Gain Exposure To Decentralised Finance in 2022 With Maker (MKR), THORChain (RUNE), and Pac-Man Frog (PAC)
Decentralised finance, also known as DeFi, is an emerging field within finance that has been garnering increasing attention over the past years.
What is DeFi?
In essence, DeFi seeks to create a more inclusive financial system by enabling anyone to access basic financial services such as lending, borrowing, insurance, and more. This is done by replacing centralised intermediaries, such as banks, insurance companies, or brokers, by blockchain-based and trustless smart contracts.
DeFi automatises financial processes, in turn creating an all-around more efficient financial system for everyone.
Some see traditional and decentralised finance as mortal enemies. But in fact, traditional and decentralised finance can very well coexist harmoniously – DeFi can be simply understood as an additional layer to the existing financial system: it integrates it but complexifies it.
As a result, the DeFi space already went through a strong period of growth over the past year, and is bound to continue growing at an exponential rate as more and more people enter this space.
Following are three cryptocurrencies that can be interesting investments for those who want to be exposed to the emergence of DeFi in following years.
Maker (MKR) was one of the very first DeFi projects to come into existence and it has since established itself as a major name in the field.
Founded in 2017, Maker is the company that brought DAI , the world’s first decentralised US dollar-pegged stablecoin, to life.
The majority of “conventional” stablecoins, such as Tether (USDT), are governed by a central authority, but DAI is decentralised in that it is controlled by its community.
As the world’s first decentralised USD-pegged stablecoin, DAI has seen tremendous success, and its popularity continues to increase at an head-spinning rate.
MKR is the native cryptocurrency of the Maker ecosystem, and it is Ethereum-based. MKR contains governance characteristics, granting its holders the ability to vote on matters such as the evolution of the Maker DAO and the direction in which the project is going in the future.
Maker, the project behind the world’s most used DeFi stablecoin, cannot help but set high expectations given its existing track record and the spectacular growth of the DeFi space expected in the months and years to come.
MKR therefore appears as a very solid investment for those seeking exposure to DeFi.
Built using the Cosmos SDK (software development kit), THORChain (RUNE) is a cross-chain liquidity protocol that lets users exchange and transfer cryptocurrencies across several different blockchains.
As a decentralised protocol, THORChain enables its users to retain full custody of their assets, unlike other centralised exchanges such as Coinbase or Binance that centralise their users’ private keys. This improves transaction efficiency and speed but undermines users’ freedom and autonomy, which is what cryptocurrencies were originally built for.
As such, decentralised solutions such as THORChain are called “non-custodial”, as the company does not keep custody of investors’ assets.
Concretely, THORChain developed Bifröst Protocol, a cross-chain bridge that connects to several blockchains and allows users to transfer cryptocurrencies to them. Therefore, THORChain is working towards the increasingly discussed topic of blockchain interoperability.
Blockchain interoperability is an ideal that aims at connecting independent blockchains together and making them able to communicate and interact together, in order to create a vast interconnected blockchain universe.
THORChain boasted less than $10 million in total value locked (TVL) back in July 2021, a figure that is now standing at about $450 million – a 4,400% increase in less than a year! THORChain is growing at a very fast pace and there are no signs of it stopping anytime soon.
Having achieved a market cap of around $2.5 billion now, THORChain has secured its spot within the top 50 largest projects, making it a must-be in any crypto investor’s watchlist.
Besides, THORChain’s native currency, RUNE, can be used to provide liquidity (i.e. locking RUNE tokens in specific liquidity pools to help secure the network), which allows users to generate additional returns by receiving a fee from every RUNE transaction.
RUNE is now trading at $7.49, notably lower than a year ago when it was trading in the $13 range. This may indicate an interesting window opportunity for investors looking to start a position in this project.
Pac-Man Frog (PAC)
Pac-Man Frog (PAC) is an early-stage project in its presale phase that aims to create a Solana-based decentralised community and be at the forefront of Web 3.0 developments.
Pac-Man Frog aspires to build a one-stop-shop platform that will centralise DeFi, gaming, and NFTs in a single ecosystem. Pac-Man Frog’s whitepaper describes a dynamic ecosystem that, amongst other things, will include an NFT aggregator, a gaming NFT marketplace, and an NFT launchpad aimed at helping emerging artists.
Additionally, Pac-Man Frog hopes to make early-stage investing more accessible to the general public. In its roadmap, Pac-Man Frog mentioned the creation of a dedicated incubator destined to support burgeoning and innovative blockchain-based gaming entrepreneurs and startups.
This incubator will provide innovators with access to funding and the opportunity to network with professionals of the space and other similar projects.
Pac-Man Frog’s token, PAC, will include a governance mechanism that will enable users to express their opinion regarding the project’s evolution.
PAC is expected to be listed in the coming weeks, a critical moment for the Pac-Man Frog team. You can access additional information about Pac-Man Frog on its website, linked below!