DeFi Startups: Laying the Foundation for the Future of FinTech

The notion of Bitcoin, a digital, ledger-based currency, was conceived during the Global Financial Crisis by Satoshi Nakamoto. In the years that have passed by, it has become the foundation of a decentralized financial system reaching for the sky.

A lot has happened in the DeFi space over the last 24 months. People say that with the ongoing DeFi boom, centralized finance will meet the same fate as information did when the internet arrived on the scene. And they have their reasons for saying so:

• The total value locked in decentralized finance has risen 8x since July 2020 (DeFi Pulse). The Total Value Locked (TVL) measures the value of assets deposited in transactions.
• DeFi applications are used by over 4 million unique addresses! (A jump of 40% in two years.)
• Ethereum's market cap is $346 billion, making it the second-largest cryptocurrency. In 2021, Ethereum surpassed Visa (the second-largest payment processing company) by settling $11.6 trillion in transactions!
• The top five stablecoins, USDT, USDC, Binance USD, Terra USD, and Dai, together have a market cap of $170 billion.

DeFi's whirlwind has been a sight to behold - it has successfully created a parallel financial system with a tidy sum of applications. In addition, the DeFi space is witnessing the creation of incredible creations - from new products and tokens to protocols, dApps, and platforms.

DeFi has made an entrance in the finance world, and it has been a sight to behold. Its entrance brought the emergence of incredible ideas and notions, some of which are embodied by DeFi startups. Let's have a look at a few of these startups!

1. Nexus Mutual: Nexus Mutual is an insurance company housed on the Ethereum blockchain. Users can pool their risk from across the globe without a central intermediary. It protects against lost funds or hacks. Its community runs it - members can decide the valid claims. Members can make decisions that are recorded and enforced on the blockchain.
    

2. Reflexer Labs: Reflexer Labs is a distributed team building open-source software that created the RAI, an Ethereum-backed stablecoin. It is used as collateral with other DeFi protocols. Reflexer Labs created the RAI to combat volatility in DeFi and crypto and offer users a way out.
    

3. Nifty Gateway: Gemini and the Winklevoss twins recently acquired Nifty Gateway, a work-in-progress NFT marketplace. Reputed artists frequently drop on Nifty. Nifty aims to bring decentralization of artwork to the NFT market. In December 2021, Nifty Gateway sold over 265,000 digital tokens (about $91.8M!) in its NFT sale.
    

4. Brew.money: Brew.money is a DeFi startup that offers up to 10% on deposits! What's better, the interest is credited every second. Brew allows the user to make instant deposits, withdrawals, and money transfers. Deposits are converted to Stablecions and deployed in lending protocols and liquidity pools on Decentralized Exchanges. This generates a higher yield.
    

5. Chainlink: Chainlink does what its name says - it is an oracle or intermediary between smart contracts. It allows smart contracts to work in unison. The network, built on Ethereum, facilitates the transfer of tamper-proof data from off-chain sources to on-chain smart contracts.
    

6. Dharma Labs: One of DeFi's biggest challenges is its use by average, non-technical folks. Dharma Labs comes to the rescue - it is an Ethereum wallet that combines traditional banking with decentralized alternatives. The wallet connects directly to a user's bank account. One can lend and borrow cryptos using the wallet.
    

7. Balancer: Balancer is akin to many other DeFi startups. It is a decentralized protocol for providing liquidity pools, trading tokens, and working as an automatic market maker. Balancer's USP is its portfolio rebalancing strategy. Instead of paying a portfolio manager to build a portfolio, one can collect fees from fellow traders who rebalance the portfolio.
    

8. 1Inch: A new entrant in the market, 1Inch is creating a DeFi environment that contains multiple decentralized protocols within one environment! A DAO (Decentralized Autonomous Organization) will govern the protocol. Users vote on decisions based on the holding of the 1Inch token.
    

9. DigiliraPAY: DigiliraPAY is a Blockchain Payment Gateway that allows users to make permissionless transactions. The startup's app can help businesses receive payments in cryptocurrencies and then cash them out in fiat. In addition, one can store cryptocurrencies, shop using them, and send them to friends. The app integrates smart contracts and smart token technology to enhance transactional security.
    

10. ScholarSite: Confused about where to start with the DeFi industry? This startup aims to democratize access to 'elite' education by empowering academics and experts to broadcast content globally and build a following around it.

Author Bio

Shradha got started in the DeFi space in the early 2019. After learning what cryptocurrencies and decentralized finance was bringing to the table, she dived right into the new formed industry. She has joined Brew Money - a DeFi startup in their mission to make DeFi accessible to all.