The number of decentralized finance startups tokenizing real world assets is expanding as the market and demand to trade them continues to grow.
One of the largest potential applications of blockchain and digital assets is the ability to tokenize real-world assets, allowing users and investors to send, receive, and exchange the ownership rights to physical goods just as easily as making a crypto transaction. That being said, the DeFi boom in the third quarter of 2020 saw an explosion of new liquidity farming platforms, plus a couple that made investing in and transferring tokenized real world assets so much easier.
Australian-founded Synthetix is the current market leader in “synths” or tokenized assets. The protocol was launched in February 2019 after rebranding from stablecoin project Havven. Synthetix has a native token called SNX with which holders can lock in collateral to earn staking or liquidity provider rewards.
It is currently the seventh largest DeFi protocol with a total value locked of $1.75 billion, according to Defipulse.com. It has over 40 synths from inverse tokens which allow users to short assets, to fiat currencies, to commodities, to stock index tokens. It uses Chainlink price oracles to maintain accurate prices for its tokenized assets.
Synthetix has also been one of the first to launch a Layer 2-based exchange using Optimistic, an Ethereum L2 solutions provider.
Unbound Finance is a recently launched protocol that can be used to mint assets by locking up liquidity pool tokens (LPTs) in smart contracts. LP tokens are provided by automated market makers when users lock up assets as liquidity. They represent a portion of the particular liquidity pool and can be used on other platforms to earn greater returns.
Unbound has taken LPTs a step further by allowing users to increase their potential earnings by unlocking liquidity in the form of stablecoins.
The protocol is currently working on building derivative products for LP tokens. In short, a synthetic stablecoin backed by them, as acknowledged by Zilliqa president, Amrit Kummer.
Coincidentally, @shashxxx and @tmjaswani reached out to me regarding @unboundfinance. They’ve been working on building derivative products for LP tokens — in short a synthetic stablecoin backed by LP tokens. $ZIL community would love to have you on @zilliqa someday. Good luck!
— Amrit Kummer (@maqstik) January 7, 2021
Unbound has recently partnered with TomoChain and LuaSwap and is working to integrate Uniswap, Bancor, Curve Finance, Balancer, and SushiSwap, several of which are already operating on its testnet, launched in December 2020.
– Provide liquidity on LuaSwap ➡️ Earn fees & $LUA
– Deposit LuaSwap LP tokens on Unbound ➡️ Unlock that liquidity in the form of stable coins
Nothing like putting our assets to work pic.twitter.com/pi6DDL3rBB
— Kyn | TomoChain – CBDO (@kynchaturvedi) January 6, 2021
AllianceBlock has the aim of creating the first globally compliant decentralized capital market, by providing a regulated bridge between the realms of traditional finance and DeFi. It is building something called the Data Tunnel, which will be the first of a number of products that will simplify compliance with financial regulations.
Developed in partnership with Ocean Protocol, the Data Tunnel will provide organizations simplified access to valuable bank data compliant with open banking regulations such as current KYC information.
The aim of the ecosystem is to ultimately allow traditional firms and investors to easily gain access to structured digital assets and crypto products. AllianceBlock also intends to allow firms to easily launch their own regulation-compliant crypto derivative products which can represent real world assets such as physical property, security tokens, and crypto portfolios.
A prototype was developed in December 2020, and the Proof of Concept is scheduled for the end of January, with the full-featured v1.0 to be released in May 2021.
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