Despite all the benefits brought by blockchain technology, there are still many obstacles that prevent it from expanding outside of the niche, including issues such as volatility, high-risk operations, low liquidity, and lack of cross-chain interoperability.
Even considering all the popularity of cryptocurrencies and the expansion of the concept of an alternative global financial market, this technology is still a long way from the daily life of most ordinary people.
In this article, you will discover several projects that have the potential to help blockchain technology advance towards mass adoption in the next coming years.
Cryptocurrencies Do Not Hurt – Mitigating Risk and Volatility
It is not a novelty that cryptocurrencies are heavily associated with risk. Indeed, cryptocurrencies are volatile, unregulated, and highly susceptible to hackings, bugs, and other technical errors.
As cryptocurrencies are not regulated by central banks, so they do not have the hedging provided by central banks, taxation, and regulatory entities. Unfortunately, cryptocurrencies can be affected by forks or even discontinued after a problem occurs in their original structure.
In this sense, the crypto industry is already working towards solutions to mitigate the risk and volatility associated with digital assets. It does not only represent an evolution in terms of value but also trust and financial security.
Everyday users do not react to sudden volatility in the same way investors and traders do, so the mass adoption of cryptocurrencies also involves mitigating the risk and volatility associated with it.
Amongst the players that want to stand up to the task, there is Hedget, which is a platform focused on mitigating risk and volatility associated with cryptocurrencies through decentralized options.
They aim to create a solution that permits anyone to onboard and pay the smallest possible fee to secure crypto-based positions against unexpected market movements. Their structure is based on Chromia, which is a blockchain created to provide DApps with much-needed scalability among different blockchains.
Potential real-world use cases for Hedget include protecting users against liquidation (either in crypto lending markets or in leverage trading), or as an add-on to other protocols as a tool to protect positions.
Another platform whose focus is to provide a smoother way of investing in cryptocurrencies is Indexed. Focused solely on crypto-based indexes, the project’s goal is to develop passive portfolio management strategies.
Indexed understands that the best strategy for average users is to invest in a wide array of digital assets reunited in one single place.
Investing in several assets separately and managing positions on different platforms is not an easy task for everyone, so they realized that crypto-based ETFs were the best way to achieve their vision.
An ETF (exchange-traded fund) is an investment in which tradable shares represent ownership of the underlying assets.
In this case, the underlying assets are cryptocurrencies only, which means the average user can still hold a wide array of digital assets while enjoying the benefits of automated increase or decrease in exposure associated with managed funds.
Currently, the project is working to deploy and passively manage on-chain pools capable of adjusting to market movements over time. Given the fact that indexes are extremely effective to generate returns in growing markets, the platform took advantage of it to benefit the average user even more.
Even though borrowing cryptocurrency is not a novelty, the way it is done can be further developed and optimized. HiFi Finance is a project that wants to deliver a “high-fidelity experience” in terms of lending markets to DeFi.
Formerly known as Mainframe, the project was re-designed to deliver users fixed-rate and fixed-term loans based solely on cryptocurrencies. Users will be allowed to lend and borrow against their crypto holdings with optimized liquidity for borrowers and predictable returns for lenders.
Self-sustainable Solutions for Everlasting Liquidity
Undoubtedly, one of the biggest issues that affect the crypto industry is liquidity. This is why many crypto enthusiasts tend to see cryptocurrencies more as a type of speculative investment than as an everyday currency.
In layman’s terms, liquidity refers to the level of ease/hardship someone has when converting an asset either into cash or another asset. The lack of liquidity affects the ability investors have to trade and causes a significant impact on cryptocurrency pricing.
Some experts indicate that liquidity is the primary source of information regarding the health of a certain market. Considering the validity of this hypothesis, it is plain to see why the rise of liquidity pools “coincidentally” meets the huge numbers achieved by the crypto industry.
Expected to be launched in the first quarter of 2021, Evolution aims to be a self-sustainable locked liquidity protocol that will change the way users interact with DeFi liquidity pools and money markets.
The project’s structure reunites a unique liquidity protocol and a lending/borrowing mechanism, all powered by native token EVN.
EVN is the platform’s deflationary token, utilized as the project’s “engine grease” and as a reward to users. Their goal is to make the total EVN supply available on different Uniswap pools at the platform’s launch (EVN tokens have a fixed supply), which is a revolutionary move.
The project will not rely on fundraisers, pre-mining, or incentives to big crypto whales. Neither free team tokens nor central control will exist, as all decisions will be made through multi-sig until the governance achieves its community-owned mode.
They plan to generate fees only through lending/borrowing services, with the sole purpose of increasing the network’s value.
Launched in January 2021, Saddle wants to revolutionize the crypto industry. They build an AMM (automated market maker) platform designed to deliver optimal trading between pegged value digital assets.
A pegged value crypto asset is a token that has its value pegged to an underlying asset somehow. Currently, the platform is launching a tokenized bitcoin (BTC) pool to allow users to trade/provide liquidity for assets such as WBTC, renBTC, sBTC, and tBTC.
