Amid increased interest in decentralized finance (DeFi), associated crypto coins have garnered much attentiveness over the last week. The infinite possibilities inherent in DeFi has investors looking at crypto coins that can facilitate the growth within this industry. Over the last 24 hours, various coins have gained heavily, jumping to new highs. Coins such as ZRX, COMP, and KNC have managed to climb in value, underlying the persistent desire within the crypto world for an expansion of DeFi applications.
What is DeFi?
Decentralized finance is synonymous with cryptocurrency and the systems that tie it all together. Essentially, an umbrella term, DeFi refers to all the applications that blockchain – and subsequent cryptocurrencies – can facilitate. It’s a new take on what has been in effect for centuries. The ability of blockchain and crypto coins to process, monitor, and safeguard transactions is much higher than what we’ve become accustomed to. Within traditional financial institutions, it has been noted that efficiency has not always been their strongest attribute.
Blockchain, due to the fact that there are several entities in play, has the ability to rid itself of a centralized source. This means that all financial activities, such as making online payments, are not controlled by a standard payment authority. Ultimately, the move toward DeFi allows users to interact within a far more versatile platform, all the while cutting out the middleman.
What next for DeFi development?
DeFi applications focus on several different fields. However, one of the most exciting prospects looks at smart contracts and the functions that these contracts serve. In short, smart contracts operate on lending platforms, providing financial services without individuals having to interact with an intermediary. Another type of DeFi application which has stoked the fire, is what is known as ‘prediction markets’. This type of application looks at providing markets for predicting future events. Much the same as other standard platforms, the ability to remove the middleman may well appeal to a large subset of the population.
Keep An Eye Out For These Crypto Coins
In the past day or two, COMP (Compound governance token) scaled new heights by hitting $500. This equated to a 40% increase in value for the month-to-date. In the last 24 hours, the token has risen in value by 20% – a sign that investors are showing interest. XRZ, a token that hails from a decentralized exchange called Ox, has also set a new record by reaching $1.149. This represents a 60% increase based on the last 24 hours of trading.
With several more in tow, it is abundantly clear that major players are beginning to sit up and take note of the scaling and revenue potential of DeFi applications. Much of this is being followed on decentralized exchanges and alternative solutions. It will be interesting to see what happens in the first quarter of 2021, especially if DeFi applications come to the fore.