space started to see governance tokens, user incentives, and asset management applications, among others.
And in 2021, the DeFi space exploded, increasing the stablecoin supply from $28 billion in 2020 to $152 billion. The total value locked (TVL) also grew by $200 billion from 2020 to 2021. Given that enormous capital is locked into it, the DeFi space is set for further expansion. The opportunities and revenue arising from DeFi will only increase from here.
The cryptocurrency market may be at a low point today, but it doesn’t matter much. Once the market sets itself in the direction of recovery, DeFi could have its next wave of adoption. DeFi solutions with innovative applications and a long-term perspective could rise above the rest. And we believe Uniglo (GLO), Aave (AAVE), and Curve (CRV) will benefit the most during the next wave of DeFi.
Uniglo is a Decentralized Autonomous Organization (DAO) protocol. It is community-based, placing its growth and the appreciation of its token, GLO, in the hands of investors. Essentially, Uniglo offers an investment opportunity for those who want to benefit from the gains of volatile cryptocurrencies but also wish to mitigate that volatility with more stable assets.
The protocol maintains a community-owned collection of assets called the Uniglo Asset Vault. It will build a treasury to purchase a range of digital and tangible assets that will back the value of GLO. All profits from selling assets will be reinvested toward buying more collectibles to drive capital appreciation.
The official launch of Uniglo is scheduled for October 18. Its first presale is also about to begin, enabling prospective investors to buy into this protocol early.
Aave is a DeFi solution for creating non-custodial liquidity markets. It offers a convenient system for lending where users can borrow a range of cryptocurrencies. The price of its token, AAVE, has been making consistent small gains. Most recently, the token surged by 45%, owing to the announcement of the platform to create a new US dollar-pegged stablecoin called GHO. As it becomes increasingly over-collateralized, Aave could expand its user base during the next wave of DeFi.
Similar to Aave, Curve facilitates lending services. It is an Ethereum-based exchange liquidity pool that enables low-risk and efficient stablecoin trading. Financing has been a hot topic because of the market conditions that are building toward a recession. As such, quick and easy lending services are at the forefront. The Curve protocol has been feeling the market’s need for lending and liquidity services, as it was one of the biggest price gainers during the first week of July–its price rallied by almost 40%.
DeFi developers are learning from the limitations and challenges they encountered in 2021, says Ryan Rasmussen, DeFi Research Analyst at Bitwise. They are likely also learning from the challenges posed by the current economic downturn. According to Rasmussen, these lessons will be the seeds of DeFi’s future success. That means investors better prepare for the DeFi opportunities that are coming down the pike.
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