Bitcoin at an ATH? Check. Institutional liquidity entering the market? Check. All that’s left now is to focus on the future of decentralized finance (DeFi).
As the narrative shifts towards real-world assets (RWAs) tokenization and the integration of traditional finance (TradFi) into DeFi, there are a number of thriving DeFi projects you should keep an eye on.
Here we highlight the top three DeFi projects that are set to deliver true innovation, user-optimized experience, and the most impact to the future of the DeFi space.
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Encore: DeFi Made Easy
Encore immediately sets itself a head above the rest by delivering accessible DeFi to users globally — no matter their comprehension of DeFi. It does this by providing a user-friendly suite of decentralized applications (dApps) geared towards dismantling the complex nature of DeFi.
Encore hosts a plethora of key features that set it apart, including dynamic APY Staking, a multichain/crosschain decentralized exchange (DEX), and community governance.
Building the foundation of Encore, over 22% of total token supply is injected into staking rewards — reflecting the project’s dedication to its staking community. Utilizing a dynamic APY mechanism, Encore staking rewards users with higher gains the earlier and the more they stake on the platform.
Solidifying the framework of the project, Encore’s multichain/crosschain DEX facilitates effective DeFi interoperability between blockchains without users having to provide further liquidity. Instead, Encore uses existing DEX liquidity to ensure users experience effortless trading of assets without the hefty transaction fees.
Cementing the project’s future, Encore features a decentralized autonomous organization (DAO) which stays true to the principles of DeFi — ensuring decision-making and project governance rests in the hands of the community that builds it. This democratic effect allows users to submit proposals and vote on initiatives driven by the community towards a better future for Encore.
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Chainlink: Blockchain Meets Real-World Data
Chainlink, as suggestive of its name, provides the important connecting link between real-world data and blockchain technology. This DeFi project establishes a decentralized oracle network that facilitates the secure connection between off-chain data and services to on-chain smart contracts.
By providing the integration of real-world data feeds, Chainlink expands upon the applicability and functionality of blockchain applications via their tamper-proof oracle network. This ensures data provided remains reliable, transparent via blockchain technology, and keeps up to date with consistent changes in the data transmitted. One such example could be the price of a cryptocurrency, which changes constantly amid the volatility of wavering market sentiment.
Additionally, Chainlink’s decentralization of its oracle network ensures the network remains secure. Run by independent node operators, the decentralized oracle network continues to thrive through incentivized rewarding of accurate data with the Chainlink’s native token, LINK. This efficient data provision process ensures the integrity of data on DeFi applications such as automated market makers (AMMs) and yield-farming platforms.
Polkadot: A Better DeFi Multi-Chain Blockchain
Well-known and well-established, Polkadot tackles two main barriers to effective blockchain optimization — future scalability and interoperability.
Built around multiple parallel chains (parachains) and a central relay chain (CRC), Polkadot’s design makes it possible for blockchains to interact independently through the CRC, enabling cross-chain data and token transfers. While improving interoperability between blockchains, this process also grants parachains the ability to specialize towards specific applications and use cases.
Like Encore, Polkadot also features an on-chain model of governance that places the onus of network upgrades decision-making on the community. This approach ensures inclusivity, attestation to DeFi principles, and ensures that the network evolves with the necessity for hard forks as its community needs change over time.
Additionally, Polkadot employs a Cross-Chain Message Passing (XCMP) protocol. XCMP is designed to facilitate both interaction and direct communication between Polkadot’s parachains — without the need to go through the CRC. This adds further to the potential scalability of the project.
Conclusion
Encore, Chainlink, and Polkadot all function as fundamental gears within the ever-growing DeFi machine — each with their own part to play.
As these three DeFi projects continue to progress side-by-side in the DeFi space, their advancements in innovation further secure their place as the top competitors in a more accessible and transparent future.
