DeFi Matures as NFTs explode on Ethereum

Week In Review | Week #5, 2021 | by Ilya Abugov

This was an exciting week for the crypto industry. ETH has broken $1600, and project teams delivered updates and launches in large quantities. DeFi continues to expand with projects passing $37B in TVL, which comes with the regular dose of gas cost concerns.

However, Hashmasks, a new digital collectibles project, have stolen the headlines and captivated the industry’s attention. The gaming and collectibles and art sectors are growing and are becoming an integral part of the market.

Source: DappRadar

Another action-packed week for the Yearn ecosystem

The projects in the network appear to be enjoying the start of the year. There were two big releases this week. Alpha Homora launched V2 and will be supercharging leveraged yield farming using CREAM’s Iron Bank. SusiSwap’s launched its MISO product, offering a smoother IDO experience for projects.

Source: Twitter

With each team focused on developing specific products the Yearn ecosystem has quickly grown into a synergetic behemoth capable of offering a wide suite of solutions for DeFi users. All of the products have not yet been brought under one interface, but the vision appears to be clear.

The YFI minting question has also been resolved. 6,666 new YFI tokens will be minted, and 2,222 of that will be distributed to leading contributors. The process will be coordinated by the Compensation Working Group. This should enable the Yearn project to keep its core developers properly incentivized and defend the ecosystem against talent poachers.

All of this excitement doesn’t even include the random snapshots dropped by Andre Cronje that may be hints of new products and features. The Yearn ecosystem looks to be leading the DeFi pack at the moment.

Source: Twitter

The search for options continues

The decentralized options market is a lucrative segment and will become more attractive as the DeFi sector grows. Recently, Opyn raised $6.7M in a Series A funding round and will look to be a major competitor in this segment. The project recently launched the V2 of its platform, introducing Gamma Protocol and switching to European options as part of a major upgrade.

Another player in the segment, Hegic, also had some major news, with the launch of H2M on hetoro. Somewhat similar to Yearn, Hegic utilizes an ecosystem approach and encourages applications and tools to be built around the core Hegic product.

Source: hetoro

A secondary market was a much-desired utility within the community and may become an important stepping stone for the ecosystem. It will be interesting to watch its development, as it may offer lessons to projects utilizing pools and intending to give their users greater flexibility.

EOS comes to Ethereum

Despite remaining a top-20 project by capitalization, EOS has had a tough time finding itself in the evolving crypto industry. It has mostly been left out of the DeFi wave, and while it maintains several dapps atop the gaming rankings, most of the headlines have gone to non-EOS projects.

Source: DappRadar

Now, the pNetwork will enable wrapped EOS, offering connectivity between Ethereum and its rival network. This may open up opportunities for the EOS ecosystem to benefit from the growing Ethereum DeFi sector, and perhaps give game developers additional incentive to try working with EOS.

It remains to be seen whether the development will have any effect on EOS. However, given the number of networks that have seen their native currencies come to Ethereum’s ecosystem in wrapped form, the number one dapp ecosystem looks to only be strengthening its networking effects.

Binance Smart Chain makes headway

As was highlighted in the DappRadar January Dapp Industry Report, BSC has been rapidly growing. The on chain arm of the Binance ecosystem has been developing with the help of key partnerships and funding.

Source: DappRadar

Results have started to show, and in January BSC saw $15B in transaction volume. The blockchain’s EVM compatibility makes it an interesting option for projects worried by Ethereum’s high gas costs. IDEX is one of the latest Ethereum projects to give BSC a try.

Binance has created a vast ecosystem that includes both centralized off-chain and more decentralized on-chain components. It has a lot to offer both to new and established projects, and BSC has quickly inserted itself into the conversation around the most viable Ethereum alternatives.

Games are trying to escape the gas costs

The gaming sector was one of the hardest hit by the high gas costs on Ethereum. This appears to have started a wave of moves for projects. Dapper Labs has rolled out its Flow blockchain and has been enjoying a lot of success with NBA Top Shot.

Now, Sky Mavis launched Ronin and will be looking to migrate Axie Infinity over to it. Lands are first in line to be migrated. The move may open up new opportunities for developers and boost gaming activity as certain costs for players should decrease.

A number of games have opted for L2 solutions, with Matic Network being one of the popular choices. However, with the gas costs remaining high it may be hard for Ethereum to retain many of the gaming titles and even harder to attract new ones.

The Hashmasks surprise

Hashmasks are a new art collectibles project that has captured the attention of the industry. 16,384 mask NFT were created and users had the opportunity of purchasing an unknown mask, to be revealed later. An interesting part of the sale is that masks were sold in stages, with each stage becoming progressively more expensive.

Besides visual attributes, Hashmasks have a unique name, and that is a user-supplied variable. Users need NCT tokens to name or rename each Hashsmask, and this opens up a lot of potential for user engagement. This could even lead to dynamics similar to those seen with domain names and/or advertising.

Source: Hashmasks

The initial sale of the masks has already been concluded and the project has generated a lot of activity and discussions. It will be interesting to see how it develops and if it sparks a wave of new collectibles with a user interaction component.

The information provided here is for informational purposes only. This is not investment advice and should not be treated as such. Strategic Round Capital and/or the author of this article holds a position in BTC, ETH, YFI, HEGIC, Hashmasks, NCT.

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