The Decentralized Finance (DeFi) market seems to have reclaimed its bullish status in the ongoing crypto market rally as Bitcoin edges closer to its All-time high (ATH) around the $20,000 mark. While BTC is considered ‘King’ of the industry, DeFi coins have yielded more returns compared to the flagship cryptocurrency in recent weeks. Some coins have rallied close to 10x, replicating the summer DeFi craze although this time only blue-chip projects have managed such highs.
Currently, the Total Value Locked (TVL) in DeFi stands over $14 billion according to metrics from DeFi pulse. With innovation happening at a lightning speed, this space has grown significantly to become an emerging niche in the crypto market. Most of this growth can be attributed to participation incentives which include lucrative yields for liquidity provision on decentralized exchanges (DEXes) like Uniswap and Sushiswap.
For perspective, DeFi innovations seek to decentralize traditional finance by integrating the products in today’s markets with protocols built on a blockchain network like Ethereum. Being at the early stages, projects within this field have come up with ways to boost participation hence the rise of DeFi yield farms and governance tokens.
DeFi Yield Farms
The concept of yield farming became popular this summer as DeFi governance tokens made a debut in the crypto space. At inception, early adopters were getting yields as high as 10,000% for staking liquidity on various Uniswap pools. However, this figure has reduced over time given the growing participation in DeFi yield farms and the whole ecosystem in general.
For a moment, the DeFi craze seemed to have died down as markets toppled in September and yield farms started closing shops or what is now famously dubbed ‘rug pulling’ by the crypto community. Well, prevailing DeFi market stats have disapproved this narrative; in fact, there are still some active DeFi yield farms whose governance tokens are rallying alongside the ‘King’ in this bull market.
One such ecosystem is the OnigiriSwap project whose fundamentals are based on Ethereum’s DeFi network. This innovation rewards liquidity stakers on Uniswap with its governance token ‘$ONIGIRI’; the native digital asset is built to play a pivotal role within the OnigiriSwap Automated Market Maker (AMM) protocol.
OnigiriSwap and the $ONIGIRI Token
OnigiriSwap derives this name from the unpretentious Japanese rice ball delicacy known as ‘Onigiri’; anyone can stake on this DeFi AMM protocol to earn $ONIGIRI tokens as rewards. Per the current Menu on OnigiriSwap farms, stakers can yield as much as 1800% annually for providing Uniswap liquidity in a particular pool. This can be done through several crypto pairs which include ETH, USD and MakerDAO’s stablecoin, DAI.
The yields which are harvested in $ONIGIRI governance tokens come with a range of benefits to the farmers that provide liquidity. For starters, holders have a say in Onigiri’s future through the voting rights attributed to this governance token. Also, they are set to receive transaction fees that accrue within the OnigiriSwap network as incentive rewards for staking.
Onigiri’s governance token distribution is based on a deflationary model to preserve the value of $ONIGIRI tokens as the project grows bigger. Basically, early stakers yield more compared to liquidity providers that will join much later in the project. This DeFi innovation has also implemented a two-week interval lock period for developer funds in an effort to protect stakers from typical rug pulls.
A Fast Growing Ecosystem
DeFi has proven to be a ‘moon’ niche in the crypto ecosystem despite critics that the craze was over after the recent bull market. This space is now shifting to integrate more advanced innovations such as Non-fungible tokens (NFTs) and sophisticated derivative options. Binance CEO, Chao Zhao, is of the opinion that DeFi is here to stay,
“… I think DeFi is here to stay. Even now, with Bitcoin’s popularity rising again, DeFi is still popular. We think there is a lot of growth potential in DeFi.”
Another example is DeFi Million. This project runs a native ERC-20 token dubbed ‘DEMI’ which is currently in the private sale round. Investors who acquire this digital asset prior to its public launch could gain as much as 50% given that the price will trade higher than in the private sale. DEMI is set to be listed in prominent crypto marketplaces including Uniswap, Hotbit and Coingecko.
The DeFi niche is gradually distinguishing itself amongst the emerging crypto trends; both fundamentally and in terms of the speculative market cycle. Recent stats have revealed that this sector is still very bullish and could potentially run alongside BTC for some time. On the flip side, a repeat of the triple-digit gains is also a possibility in this burgeoning market. Should this happen, blue chip projects whose value proposition stands out are more likely to take the day!