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Defi Projects That Will Succeed 101
Source: Adobe / bestforbest

The Decentralized Finance (DeFi) ecosystem went through an exponential rise this year, rising from $1 billion to $11 billion in 2020. Many investors have greatly profited from this sudden and unexpected rise, participating in all sorts of token swapping and yield farming protocols. However, the good times could last only so long.

In the end, a majority of investors who held onto their new DeFi tokens lost their money. These overhyped projects lost their value as quickly as they gained them. Therefore, a lot of people within the community are disappointed in what happened, comparing the DeFi boom to the ICO era of 2017. But there is no reason to despair yet. Hype rarely works with strong projects that have long-term value and there are plenty of DeFi projects that will succeed.

In this article, we will show you some of the best DeFi protocols in the market. They might not be too popular right now, but they are doing the right thing. Instead of focusing on marketing, they are silently developing their projects. So let’s begin by discussing some of the most notable ones.

AnySwap

Anyswap is a DEX with token swapping and yield farming capabilities that launched in July. Working quietly ever since the highly skilled team of developers introduced several features since the protocol’s inception. Notably, Anyswap added new liquidity pools (LP) and support for new blockchain ecosystems, including the Binance Smart Chain.

The DEX is popular for its implementation of the Fusion network, which helped increase transaction speed and lower fees. As Ethereum-based DeFi platforms are notorious for their high gas fees, Anyswap decided to solve the issue by implementing fees that are up to 100000 times lower. As a result, everyone can participate in LPs on Anyswap no matter their portfolio size. Since Ethereum’s gas fees would at times cost up to $100 per one single transaction, it was impossible for smaller accounts to leverage the new yield farming technology.

One more feature that Fusion brings to Anyswap is the Decentralized Control Rights Management (DCRM) technology. The feature securely stores your assets cross-chain with the help of sharding, which makes it impossible for hackers to steal your crypto.

Another neat feature is the Decentralized Cross-Chain Bridge. As the name implies, this is a cross-chain option that enables a user to send coins and tokens to Anyswap using multiple blockchain networks, making it more accessible.

At the time of writing, Anyswap offers six liquidity pools. These include FSN, ANY, BTC, USDT, ETH, and UNI. To farm, users have to provide liquidity via the Fusion (FSN) token. In return, they receive the aforementioned tokens in a wrapped form, prefixed with the letter ‘a’. These minted tokens can be swapped for their ‘true form,’ for example aETH can be swapped for ETH.

Anyswap liquidity rewards

Saved for last, we have the most interesting feature. Anyswap hosts the ANY native governance token. With the token, holders can vote for new proposals and LPs. Moreover, each holder receives ANY tokens when providing liquidity, up to 10k ANY per day on average. The reward distribution structure on average rewards LP participants with a 927% APY on ANY pools and 159% on non-ANY pools.

As developers resume to work on Anyswap, users can expect more and more liquidity pools. The team plans to feature XRP and LTC LPs in the near future. And as we already mentioned, ANY holders can also propose other kinds of pools.

SushiSwap

SushiSwap

SushiSwap is an infamous token swapping DEX known for its extremely controversial past. The project started out as a ‘vampire protocol,’ practically stealing liquidity from Uniswap. A week into the project’s launch, the protocol already ‘crashed’ as the community became deeply angered by the founder’s decision.

However, the entire situation changed for the better as a new administration and team of developers replaced the founder. Today, Sushiswap is one of the top DeFi protocols that have a major chance to succeed. Since the first controversy, the team kept a low-profile and worked diligently on the protocol. After finally reaching a bottom, in terms of key metrics such as volume and liquidity, experts believe that Sushiswap is ready to finally bounce.

The greatest decision that the new developers made was to make it a completely decentralized protocol. Therefore, all of the decisions turned into community proposals. If anything were to be featured on the protocol, the community of SUSHI holders would have to approve it first. While this may be experimental as the token’s distribution is uneven, it still turned out to be a wise decision. In the meantime, the team delivered major changes to the platform, including a redesigned website and user interface.

Another major feature of SushiSwap is that the DEX has a weekly menu. What does this mean? Essentially, a special set of liquidity pools changes each week. Therefore, users are incentivized to vote for the most profitable LPs. By doing so, the community does not have to worry that a part of the users will migrate to other protocols that have better pools. With the weekly menu, SUSHI holders can vote for the most desirable LPs to keep everyone at SushiSwap.

The only issue with the protocol is that it has problems attracting new users. Due to the controversy, a majority of yield farmers left for good. Based on data from DeFi Pulse, the aggregator shows that the number of collateralized assets on SushiSwap decreased significantly. On September 12, the protocol hosted $1.42 billion in crypto. Today, it hosts only $281 million in collateral. While the metric appears to be slowly recovering, it is questionable if SushiSwap will ever recover its past glory.

CREAM Finance

CREAM Finance

Cream Finance is another respectable DeFi protocol that has the chance to become a top-10 product. Similarly to SushiSwap, Cream Finance also forked from another popular DeFi project called Compound Finance. However, Cream Finance is not just a copycat. In the past months, the team worked hard on delivering new products and services within the Cream ecosystem.

Cream Finance is a blockchain agnostic and decentralized P2P trading protocol that bridges liquidity between numerous assets. Users can supply assets to Cream Finance in the form of collateral to borrow other assets supported by the platform. Most notably, the developers listed tokens that are relevant in DeFi, including USDT, USDC, BUSD, COMP, BAL, YFI, LEND, CREAM, SUSHI, and many others. The platform continuously integrates new liquidity pools, making it one of the largest platforms in terms of supported tokens.

Just as most DeFi protocols, Cream Finance also has a governance token called CREAM. Apart from governance proposals, users can also stake CREAM tokens for accumulation. The developers offer fixed contracts that range from one full year to four years. Rewards are calculated for each block, accounting for the user’s number of CREAM tokens divided by the total number of staked CREAM tokens.

However, the staked tokens cannot be controlled at all until the contract ends, making it a very tricky decision for holders. While on one hand, they have the chance to radically increase their portfolio size, they are forced to wait for a long time period. Moreover, these tokens cannot be used for governance and voting for the entire staking duration. Since the protocol is heavily decentralized, there is also no way for developers to unlock the tokens on-demand.

All in all, CREAM Finance is a great DeFi protocol with plenty of LPs and opportunities. However, the features themselves are a bit limited and staking is heavily constricted by decentralization. Nevertheless, with the help of a great community and experienced developers this DeFi protocol can turn into a valuable project in the future.

Final Word

Investors both won and lost a lot of money during the recent DeFi craze. On that account, capital preservation is the most important risk control tool they can use. To do that, token swappers and yield farmers must look forward to less hype-oriented DeFi projects and care more for protocols with organic growth.

In this article, we mentioned three DeFi projects that will succeed in the future. All of them have their positive and negative sides and it is for you to decide which one suits your needs. For example, while Anyswap may have a better reward structure and more secure custodian solution, Cream Finance has a far better list of supported tokens. Likewise, SushiSwap is a great option since liquidity pools are voted for on a weekly basis. However, its deeply troubling past may influence SushiSwap long-term.

Now that you better understand these healthy protocols, it is time to ‘do your own research’ and find out more about them by joining their respective communities, reading whitepapers, audits, and everything else that an expert investor must do. But keep in mind, if you lost money on hyped DeFi tokens in the past, you must choose wisely and pick only the best!

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