The advent of the decentralized financial sector (DeFi) was a fixed address until 2021, and today hundreds of billions of dollars in cryptocurrency are secured by protocols across multiple blockchain networks and generate income for the owners.
What started as a simple Ethereum-based exchange interface that allowed the decentralized exchange of ERC-20 tokens, called Uniswap, has grown into a large ecosystem filled with decentralized exchanges, profit farms, lending protocols, and gaming platforms.
As the development and consolidation of old protocols continues, new projects are emerging that contain more elements from the traditional financial arena to the DeFi arena, as digital technology is gradually changing the global financial system.
There are several ways in which users can participate in DeFi, in addition to simply investing in liquidity pools or making a deposit using the lending protocol.
Decentralized derivatives trading
Cryptocurrency derivatives exchange has always been a target of regulators, and at one point daring exchanges like BitMEX and Binance were forced to follow the will of the law and change the way they conduct business as they sought a more legal position.
This increased the need for cryptocurrency traders for a decentralized alternative and led to the creation of protocols such as dYdX and Hegic that provide similar services without a target, a centralized structure for regulators.
DYdX is a non-secure perpetual trading platform built on the Layer 2 protocol that runs on the Ethereum network, giving users access to a tenfold increase in futures contracts for more than twenty cryptocurrencies.
Hegic is an online options trading protocol that uses hedging contracts and liquidity pools to offer options contracts for up to 90 days and can be paid back in Ether (ETH), Bitcoin (WBTC) or US Dollars (USDC).
Both platforms allow users to access these advanced trading products without having to reveal their identities, as is required for central peers.
Binding, Rebase, and Ultra High APY Tokens
One of the topics that is increasingly appearing in economic discussions is the concept of creating a decentralized reserve currency, free from the control of any country or central financial institution.
Olympus aims to solve this issue with its Decentralized Independent Regulatory Organization (DAO) platform that offers various gaming and bond offerings, including the ability to link Ether, MakerDAO (DAI), US Dollar liquidity (LUSD), and Frax (FRAX).
The linkage process at Olympus is a cross between an interest rate product and an alternative futures contract. The bonds are provided with an offer that outlines the terms of the agreement for a future date and includes a predetermined amount of their OHM protocol token that farmers will receive after the vesting period expires.
Funds raised from the bond offering go to Olympus Treasury as collateral to back the minted OHM token, helping provide the underlying value of the OHM token so that it can be used as a reserve or exchange currency.
The only other projects that have a vault that provides base value for each token is stacked coins, but as the name suggests, the price is fixed, while the price of OHM can go up, providing a new source of revenue for users.
Once the link is complete, users can sell their OHM devices on the open market or opt for the Olympus protocol with a current return of 7299%.
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Participation in the audience environment in Polkadot and Kusama
Another way that cryptocurrency holders can leverage their assets while helping to expand the cryptocurrency ecosystem is by participating in umbrella auctions in the Polkadot and Kusama ecosystems through a process called crowdsourcing.
During the auction, several projects compete for one of the limited canopy tracks that connect the project directly to the Kusma or Polkadot mainnet, facilitating the connection of all canopies in the ecosystem.
Through the Crdloans game, users who own their KSM and DOT tokens can “put” them into the pool the project uses to secure the parachute path, and their tokens will be returned to them after a certain period of ban or peg, which can last up to a year One.