This growth is driven by a list of projects, most of which focus on specific financial services. Take the example of the Maker loan platform. MakerDAO is a decentralized credit platform on Ethereum that supports Dai, accounting for almost 30% of all total locked value. The same goes for rival lending platforms Compound, Aave and InstaDApp, not far from them. Another big player is the Synthetix derivatives platform, as is the automated portfolio manager Balancer.
An upward trend that we have seen in the market lately is the creation of ecosystems powered by an internal token / crypto. These ecosystems function as a hub where the project offers a range of different DeFi, both internal and third party. The idea is to allow retail investors to seamlessly enter the promising DeFi space.
Building a whole DeFi ecosystem
Once users take their first steps into a DeFi platform like LocalTrade’s DeFi Lab, they will need services to invest in and trust.
This is why the DeFi lab is just the start for Loя бы calTrade. This is the space where they will launch a series of in-house financial services that will be available according to their ambitious roadmap, including some of the most popular DeFi products on the market:
NeoBroker Smart-fund: This is a low-risk investment solution that offers users the opportunity to invest in shares of pre-IPO companies, thus becoming a co-owner of these companies.
This symbolic mode of investment is particularly interesting for small investors, who have systematically been unable to enter the venture capital market due to the high investment requirements and professional accreditation.
Tokenized stocks allow users, for as little as $ 10, to collectively buy stocks in the form of tokenized securities in private equity firms. Some of the success stories include Bitpanda, Smartbroker, and Trade Republic, among others.
LocalTrade plans to launch its NeoBroker Smart fund by the end of October. “The functionality is enabled through the use of a blockchain-based protocol powered by Ambisafe. This regulation-friendly protocol allows us to create smart contracts that fully automate the workflow, making it more transparent and efficient, ”the company commented.
Yield Farming Protocol: arguably the biggest growth driver in the DeFi industry. This means the practice of staking or lending crypto assets in order to generate high returns or rewards in the form of additional cryptocurrency. This innovative solution has recently gained popularity with other innovations such as cash mining, providing liquidity on DEXs through liquidity pools; staking assets in PoS-based DeFi projects for validator rewards; and more recently, providing assets as collateral for loans. All of these services have been confirmed as possible at LocalTrade.
Sale of tokens / ICO: this is the issuance of tokens in exchange for another cryptocurrency. Token sales are also known as the initial coin offering. Businesses normally use token sales to raise funds and as an internal investment solution.
LocalTrade recently launched the first round of its LTT token sale. The token will be used by users to operate within LocalTrade and the company will use it to fund other DeFi projects. The sale officially started on September 20 and will run for a month until October 20. It can be bought for as little as $ 0.10 in this first round A. So far the token sale has been successful, reaching 60% of the original sell outlook.
DeFi Wallet: DeFi Wallets are internal tools that help users store their assets securely, even when they are disconnected from the internet. These wallets help users to easily interact with DeFi services offered on the platform and with protocols, as well as to exchange cryptoassets in a flexible way.
“In order to foster the adoption of decentralized financial services by the masses, LocalTrade has launched a DeFi Wallet, a smart multi-currency wallet application that provides a sleek interface and an intuitive gateway to decentralized finance,” the company said.
Launchpad: Launchpads are platforms that allow investors to purchase new cryptocurrency projects before tokens are made public. These products require deep knowledge and expertise as they are high risk projects. Launchpads are usually operated by a crypto exchange or a different project dedicated for this purpose.
LocalTrade’s own IDO platform – their launching pad – will be created to help innovative teams launch their projects and gain global exposure and reach. “Our mission is to encourage blockchain adoption globally and to support and promote cryptocurrency projects through the Launchpad,” the company commented.
Still in its infancy, DeFi is a whole new sub-segment of the cryptocurrency market. In short, decentralized finance deals with financial instruments that are effectively used with the help of emerging blockchain technology. The DeFi ecosystem, like the traditional financial ecosystem, provides similar products and services but in a truly digital, blockchain-based way.
This article was written in collaboration with Tanvir Zafar