DeFi or “decentralized finance” is the term we use for crypto-enabled apps built on the Ethereum blockchain, aiming to disrupt traditional financial services.
The space has gone “wild” since the launch of the Ethereum network in 2015, increasing by 30X per year. DeFi space is valued now at $108 billion with an average rate of $10 billion assets traded in a 24 hours timeline.
People rush into DeFi due to decentralization, meaning more efficiency and transparency at a lower cost, without transaction intermediaries and institutional oversight. DeFi is about having control of your assets, and being able to trade on-chain has significant advantages, such as security and transparency, since the transactions can’t be altered once they are verified and recorded on the network. Also, this crypto space creates the perfect playground for developers to create unique products that everyone can access.
For average users, the most common road to DeFi is through MetaMask, a virtual wallet built on Ethereum. ConsenSys, the company behind MetaMask, saw an increase of 420% of active users in the last 7 months with more than 21 mils. of active users.
The numbers are not lying, the DeFi sector is growing every day in size and valuation, and now that top Venture Capital firms are jumping in, the space is becoming more normalized.
Let’s take a look at the top DeFi projects and review a hidden perpetual exchange with big plans in store for 2022.
We know about Avalanche (AVAX) because it’s the best project on DeFi and one of the largest cryptocurrencies by market capitalization, sitting at around $24,3 billion. AVAX is a giant ecosystem of exchanges, wallets, and marketplaces, having the fastest smart contracts platform in the DeFi space and the most validators securing the protocol.
Close to Avalanche, we have the most popular and easy-to-use exchange, Uniswap (UNI), which has the most variety of ERC-20 tokens. Being a top exchange, Uniswap is valued at $10 billion and is the place where you can easily swap a variety of crypto assets at the lowest fees.
Big projects like Avalanche and Uniswap are already up a lot since the beginning of the year. Even though there is enough space for growth, the real value ahead will be in the projects that will challenge the current status quo and deliver additional value for their users and token stakers.
Have you heard about the GMX perpetual exchange?
GMX is not your average crypto trading platform, it’s a hybrid decentralized exchange on Arbitrum and Binance Smart Chain that distributes all trading fees to protocol stakers that hold GMX (the governance token) or GLP (the liquidity token). Getting back a % of the fees while trading and swapping coins look like a great idea for attracting and retaining new investors.
Regarding usability, on GMX you can easily swap or leverage trade (up to 30X) with no slippage and no liquidation wicks, thanks to the Chainlink oracle price feed.
The platform UI is easy-to-use, even for beginners, and the community around GMX is friendly and helpful; even an NFT fan collection is set to lunch in early December, featuring the GMX mascot, blueberries.
The fact that GMX has only been live since September and has generated around $7,8 mils in fees, had caught the attention of large investors and research companies. One venture capital firm set a price target for the GMX tokens at $130 for 2022 and $521 at the end of 2023.
At the moment, GMX is sitting at a low market cap of $220 million and has big plans in store for deploying on a 3rd chain (Avalanche), we are looking forward to what 2022 will bring for GMX and the DeFi space.