DeFi remains the most exciting and fastest-growing financial sector globally. Despite heavy negative pressure on asset prices due to the FED’s recent positioning. Ray Dalio, American billionaire and hedge fund manager, stated that stock prices could fall another 20% if the FED raises interest rates to 4.5%.
Digital assets will suffer more punishment due to their classification as risk-on assets, as liquidity leaps towards ‘safer’ investment options such as bonds. However, Uniglo (GLO) and Aave (AAVE) continue to push the boundaries of what is possible within DeFi and attract liquidity in the process. Whilst established DeFi giant Curve (CRV) scrambles to stay relevant with its new stablecoin.
Uniglo (GLO)
Uniglo offers investors a viable long-term store of value. This simple idea requires complex mechanisms and is only possible by utilizing the programmability of blockchain technology. Market participants who saved fiat will have seen the value of their savings decimated, and with the American stock market of such a great size no longer offering returns that outpace inflation, investors are stuck.
Uniglo’s tokenomics include buy and sell taxes, and this revenue stream is compounded into value for investors. A portion is used to acquire assets, both physical and digital. Through diversification, Uniglo hedges against market downturn, even holding assets such as fine art, typically unaffected by market performance. An additional part is used in what the Uniglo whitepaper titles the Ultra Burn Mechanism, with 2% of each transaction burnt. This hyper-aggressive burning strategy will see a constantly appreciating valuation for each GLO token as their total supply dwindles.
Aave (AAVE)
Aave is one of the largest decentralized lending protocols and has pushed forward the real-world use case for DeFi more than most protocols. Permissionless loans allow anyone with crypto assets to collateralise them and take out a loan instantly.
But recently, Aave has pushed the boundaries even further. The DAO recently approved the release of GHO, a yield-generating stablecoin. Investors can mint GHO against collateralised cryptos whilst still receiving interest payments on the supplied collateral introducing layered earnings. This pioneering move is another excellent example of why Aave has become such a favorite amongst DeFi investors
Curve (CRV)
Curve Finance benefitted immensely from the market downturn as more investors moved into stablecoins and continued to use the platform to generate yield.
But now, investors are fleeing even further up the risk ladder and moving out of stablecoins into government debt. Even Curve’s newest venture, crvUSD, a stablecoin, is failing to bring liquidity back to the protocol.
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