Decentralised Finance, also known as DeFi, has been booming over the last two years.
DeFi’s fundamental philosophy lies in replacing unnecessary intermediaries in the traditional financial system with smart contracts in order to automate operations and enable more people to access basic financial services worldwide.
This article will go over three DeFi projects with strong long-term potential, one of which has just recently launched – Mithril Finance (BARS). Stay tuned!
With the explosion in popularity of the crypto space since 2021, DeFi has also been attracting increasing attention. Whilst DeFi hasn’t become mainstream yet, more and more investors are entering this space every day.
That is mostly the consequence of innovative and fast-growing financial applications that are being developed within that space. In fact, the DeFi market’s total value has been more than doubling every year since 2017.
Aave (AAVE) is a DeFi platform that aims at democratising access to lending and borrowing by leveraging cryptocurrencies’ decentralised nature.
Originally named ETHLend when it was founded back in 2017, the project renamed itself Aave a year later, taking its inspiration from the Finnish word for ‘ghost’. In fact, Aave features a cute-looking ghost as the project’s mascot.
Aave’s platform allows its users to either pool their crypto assets so that they can be borrowed by other users; or borrow cryptocurrencies by depositing collateral that varies depending on the cryptocurrency being deposited. All these services can be accessed in a matter of minutes and through easy-to-follow steps.
Therefore, Aave’s platform facilitates access to liquidity for people worldwide, without credit screening or lengthy administrative processes. This appears particularly useful for populations that struggle to access loans in the traditional system, or in regions with unstable national currencies such as Turkey or Russia.
Aave is definitely a blue-chip project in the DeFi space. The beginner-friendliness of its platform certainly contributed to its booming popularity. As DeFi applications continue to increase in popularity and expand, AAVE appears as a solid long-term investment.
Mithril Finance (BARS)
Mithril Finance (BARS) is a DeFi project that has yet to prove its worth but has the potential to become a strong player in the field. Having recently launched, it’s worth keeping an eye on it!
Inspired by the fantastic universe created by J.R.R. Tolkien in Lord of the Rings, ‘mithril’ refers to the fictional, silver-looking metal used to create swords, armours, and other objects with extraordinary abilities.
Similarly to Aave (AAVE), Mithril Finance aims to create a decentralised lending platform where users can deposit their crypto assets and earn interest on them.
BARS will be Mithril Finance’s native currency. Mithril Finance also developed its own US-pegged stablecoin: MC. A stablecoin is a cryptocurrency that is pegged to a real-world fiat currency. In Mithril Finance’s case, one MC is supposed to always be worth one US dollar.
Mithril Finance also aims at creating a Decentralised Autonomous Organisation (DAO): the Mithril Finance Foundation. The Foundation will be managed by MC token holders, who will be able to use the voting rights conferred by their MC tokens to voice their opinion regarding Mithril Finance’s future developments.
Mithril was famed for its strength and longevity, let’s hope Mithril Finance displays similar characteristics!
Maker (MKR) is one of the very first DeFi projects in existence and has now become a leading name in space.
Maker is the organisation behind DAI, the first decentralised US-dollar-pegged stablecoin launched in 2017.
Most “traditional” stablecoin are controlled by a central entity, such as Tether (USDT) for instance, while DAI is controlled by its community.
As the first decentralised USD-pegged stablecoin, DAI experienced massive success and its adoption keeps growing at a very fast pace.
Deployed on the Ethereum (ETH) blockchain, MKR is the native token of the Maker ecosystem. MKR also possesses governance features, giving its holders voting rights over decisions regarding the evolution of the Maker DAO and the direction taken by the project.
DeFi’s explosive expansion cannot help but create high expectations for Maker as the organisation behind this space’s leading stablecoin.