Cryptocurrency projects that look to have long-term success in the ecosystem will need to innovate protocols and solve the biggest issues facing the crypto community.
Recent developments such as Arbitrum, Optimism, and a bridge to the Avalanche ecosystem now enable fast, low-cost transactions that benefit the decentralized finance (DeFi) ecosystem while also allowing small- to medium-sized investors to take advantage of opportunities.
The growth in the total value locked (TVL) on protocols indicates that DeFi is one of the fastest-growing sectors in the crypto economy, according to data from Token Terminal. The biggest gains occurred on cross-chain protocols and layer-two protocols with lower fees last week.
There are two projects in the top six of the above list that are found within the Avalanche network. Since the launch of an upgraded cross-chain bridge that lets Ethereum-based tokens and applications migrate to the Avalanche system, the network has seen significant inflows.
Additionally, the governance features of Alchemix Finance and Rari Capital have demonstrated a positive contribution to boosting new growth for projects as they are engaged in implementing changes to their ecosystems and increasing community participation.
Decentralized leveraged exchanges and layer-one projects thrive
As regulators crack down on centralized exchanges that offer derivatives services and have lax Know Your Customer and Anti-Money Laundering requirements, Token Terminal data shows the growing strength of derivatives and options trading protocols.
dYdX and Hegic, two protocols that offer trading on-chain options and decentralized derivatives, gained the most revenue in the past week, as shown in the chart above.
In recent months, global regulators have intensified their scrutiny of leveraged and derivative trading platforms, while established exchanges, such as Coinbase, have applied for futures trading licenses, suggesting that cryptocurrencies will continue to grow as the market matures.
Furthermore, DYdX operates on layer-two technology developed in conjunction with StarkWare, enabling cross-margin perpetuals with no gas costs and minimal trading fees.
Several Ethereum-competitors, such as Tezos and Cosmos, have seen their revenue increase over the past week, suggesting that the layer-one battle has heated up as Ethereum’s high fees continue to encourage users to use other blockchains.
Note: This article expresses only the author’s opinion. Trading and investing involves risk, so research should always be conducted before making a decision.