Decentralized Finance (DeFi) has been all the talk within the crypto world recently. CoinMarketCap’s introduction of a dedicated exclusively to DeFi projects confirmed the status of Decentralized Finance as the most dynamically expanding branches of blockchain technology.
It’s enough to say that currently 27 out of top 100 cryptocurrencies with the highest market cap are DeFi projects, with the most popular one being Chainlink at #6 and soon to likely surpass Bitcoin Cash and become the first DeFi coin to enter the top 5 of the most capitalized cryptocurrencies on the market.
Before we go any further, let’s get back to the basics and quickly recap what exactly is Decentralized Finance, or DeFi as it’s more commonly known. To put it simply, DeFi aims to recreate the well-known, time-tested, traditional financial instruments in a fully decentralized architecture, removing the need of trusted third parties such as companies and governments.
Though some people say that the original cryptocurrencies like Bitcoin and Ethereum were technically the first DeFi solutions, it’s much more common to associate Decentralized Finance with more advanced blockchain applications such as stablecoins or decentralized exchanges.
With the DeFi ecosystem on the rise, more and more investors are wondering which DeFi to invest in and looking for undervalued DeFi projects that are likely to moon in the near future. Since the DeFi market’s capitalization has jumped in value from 1 billion to almost 7 billion in just 4 months many people are starting to think whether or not it’s now too late to invest in Decentralized Finance.
Luckily there are still many DeFi projects that are greatly undervalued and from this article, you will learn exactly which are the top 5 most interesting undervalued DeFi projects to watch.
1. Anyswap
is a new Open-Source, fully decentralized cross-chain swap protocol built on Fusion chain and powered by Fusion’s DCRM technology (Distributed Control Rights Management) with automated pricing and liquidity system. It enables fully decentralized and secure swaps between any coins on any blockchain that uses ECDSA or EdDSA signature algorithms, including BTC, ETH, USDT, XRP, LTC, FSN, ERC20 tokens and many other coins.
Anyswap offers many advantages over competing solutions such as the currently still more popular Uniswap, such as providing its users with a utility and governance that allows voting rights enabling holders to choose the coins that will be listed next. Expanded functionality of Anyswap supports many features like Decentralized Cross-Chain Bridge (depositing any coin into the protocol in a decentralized way), Cross-Chain Swaps (immediately swapping one coin for another) and Programmed Pricing and Liquidity (programmed pricing system enabling a liquidity provider to add and withdraw liquidity into swap pair).
At the moment of its launch in July 2020, Anyswap became the first fully decentralized platform that does cross-chain swaps. From the very beginning, it provided enhanced functionality and advanced solutions, which together with the extremely low fee of only 0.4% for every swap transaction made it quickly rise in value. But by far the best feature of Anyswap for investors who look for massively undervalued DeFi projects to watch is its constant, fast rate of development that guarantees future growth in price. Transparent governance and the goal of including the support for 95% of all existing cryptocurrencies, Anyswap is pretty much destined to quickly expand its market capitalization.
What distinguishes Anyswap from other DeFi projects is the fact that it’s built on very strong fundamentals, such as its strategic partnership with one of the major exchanges that is Hotbit, which decided to provide Anyswap with USD $1,000,000 worth of liquidity for the mutual construction of DeFi ecosystem. A strategic partnership of this rank is a major statement from Anyswap and proves that it’s a very serious project that can soon become one of the most important players within the Decentralized Finance ecosystem. Given these facts it’s not surprising that Anyswap has an amazing Annual Percentage Yield of 469%.
Let’s not forget about that fact that will be the most interesting to investors looking for DeFi projects to invest in – Anyswap was launched in July and has only been around for a few months now, which means that it’s currently at the crucial stage of adoption when it’s expected to quickly jump in price any moment now – it might be the last chance to invest in Anyswap while it’s still so cheap and before it gets fully noticed by the general crypto audience.
With many new features and partnerships to be added soon, Anyswap is definitely one of the most massively undervalued DeFi projects that’s expected to greatly rise in value in the very near future.
2. Band Protocol
is a project that aims to create a secure, scalable, blockchain-agnostic decentralized oracle – a complex cross-chain data oracle platform solution that enables aggregating and connecting real-world data and APIs to smart contracts. Band Protocol hopes to offer an enhancement of the usual smart contract functionalities by granting them efficient and secure access to reliable data without requiring any central points of failure that could serve as potential vulnerabilities.
Band Protocol’s flexible oracle design enables developers to easily use any data such as data relating to sports, weather, real-world events, random numbers, and many more. One of the most prominent and interesting features of BandChain is its design focus on compatibility with all the most popular smart contract and blockchain development frameworks, which assures a steady rate of expansion and the ease of further evolution of the platform.
Although due to its rather niche application BandProtocol doesn’t seem to have as much potential as more universally revolutionary and more undervalued DeFi projects such as Anyswap, it is still a very interesting Decentralized Finance solution that should be on every serious investor’s list of DeFi projects to watch.
