NEW DEFI TOKENS REPORT

Crypto Briefing Research Department

March 18, 2020

Contents

Introduction

The single most significant trend to emerge out of the 2018-2019 bear market has been decentralized finance, or DeFi. The sector has been expanding rapidly as crypto investors seek alternative investment strategies to mitigate further losses from the bear market. This has allowed projects that have been building infrastructure around the DeFi sector to achieve a great deal of attention from the wider crypto community.

The high level of interest in the DeFi ecosystem has generated a great deal of demand for native tokens issued by DeFi projects. Throughout 2019, we saw the rise of Synthetix, which lets you trade synthetic assets. Its native token has grown over 30x, during the last year. THORchain, another DeFi project that  aims to build liquidity solutions, has grown over 10x in just a few months. 

While there was high investment interest in native DeFi tokens, many of the most popular DeFi projects did not have an underlying token that allowed investors to speculate on the success of the project. However, this is starting to change. Over the last few months, several popular DeFi project’s announced that soon they would be integrating native tokens into their applications.

With the interest and usage of popular DeFi applications quickly gaining momentum, it makes sense to take an early look at some of the tokens that could be coming onto the market soon.

Compound Finance

Compound Finance is currently the leading lending platform in the DeFi sector. The platform aggregates lent funds into liquidity pools and allows those seeking to borrow digital assets to do so directly from the pool itself, without having to negotiate with a counterparty or peer.

Compound dApp is one of the most  popular DeFi applications in the market today. 

Compound has over 16,000 users that are currently lending out over $167M worth of crypto assets. Most of the funds are supplied in ETH, USDC, and Dai. 

The number of borrowers, however, is significantly smaller and currently around 1799 users. The total amount borrowed is just over $34.6M. The most popular tokens for borrowing are stablecoins Dai, USDC, and Sai.

Compound Governance Token (COMP)

Compound is planning to introduce a new governance token to its protocol. The project wants to decentralize itself by removing the largest single point of failure, the centralized team. 

The project is planning to issue an ERC-20 standard token that will allow direct participation in the governance of the protocol. Users will be able to delegate their voting rights to addresses of their choice.

Addresses with over 1% of COMP delegated will have the ability to propose a governance action. All the proposals will represent an executable code, and not suggestions for the team or foundation to implement.

In the beginning, a large concentration of tokens will be in the hands of people closest to the company, staff, founders, and investors. This is expected to change, however, as more users get into space and start using the platform. 

When Will Tokens Be Issued?

The official answer:

“When the governance system is operating in a reliable, distributed manner, we’ll suggest that the failsafe be removed — and that the remaining tokens be distributed to Compound protocol users. We’ll be releasing more details of this plan in the coming months — stay tuned!”

However, given that the token has already been deployed on Ethereum’s Ropsten testnet, and the governance system has been audited by OpenZeppelin, it is likely that the token will be available to the public somewhere around Q2-Q3 of this year.

Testnet tokens are already available to the community, and anyone can request them and start testing the system. 

Overall, given the size and the popularity of the Compound dApp in the DeFi space, the demand for its governance token can be substantial, even though the token will only have governance function in the system in the beginning. 

You can follow the project's developments and stay abreast of the release details here.

Trust Wallet

Trust Wallet is a multi-currency wallet that supports leading crypto protocols and cryptocurrencies (ETH, BTC, XRP, TRX, XLM, BNB others). The project also supports the staking of various tokens and allows direct decentralized trading, all through its mobile app. 

Roughly two years ago, the project was acquired by Binance, and Trust Wallet became the official cryptocurrency wallet of Binance.

Trust Wallet Token (TWT)

Trust Wallet is planning to issue a utility token that will be used within the Trust Wallet application. Owners of the tokens will receive various benefits, which should in turn drive up the utility and demand for the tokens.

Token holders will receive the following benefits:

-Governance

-Discounts on DEX trading

-Collectibles trading using the token

-Promotions and dApp review

-Affiliate and bounty rewards

-Vouching and User reputation

This will be a Bep-2 token issued on the Binance Chain. According to the team, it will be distributed through referral campaigns, quizzes, tipping by helping other users, and performing various tasks within the app (staking, trading, etc.).

Given that the token will provide direct monetary benefits to its holders, as well as governance rights, there is a high chance that the demand for these tokens will be high. Moreover, Trust Wallet has a large user base and has the support of Binance, the largest cryptocurrency exchange.This makes TWT a really interesting crypto asset. 

When Will Tokens Be Issued?

The official date of the token launch still remains unknown. However, according to the discussion in the official Telegram group, the project is planning to start distributing tokens at the beginning of April 2020.

bZx

bZx is a decentralized protocol on Ethereum designed for lending and trading with margin and leverage. The platforms power two main products:

Fulcrum -  The DeFi margin lending and trading platform

Torque - The Indefinite term loans with fixed interest rates platform

The protocol aims to benefit lenders, traders, and decentralized exchanges. Lenders can lend their crypto assets in a decentralized manner using the bZx platform. Margin traders can directly borrow from the protocol, by paying fees to lenders. Other DEXes can also integrate the bZx protocol to increase their liquidity. 

bZx was arguably the most talked about DeFi dApp during the month of February when the protocol suffered two consecutive flash loan attacks. The attacker managed to get away with nearly $1M

The bZx team pledged to compensate its users after it suffered two hacks and is planning to invest more in its security to protect its users in the future. 

BZRX Token

Unlike other DeFi platforms mentioned in this report, bZx has had a built-in native token since the launch. However, it still has not been issued to the public and (so far) it has no use cases within the system. The project has conducted a private sale and is planning to do a public sale in the future. 

After the public sale, the token will be integrated into the protocol, and users who wish to use the platform will have to pay trading fees to the relays denominated in the BZRX token. 

When Will Tokens Be Issued?

The project has not disclosed when it will conduct the public sale of its token. However, given the project’s recent hacks and the overall depressed market situation, it is unlikely that the public sale will occur in the near future.