Messari researcher is shining the spotlight on four small-cap crypto assets in the Ethereum ecosystem
According to Ryan Watkins, researcher of Messari, Terra (LUNA), Kava (KAVA), Band Protocol (BAND), RUNE (THORChain) – four small-cap cryptocurrencies in the Ethereum ecosystem – could be part of new decentralized finance paradigm that breaks out alongside the second-largest blockchain.
As Ethereum faces challenges scaling and interest in DeFi goes parabolic, there hasn’t been a better time for a parallel DeFi ecosystem to break out.
— Ryan Watkins (@RyanWatkins_) August 7, 2020
There are outstanding four small-cap crypto assets in the Ethereum ecosystem
In a series of tweets, Watkins said that the coins could be part of new decentralized finance (DeFi) paradigm that breaks out alongside the second-largest blockchain.
“As Ethereum faces challenges scaling and interest in DeFi goes parabolic, there has been a better time for a parallel DeFi ecosystem to break out.”
Watkins said Terra (LUNA) generates the highest transaction fees after Bitcoin and Ethereum. The Messari researcher highlights the fact that Terra is on track to print $ 3.8 billion in annual transaction volume, allowing the coin to pocket $ 26 million in transaction fees. Watkins says from a fundamental point of view, and Luna is a potential big winner.
“If LUNA were to be valued like peers by year-end, it would imply as much as a $ 3.53 price – 10x> current.”
Watkins is also looking at the decentralized lending platform Kava (KAVA). According to the researcher, Kava adopts an interesting monetary policy when the platform burns Kava when it pays interest on loans, which helps to counter the inflation that comes with rewarding bar vendors and suppliers. Terms Kava. Besides, Watkins points out that Kava has lofty goals, including the ability to interact with the Cosmos ecosystem and introduce more synthetic assets.
The next coin on Watkins’s list is the Decentralized Network Band Protocol (BAND), which integrates the blockchain world with off-chain events and data. According to the researcher, oracle coins like Band Protocol and ChainLink (LINK) have had a hot trend this year. Watkins said the large gap between the current valuation of the BAND and the value of LINK could indicate that the token has more upside potential.
Ultimately, Watkins says that RUNE (THORChain) deserves mention due to its smart code economy design, which helps keep a significant portion of the coin out of circulation.
“The relationship between validators and [liquidity providers] means the value of RUNE staked and bonded on the network must be at least three times the value of external assets held in liquidity pools (since each pool is 50% RUNE).”
He also explained that RUNE acts as the base pair for all assets backed by the decentralized liquidity network. Besides, RUNE is used as collateral to control the movement of assets in liquid pools.
To solve his long-term problem, Watkins warns that the upside potential is never a guarantee even though these coins are relatively cheap compared to their currencies.
“It’s important to remember that lower relative valuations do not necessarily imply undervaluation, and there are many valid reasons why these projects are valued below their Ethereum counterparts.”
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