Messari: As Ethereum faces challenges scaling, there has been a better time for a parallel DeFi ecosystem to break out

According to the crypto analytics firm Messari, based on the study The Rise of DeFi on Cosmos and Relative Valuations: Part One & Two, a parallel DeFi ecosystem is quietly rising up on Cosmos. And 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.


Messari: A parallel DeFi ecosystem is quietly rising up on Cosmos

As Ryan Watkins, Research Analyst at Messari, said, Cosmos has quietly built a parallel DeFi ecosystem, assembling the likes of Band, Kava, Terra, & THORChain provide many of the critical building blocks to do so.


First, let’s talk about Terra. Terra is a seigniorage share stablecoin blockchain built using the Cosmos SDK. Its value is ultimately derived from transaction fees; the Terra blockchain is + seigniorage. Terra generates the highest transaction fees of any blockchain outside Bitcoin and Ethereum, in large part due to its payments app Chai – one of the top and fastest-growing finance apps in Korea – which hosts 1.8 million users.

Despite Terra’s impressive growth and adoption, LUNA trades as a significant discount to its payments peers.

Then, let’s talk about Kava. Like Maker, Kava is a decentralized lending platform enabling users to borrow money by posting collateral to a smart contract.

But unlike Maker, Kava lives on its independent blockchain. In addition to receiving the economics of the Kava credit system and governance over it, Kava also secures the Kava blockchain, with stakers receiving inflation and fees generated by the Kava blockchain. The latter point is important because it World KAVA’s economics.

Kava’s interest income is a deflationary force that burns KAVA as interest is paid. Still, it competes with the inflationary force of inflation rewards distributed to Kava stakers and Kava liquidity providers (new liquidity mining program).

For now, let’s talk about the BAND. Like Chainlink, Band Protocol is a decentralized oracle solution aimed at bridging the on-chain world of cryptocurrencies to the off-chain world of events and data. However, unlike Chainlink Band Protocol is an independent blockchain built using the Cosmos SDK.

Over the past few months, Band took a page from the Chainlink playbook, announcing a ton of partnerships, which has been rewarded with a breathtaking breakout, now up 32x on year-to-date after its just announced Coinbase Pro listing.

Finally, THORChain (RUNE) is a proposed automated market maker (AMM) that closely resembles Bancor (BNT), except for cross-chain exchange. THORChain will be an independent; Cosmos SDK enabled blockchain.

RUNE doubles as both the base pair for each asset supported by the exchange and the asset THORNodes bond as collateral to control and secure the flow of assets into and out of liquidity pools. RUNE’s dual utility plays a central role in THORChain’s economic model.

Despite not being live, the market could be pricing RUNE at a premium considering THORChain plans to offer a relatively differentiated product in a high-growth sector.

With a token model that can grow alongside the network, THORChain is well-worth monitoring.

Several tokens that were launched via initial exchange offerings on Binance are “on a tear”

Several crypto tokens that had been jump-started via IEO on Binance Launchpad are seeing a tremendous increase in prices – up to 455% – over the last month.

To date, Binance Launchpad, a token launch platform for “transformative projects,” successfully conducted 18 IEOs for 14 tokens such as Band Protocol (BAND), Perlin (PERL), BitTorrent (BTT), Bread (BRD) and others. Cross-chain data oracle Band Protocol, for example, launched its 2.0 version on the Cosmos network in mid-June. Prior to that, it was already used by Binance to provide pricing data for more than 600 trading pairs. Currently, it is up 370% over the last 30 days.


Several tokens that “graduated” Binance Launchpad saw a sharp increase in prices over the last 30 days | Source: Messari

Perlin, the second-biggest graduate of Binance Launchpad in terms of price increase, is a leaderless proof-of-stake smart contract platform that’s developing enterprise-grade blockchain tools and DeFi ecosystems. Among its partners is the National Institution for Transforming India, the International Chamber of Commerce, the Singapore government, the Dubai Chamber of Commerce and other institutions. It’s up 311% in the same timeframe.

The remaining projects are up between 1% and 200%, with the only exception of WazirX—which is down 9%.

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