Decentralised Finance (DeFi) refers to financial systems enabled by blockchain technology that are often linked to Ethereum’s blockchain. Participants in DeFi can freely make secure transactions without the need for an intermediary, such as a regulatory organisation. Overall, the system’s efficiency inevitably allows people to shift away from conventional financial systems.
Several DeFi protocols, such as SushiSwap (SUSHI), Aave (AAVE), and Quitriam Finance (BARS), enable users to stake their cryptocurrencies and generate a passive revenue stream.
Currently, the total value of cryptocurrency held in worldwide DeFi markets increased from around $1.62 million in 2017 to $100.5 billion in October 2021. With the current political climate, this sum fell to $81 billion in January 2022.
Moving on, let’s now observe two decentralised protocols that have garnered substantial popularity in this field.
SushiSwap (SUSHI), a cryptocurrency and decentralised exchange, was established in August 2020.
The entire value locked on the SushiSwap (SUSHI) platform is around $2.2 billion, with a market valuation of nearly $800 million. The SUSHI token’s price has climbed by over 400% in the previous 16 months, yet it is still behind its all-time highs.
SushiSwap (SUSHI) is a cryptocurrency trading platform that allows users to swap cryptocurrencies. Smart contracts are used to conduct these deals. SushiSwap (SUSHI) provides liquidity pools in which users may lend their digital assets, a transaction known as Bitcoin (BTC) staking.
Unlike centralised exchanges like Coinbase, SushiSwap (SUSHI) does not need users to register an account. To trade, swap, lend or borrow cryptocurrency, you must link your wallet to the SushiSwap (SUSHI) application.
To trade on SushiSwap (SUSHI), you must have cryptocurrencies in your wallet since the DEX does not allow you to acquire digital assets using a debit or credit card. Moreover, SushiSwap (SUSHI) is a governance token as well.
It provides SUSHI token holders with the ability to vote on protocol development ideas. Furthermore, if you stake your token on the DEX, you will receive a portion of the exchange fees, broadening your revenue-producing possibilities.
Aave (AAVE), launched in 2020, is likely the world’s biggest DeFi protocol, with a total value locked of nearing $9 billion. The AAVE token has increased in value from its initial coin offering (ICO) price of about $1.75 to its current price of $236.48 as of writing.
Aave (AAVE) is the world’s 48th-largest cryptocurrency, with a market worth nearing $2 billion. It provides a broad range of goods to consumers, allowing Aave (AAVE) to rapidly extend its ecosystem in the past two years.
Assume an investor has invested $10,000 in Bitcoin (BTC). However, owing to a financial necessity, the user wishes to liquidate a portion of their investment.
As a result, the investor has the option of selling a piece of the BTC token or obtaining a personal line of credit from conventional banking partners.
In general, payday loan interest rates are high and are often criticised for being exploitative. As a result, investors may now pledge their cryptocurrency tokens on Aave (AAVE) and obtain a loan in the form of digital assets tied to the US dollar, such as DAI. The DAI may be transferred to a crypto-exchange, e.g. Coinbase and cashed out in fiat money.
Quitriam Finance (BARS) is a decentralised exchange that was newly released. Having just entered presale, it aims to compete and stand out in the metaverse with its multi-chain operability.
Quitriam Finance (BARS) is a savings and lending platform where depositors may earn interest on their pooled digital assets. Quitriam Finance has a governance token known as BARS that will give its holders voting power over various economic factors such as interest rate, inflation, and deflation level.
This will be a system that weighs the voting power of the BARS token holders in relation to specific measurable metrics. Therefore, increasing the likelihood of BARS token holders benefitting from various financial incentive schemes.
Quitriam Finance hopes to overcome the problem of other Ethereum-based decentralised exchanges by aiming to allow users to exchange tokens at a rate of more than 50,000 transactions per second at the cost of less than $0.00001 per transaction. Thus, enabling efficient and quick transactions.
To conclude, we can observe that DeFi protocols are expanding their product range and delivering financial services at a far cheaper cost than traditional forms of finance. With new projects forming and trying to adapt to the demands of the market, it may be lucrative to get in early in this new age of decentralised finance.
Always conduct proper research when dealing with pre-sales of currencies and tokens. The information above does not constitute investment advice by CryptoMode or its team, nor does it reflect the views of the website or its staff.
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