3. Augur
is a project that aims to disrupt the current online betting ecosystem with a blockchain-based prediction market. Augur’s goal is building a fully transparent exchange with no limit on what people can bet on, no max limits on the amount people can bet, and no rollover requirements. The Augur platform is a peer-to-peer, decentralized, Ethereum-based exchange that attracts its users through low fees that let them keep more of their winnings than any other prediction market.
One of the more interesting possible applications of Augur is countering the spread of fake news. With fake news being a hot topic in the modern era, a platform providing a solution to it should have the attention of any investor. The solution offered by Augur is a blockchain-based prediction market that can be used to counterbalance the spread of incorrect information on social media by providing people with a financial incentive to distinguish the truth from misinformation, all while using blockchain technology to give the users a high level of protection guaranteed by pseudonymity and decentralization.
Though Augur has been around for some time and doesn’t have an Annual Percentage Yield as impressively high as Anyswap, it’s still an interesting DeFi project to invest in thanks to its real-life use case as well as using Decentralized Finance to capitalize the very attractive niche that is prediction markets.
4. UMA
is an innovative protocol designed for building synthetic assets by enabling its users to easily write self-enforcing smart contracts equipped with economic guarantees. UMA aims to enhance the financial solutions made possible by permissionless, public blockchains such as Ethereum with enhanced functionalities introduced by the use of concepts borrowed from traditional fiat financial derivatives.
Unlike the traditional derivatives, UMA smart contracts are designed to be secured with economic incentives alone, which makes them self-enforcing and universally accessible.
With the UMA Open Source protocol, any two counterparties can easily develop and create their own financial contracts. Solutions possible to be designed with UMA include synthetic ERC20 tokens that can track the price of any item, decentralized crypto futures representing levered exposure, interest-paying Ethereum yield curves, and many more.
UMA is promising to be one of the projects aiming to explore the truly exciting possibilities of Decentralized Finance in new and creative ways. Although it’s a platform that’s still in a rather early stage of development, high potential usability and many different use cases definitely make UMA one of the DeFi projects to watch in 2020.
5. Loopring
is a zkRollup exchange and payment protocol that allows anyone to build high-throughput, non-custodial, and order book based exchanges on the Ethereum network with the use of Zero-Knowledge Proofs. The solution provided by Loopring is an Open Source, independently audited, and non-custodial exchange protocol that powers highly scalable decentralized exchanges through batch-processing a great number of requests off-chain while providing verifiably correct execution through Zero-Knowledge Proofs.
Loopring platform mainly consists of Loopring Exchange, which is a decentralized trading platform built on top of Loopring 3.0. The interesting part of the Loopring Exchange is the fact that it performs most of the operations, including trade settlement and order matching, of the Ethereum blockchain. This type of design aims to dramatically reduce gas consumption and by extension also the overall settlement cost of transactions to only fractions of a cent.
Though Loopring is a very interesting DeFi project to invest in, it placed last on our top 5 list due to not being as exciting as other projects such as Anyswap. A direct comparison of the two projects could show why: while Loopring only supports software wallets such as MetaMask, Anyswap also supports hardware wallets like Ledger. And most importantly, while Loopring uses the Ethereum network, Anyswap is built with the newer, more advanced and still undervalued solution that is Fusion.
Conclusion
Let’s get back to the questions that we started this article with: are DeFi projects still worth investing in, and if so, which DeFi to invest in?
The answer to this should be simple after we have looked at some of the most exciting undervalued DeFi projects. Only from the outside is Decentralized Finance may seem like an oversaturated market – if we analyze projects one by one and look at the technical details it becomes clear that there is still a lot of untapped potential and many opportunities for investors capable of picking the right project.
A quick look at the list of top 5 undervalued DeFi projects is enough to prove why Decentralized Finance is considered to be one of the most exciting applications of blockchain technology.
DeFi elevates blockchain above the level of traditional cryptocurrencies by providing a vast array of expanded functionalities. From exploiting niches such as prediction markets and data oracle platforms to complex solutions that like Anyswap aim to disrupt and improve the entire decentralized exchanges ecosystem – Decentralized Finance surely takes blockchain technology to the next level.
Many potential investors seem to think that the world of Decentralized Finance has already reached its limits – after all, over 25% of the top 100 list at CoinMarketCap are DeFi projects. Nothing could be further from the truth – an objective look at the DeFi ecosystem in particular as well as the blockchain ecosystem in general proves that Decentralized Finance is still far away from reaching its full potential.
It’s very possible that we are still very early on when it comes to the rate of DeFi adoption, and while most crypto investors have already accepted that Decentralized Finance is the future of blockchain technology, some are starting to ask: is DeFi the future of finance in general?
is a project that aims to create a secure, scalable, blockchain-agnostic decentralized oracle – a complex cross-chain data oracle platform solution that enables aggregating and connecting real-world data and APIs to smart contracts. Band Protocol hopes to offer an enhancement of the usual smart contract functionalities by granting them efficient and secure access to reliable data without requiring any central points of failure that could serve as potential vulnerabilities.