Nonetheless, delivering a pegged value asset is not easy, as the process can be expensive and suffer a huge lack of efficiency. Saddle’s solution to this problem is to provide an AMM tailored specifically to permit users to trade all these assets with minimal slippage.
Their solution is mainly focused on liquidity for stablecoins and powered by the StableSwap algorithm, which is a mechanism to enable cross-market interactions for stablecoins in a complex but effective manner.
Interoperability and Cross-chain Interactions
If the blockchain industry does not establish cross-chain interoperability, it will never achieve mass adoption and will not impact the lives of millions of users worldwide.
To be interoperable, two or more blockchain systems must be able to communicate in between themselves and exchange value. Most traditional finance systems offer great interoperability. Meanwhile, achieving the same thing in the blockchain world is not so easy.
Currently, most blockchain-based platforms are not interoperable, so an individual that holds a position based solely on Bitcoin will have a hard time transacting in the Ethereum network, for example.
Even though solving this issue will take some years of hard work, developers and executives did not linger to create feasible solutions that work nowadays.
Expected to be fully launched in April 2021, Zenlink is building a new concept of a cross-chain decentralized exchange.
Structured on top of Polkadot, the project aims to enable different parachains to rapidly acquire DEX functionalities and share liquidity in between each other.
For those unaware, Polkadot is a network known as the “internet of blockchains”. Their goal is to enable a fully decentralized web where only users are in control. The network enables the transfer of data or assets across different blockchains.
Powered by a unique DEX aggregator, Zenlink can link several DApps through Polkadot to allow users to benefit from efficient, rapid, and low-slippage cross-chain transactions.
Followed the tendency launched by Nexus Mutual, Tidal is a New York-based blockchain firm that allows users to provide funds to insure DApps against unexpected smart-contract failure or loopholes in a pool.
Also built on top of Polkadot, the project’s team believes that this move will make it available to connect with more chains once the network matures. Their goal is to provide a high-yield insurance platform where investors can buy and sell over-leveraged cross-chain covers.
In December 2020, the project has raised almost US$2 million in a seed round led by partner KR1.
There is a whole world outside of Bitcoin and Ethereum, as it is plain to see by the number of blockchains being developed nowadays.
Thundercore is one of these innovative networks that aim to achieve mass adoption by demonstrating that the benefits of blockchain are tangible and achievable in the present.
Structured as a permissionless and transparent blockchain, Thundercore is EVM-compatible and runs on a PoS consensus mechanism. For those unaware, EVM is an acronym of Ethereum Virtual Machine, which is a crucial part of the Ethereum network and its consensus engine.
Their goal is to enable users to enjoy the benefits of Ethereum-powered smart-contract technology within an independent ecosystem full of different possibilities.
Real-world Solutions for Real-world Issues
Unfortunately, the original concept of blockchain-based assets as an alternative form of currency was subdued by the speculative side of the business throughout the years.
Consequently, many investors tend to look at cryptocurrencies more as a speculative type of thing than as an everyday currency that could be utilized along with fiat currency, and eventually even replace it.
Luckily, developers and executives in the crypto industry started realizing the problem and working on ideas to integrate a blockchain-based solution that could affect the lives of everyday people positively.
Shopping.io created a website where users can buy online on top-notch retailers with their favorite cryptocurrencies, including Amazon, eBay, and Walmart.
The project was founded by drop shipping veterans that realized the low-hanging fruit of reuniting cryptocurrency-based payments and online shopping. In the future, Shopping.io wants to integrate several APIs to support even more token options.
The SPI token is the platform’s ERC20 token, being the native currency of the Shopping.io ecosystem. Many features are allowed only to SPI holders, as they can be accumulated to unlock exclusive benefits and deals.
Most common rewards include free shipping (USA only), discounts, access to VIP Telegram group, and scaling order limits.
Regardless of country, savings are part of the everyday lives of people worldwide. Pokket is a project that saw the potential in developing a unique service to deliver digital asset savings account.
The platform allows users to earn passive income through various products while holding cryptocurrency funds. Pokket believes in an innovative approach that intermingles traditional finance instruments with cryptocurrencies to deliver an optimized mechanism for passive income.
Currently, they offer two distinct products that pay interest on the crypto saved by investors at different fixed periods.
The platform has an extremely user-friendly approach. Users just need to register using an email address, send cryptocurrencies into a wallet, create a saving account and start earning interest.
With the explosion of the popularity of cryptocurrencies and the massive number of digital assets available in the market, it is impossible to deny the impact of blockchain technology in the financial world.
However, when it comes to achieving mainstream success, there is a long way to go yet. At the present, many projects are developing tools and strategies to pave the way to blockchain’s mass adoption, which includes:
- To provide solutions to mitigate volatility (e.g., Hedget)
- To improve financial safety for crypto assets (e.g., Tidal)
- To deliver real-world solutions for real-world demands (e.g., Shopping.io)
- To create cross-chain gateways for interoperable interactions (e.g., Zenlink)
It still hard to reunite scalability and decentralization to transform blockchain into something mass-adaptable, but there are perspectives on the horizon that demonstrate blockchain’s mass adoption is feasible and achievable.