The Rise of DeFi Unicorns in 2020
2020 was a whirlwind year for decentralized finance (DeFi) protocols, with several projects soaring to unicorn status as they rode the crypto wave. This surge saw some reaching the coveted $1 billion valuation, reminiscent of the initial coin offering boom of 2017. And while many of us were still trying to make sense of what a ‘Unicorn’ is (hint: it’s not a mythical creature), some protocols proved that they weren’t just paper tigers.
Cameron Winklevoss Weighs In
Crypto mogul Cameron Winklevoss, co-founder of Gemini, shared his two cents in September, pointing out the stark difference between 2020 and the early ICO frenzy: “Back then, money was raised on shitcoin white papers written in coffee shops. DeFi is already live and working in the wild.” Wise words, indeed! His message was clear: while 2017 was filled with vaporware, 2020’s DeFi advancements came locked and loaded with actual working models generating returns.
Spotlight on Star Performers
Aave: The Lending Giant
Aave rose like a phoenix from the ashes of the crypto market, hitting $1 billion in market capitalization in 2020. But, it wasn’t all sunshine and rainbows for Aave; a flash loan exploit threatened its unicorn status more than once. However, coming through with an Electronic Money Institution license from the UK Financial Conduct Authority shot the AAVE token into the spotlight — a match made in crypto heaven!
Yearn.finance: The Yield Aggregator
Yearn.finance’s YFI token was the belle of the ball, hitting a $1 billion market cap in August. Yet, just like that cousin at family reunions who monopolizes all the attention and disappears, YFI has struggled to maintain its unicorn status since. Still, it’s worth noting that Yearn is a yield aggregator that found a niche by swooping in to help liquidity providers earn interest through smart contracts – quite the clever move!
Synthetix: Not Your Average Exchange
Synthetix took a unique approach to the decentralized exchange space by trading “Synths” instead of typical crypto assets. In August, it crossed the $1 billion mark in total value locked, and its SNX token skyrocketed, showcasing a meteoric rise by over 400% within the year. Who said synthetics can’t also be fabulous?
The Pitfalls of Rapid Growth
Harvest Finance: A Flash in the Pan
Talk about a short-lived party! After cranking out $1 billion in total value locked, Harvest Finance fell victim to a malicious hack resulting in a hefty $24 million loss. So much for the highs of yield farming when a bad actor can come in to spoil the fun. But on a brighter note, like Yearn, they also assisted users in generating interest on their crypto assets!
Beyond DeFi: The Decentralized Landscape
2020 was a year of extraordinary valuations across the blockchain spectrum. For instance, Chainalysis quickly climbed to a valuation exceeding $1 billion with robust investigative tools that keep blockchain activities in check. Meanwhile, Bitcoin and Ether’s price rally created fertile ground for new DeFi projects, adding to the unicorn party.
Special Mentions: The Ones That Took Flight
Finally, we saw a couple of newcomers flashing their unicorn badges! Filecoin made waves before experiencing a dramatic plunge, once hitting a market cap of over $1 billion, only to retract nearly 80%. And Polkadot, with its DOT token rapidly climbing over $5 billion, proved that while Ethereum continues to hold its ground, other networks are also making their play in the decentralized arena.
+ There are no comments
Add yours