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Welcome to Cointelegraph Market’s altcoin roundup, an in-depth newsletter that focuses on investing from a fundamental analysis perspective and seeking to identify emerging blockchain projects and tokens to meet the growing cryptocurrency Niche needs in the market.
For a long time, the concept of multi-sectoral investment has been advocated in traditional finance as a conventional method to establish a balanced investment portfolio. Typical configurations include representing stocks, government and corporate bonds, commodities, and real estate.
Now the cryptocurrency market has Growing into a trillion-dollar ecosystem With the emergence of many emerging assets, clear industries have begun to emerge. Smart cryptocurrency investors who want to apply portfolio diversification practices to their holdings should start paying attention.
This Summary of previous altcoins Discussed some top-level solutions and coins, such as Polkadot/DOT, Cosmos/atom And Solana/SOL have become more prominent in the past year, but these projects may also be included in the broader investment umbrella along with high-profile assets such as Bitcoin (Bitcoin), ether (Ethereum) And Cardano’s Have.
Once investors are sufficiently representative of blue-chip projects, they can consider other emerging areas such as decentralized finance (DeFi), oracles, and stablecoins.
DeFi: Uniswap, Aave and PancakeSwap
Decentralized finance emerged during the DeFi in the summer of 2020, and the industry helped start the current bull market by bringing new stimuli to the crypto ecosystem that needs the next major innovation.
According to data from Defi Llama, one of the best indicators used to prove the overall success of DeFi is the Total Value Lock (TVL) ranking, which reached a record high of 157.63 billion US dollars on May 14. Standing At the time of writing, it was $116.62 billion.
The release of Uniswap’s Decentralized Exchange (DEX) interface — enabling new projects to be launched immediately and offering tokens to the public — helped ignite a wave of growth and innovation across the market that continues to this day.
In less than a year, Uniswap has developed into a top DEX serving the crypto community. During the market sell-off on May 19, it set a historical record of USD 5.74 billion in 24-hour trading volume and locked a total of USD 5.37 billion. Trading volume. platform.
The large liquidity pool is the main attraction for investors who want to diversify their crypto portfolio. Through these pools, stakers have the ability to earn profits by providing liquidity to exchanges in exchange for part of the transaction fees. Many mining pools offer betting returns ranging from 25% to 2,000%, and traders can choose a mining pool based on various factors, including their risk appetite.
Although Uniswap leads the DEX, there are other options, such as Aave’s lending platform, which has become the DeFi protocol with the highest locked total value, with a TVL of more than $14.1 billion at the time of writing.
Aave recently decided Provide second level (L2) access on Polygon Brings renewable energy to the AAVE ecosystem because traders and liquidity are happy to migrate to the low-fee environment provided by Polygon. This has led to a significant increase in the TVL of AAVE and Polygon’s native token MATIC. MATIC is now the second-ranked agreement in TVL, which locks in $11.08 billion.
Each balanced investment portfolio also has a small portion of 1% to 5% reserved for high-risk assets. There is no shortage of high-risk, high-growth assets in the crypto market.
For token holders who are willing to take more risks in exchange for higher returns, PancakeSwap, based on Binance Smart Chain, has $7.67 billion in TVL, and provide According to the project’s website, the annual percentage rate (APR) is as high as 482.54%, and all rewards are paid in the agreement’s native CAKE tokens.
Stablecoins are the new “savings account”
Although fixed-value-linked tokens may not sound like the most attractive opportunity for investors, stablecoins have evolved to play a key role in the operation of the broader cryptocurrency ecosystem.
Stablecoins are often used as the backbone of trading pairs on centralized and decentralized exchanges, and provide traders with a simple way to lock in revenue.
The two most famous stablecoins are Tether (USDT) And U.S. dollar coins (USDC), their circulating supply is 60.9 billion U.S. dollars and 21.6 billion U.S. dollars respectively. Tether is currently the cryptocurrency with the largest trading volume, with a 24-hour trading volume ranging from US$100 billion to US$290 billion.
Other popular stablecoins include Binance Dollar (BUSD), a stablecoin created for use in the Binance Smart Chain ecosystem, and algorithm-controlled stablecoin DAI, which is collateralized by collateral on the Maker protocol Cast.
For those who want to earn a little extra income while the stablecoin is safe, there are many options, such as depositing tokens into lending protocols such as AAVE to earn up to 5% of deposits or decentralized stablecoin trading curve , Its return rate is as high as 50% for some stablecoin pools provided.
Other popular options include providing liquidity for various decentralized exchanges, such as PancakeSwap, which provides 8.64% liquidity for its DAI-BUSD liquidity pool, or QuickSwap, which provides 15.01% of its USDT-USDC pool per year. The rate of return rewards and fees, and its DAI-USDC pool is 26.75%.
oracle
In a world that is increasingly dominated by digital data, any cryptocurrency portfolio will be incomplete without access to oracle providers.These entities are heavyweights in the industry and promote Secure exchange of data and information In the cryptocurrency ecosystem and the broader financial market.
Currently, Chainlink is one of the most important oracle projects and a key participant. It includes a thriving open source community composed of data providers, node operators, smart contract developers, researchers, and security auditors.
We have passed half of May $ Link There are already 35 integrations!
I saw that this month easily broke the highest level of integration in history.
with #Chain You just won, in all possible ways.
View all Chainlink integrations at: https://t.co/vb2t14UStM pic.twitter.com/ERd2xgeDdc
— TheLinkMarine 2.0 (@TheLinkMarine1) May 18, 2021
Although the Chainlink network currently does not provide a direct way to obtain benefits through simplified pledge or governance mechanisms, token holders can easily hide it in DEX liquidity pools and DeFi protocols (such as Aave).
For investors who are not ready to trust decentralized exchanges and DeFi platforms, cryptocurrency investors who want to get returns from their holdings can also use centralized income-bearing companies such as Nexo, Celsius, and BlockFi.
Centralized exchanges such as Coinbase and Binance also provide direct staking functions. For example, investors can pledge BAND with up to 11.7% of APR in major exchanges.
Due to the May sell-off, the value of the cryptocurrency market exceeded US$1.2 trillion. Many top projects are now well below their historical highs, and the transaction prices are what some investors call “bargaining” prices.
in spite of Market participants are still uncertain As for where prices are heading in the short term, it is wise to investigate these opportunities as early as possible, because the well-known turbulent cryptocurrency market can undergo major changes in an instant.
Want to learn more about the diversification of the aforementioned projects?
The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading action involves risk, and you should conduct your own research when making a decision.
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