Reviewing The Best Business Models in DeFi and Getting Deeper in IT
Have you been a part of the cryptocurrency world for a while? Then you may have heard of many business models focused on DeFi, diving deeper into the IT approaches to introduce unique solutions in the crypto marketplace. For example, NeoFi is one of India’s best cryptocurrency exchanges focusing on making your investment experience easy. But is that all to its reliable and trusted platform? And what are other unique, efficient, and emerging business models in DeFi?
Let’s explore all that below in detail:
What is DeFi?
First, let’s understand the concept, approaches, and working of a DeFi.
So Decentralized Finance (DeFi) combines traditional financial services with decentralized technology, such as blockchain, and crucially, Defi may be implemented on the Ethereum blockchain platform. It plays a significant role in the evolution of the financial industry. It aims to create alternatives to every financial service, including savings and checking accounts, loans, asset trading, and insurance. Users can easily engage with this ecosystem through P2P and Dapps.
It primarily involves a smart contract, a virtual contract constructed on the blockchain platform for immutability and security. It is quicker, simpler, and reduces the risk for both parties.
As the top best business models on DeFi in our list, NeoFI is a crypto-investment solution designed to automatically help every scale investor diversify their investment portfolio and risks. NeoFi relies on NeoFi baskets to help investors invest in their preferred niche with a single click.
NeoFI has been working to onboard a billion users to the cryptocurrency space since its launch. The project believes that its efforts will revolutionize the world of cryptocurrencies and level the playing field in the market by offering more tools to retail investors in the market. Learn more about the project at https://neofi.app/.
- Curated Crypto Portfolios:
NeoFi’s product offering consists of curated long-only cryptocurrency portfolios that can be invested in with a single click.
- Your Individual Portfolio:
The website lets you simulate your portfolio to professional traders and venture capitalists. These products and techniques for investing emphasize on experiences that have been established, polished, and put into practice by skilled traders, hedge funds, and other organizations of a similar nature. However, the program also allows you to create your individualized portfolio, which you may do on your own if you want to strike out.
- Actively Managed Portfolios:
An additional fascinating feature of these portfolios is that seasoned asset managers continue to exercise oversight, and an algorithm continually re-balances the portfolio to reflect shifts in the market. Both of these features contribute to the portfolios’ overall attractiveness.
- The Token:
The $NeoFI token is the most substantial component of the entire ecosystem. The development team has made the token useful by providing fee reductions and an enhanced annual percentage yield (APY) on staking and savings products.
Compound is a significant DeFi Platform. This platform lends tokens and offers collateral borrowing of money in the market. It deals with cryptocurrencies and digital blockchain-based assets, with no need for third parties. Furthermore, smart contracts manage this network’s money market.
Compound Finance’s cTokens are redeemable tokens that represent a liquidity pool. Having said that, ETH is converted to cETH if deposited into the protocol. Litecoin (LTC) deposits result in cLTC.
- COMP Token:
COMP token is another Compound token used as a governance token to make suggestions and vote on the platform’s direction.
Users can earn 42% of the 10 million COMP tokens. 2,312 COMP coins are issued per day to markets in a fixed allotment. Liquidity providers and borrowers split the COMP supply 50:50. Voting and other governance activities on Compound earn COMPs.
Dharma is a peer-to-peer (P2P) network that lets people lend and borrow money from each other. It is built on the Ethereum blockchain. As collateral, USDC and ETH can be used on this platform. However, the interest rate could be different for each coin. Moreover, it lets people lend and borrow coins for 90 days at a fixed interest rate.
- Invest in Vaults via Yearn:
Yearn is another Dharma yield protocol. Here, however, assets are employed for “yield farming.” Yearn aggregates Aave, Compound, and Curve methods to get the optimum asset yield.
Yearn utilizes yield-boosting methods. On Compound, lending USDC earns you $COMP tokens. Now, if you deposited by yourself, you’d claim these benefits once or twice a year to minimize transaction fees. Using Yearn for various methods due to deposit tokens is more complex, but you can get vault tokens in-app via Uniswap.
- Lending on Aave and Compound:
Deposit your tokens in Dharma’s lending pools to earn interest. When you deposit tokens, you receive cTokens (compound) or aTokens (Aave), representing a claim to your tokens and immediately earning interest. Dharma is easier than Compound or Aave via Metamask.
Aave and Compound lend only some assets. Only USDC, USDT, Gemini USD, WBTC, SUSHI, YFI, AAVE, and others.
- Swap any Ethereum-based Token:
You can only buy the tokens listed on exchanges like Coinbase. Every week, new DeFi projects featuring governance tokens are released. However, coin listings on controlled crypto exchanges can delay new initiatives. But with Dharma’s Uniswap integration, you can access over 50'000 Ethereum-based tokens.
Nexus Mutual is developing Ethereum-based decentralized insurance. This Nexus Mutual is initially debuting with smart contract coverage and allowing anyone to obtain insurance on any public Ethereum smart contract. This enables DeFi customers to secure insurance for their cash quickly.
Nexus Mutual is a registered investment firm that provides various financial products, such as mutual funds, variable annuities, and individual retirement accounts.
Nexus Mutual has a long history of serving its consumers with superior products and services.
Nexus Mutual emphasizes assisting its customers in reaching their financial objectives.
According to you, which business model in Defi will continue to stand firm in the blockchain industry in the coming times?