- Since 2020, decentralized finance
has been a cornerstone for adding utility to crypto.
And in about two years,
the amount of assets locked up in Defi
have gone from about 600 million to over $240 billion.
Nevertheless, when looking over the last two years of data,
we can see some glaring problems with Defi as a whole.
The first being the complexity to use Defi.
Usually to participate in a high yield pool,
you have to take at least five steps
before it's getting your money
into the right token and exchange.
And when someone does enter a cryptocurrency
or protocol incentivized by high rewards,
once interest range or the interest offer decreases,
the users oftentimes dump their original investments
on the market, creating sell pressure
and causing the price to drop, never to recover.
This leads many new people in are in crypto
starting off investing into meme coins
or getting into projects that are offering
hundreds of thousands of percent APY,
and they're never going to recoup their investment.
And this is the equivalent of someone deciding to invest
into the stock market and only investing into penny stocks.
So you can see the problem here.
And today I want to take a look
at three projects that are going
against the traditional model of decentralized finance.
One is established, one is semi established,
and one is brand new that has not launched yet.
And in the next two to three years,
I think we're going to see more projects implement,
some of these things that these three projects are doing.
Before we get started, my name is Kris,
and on this channel I talk about different ways
to create passive income online.
And according to my stats,
only about 30% of you are subscribed so be sure to subscribe
for new videos dropping every single week.
Now I believe the future of Defi is heavily centered
around Defi-tainment.
Think of decentralized finance mixed with gaming.
And we can see over the last two years
that the number of crypto gaming wallets have over 25X
but they still only represent 4%
of the total wallets to those in Defi.
And when comparing the traditional Defi model
where investors of projects would exit for various reasons,
the Defi-tainment adds entertainment, increasing the utility
and closing the loop of people leaving,
which leads to more growth of that crypto's ecosystem.
Now, this is easier said than done
because part of Defi-tainment is hinged
on the fact of actually having a good game.
But to understand Defi-tainment, it's first best to look
at the project that did it better than any other
at this point, Axie Infinity.
A web three gaming company that has over 2 million users
and has generated over 1.3 billion dollars in revenue.
They do this by creating a player owned economy
that took inspiration from Pokemon.
And because the rewards are the same
regardless of what country you're in,
players over in the Philippines
and other third world countries are utilizing this game
to create full time income.
You can play the game once purchasing
or renting out the NFT characters
on the Ethereum blockchain.
And it gives those Axie Infinity's utilities
by being able to fight and breed,
which you can then use to earn the Axie token,
which can be used to exchange for actual USD.
But only a fraction of the world are gamers
and Axie knew this, so to truly be successful
on the blockchain, they would have to lure in people
who didn't just wanna play the game,
but also wanted to create income
outside of playing the game.
A couple ways of doing this are renting out the Axie NFTs.
And this works because the Axie NFTs can be expensive
and not everyone can afford a fleet,
making renting a viable option.
Another way of making passive income
is just by holding the token.
This is lucrative because despite market conditions,
Axie is the number one play to earn
and is considered a blue chip crypto
if you were to build a portfolio of play to earn games.
And there are hedge funds out here doing exactly this,
building massive portfolios of the Axie NFT game.
I think the biggest argument against Axie going forward
is just how good is the actual game.
Weaning so heavily on the -tainment
of the Defi-tainment business model,
current players have said that the game
actually isn't truly that fun and not that addicting,
which I think could be a problem as this market matures.
Nevertheless, they are the ones who have laid down
the blueprint for the Defi-tainment business model.
The second project using an element
of Defi-tainment is Meta Mansions,
a Metaverse company that's fully doxxed
on the Ethereum blockchain.
And despite being relatively new,
they have a huge community, a stable floor price
and are working with augmented reality company
that's also working with the likes of the NFL, Facebook, UPS
just to name some of the companies
that they're working with.
This project is funneling people
into a fully livable metaverse.
They've already sold out 8,888 NFT land parcels
for 0.8 Ethereum.
And they have a game launching in August sometime
but the way they want the most people to funnel in
is via interacting in their metaverse.
So imagine instead of going to a 30 person Zoom meeting,
you could go to a Zoom meeting that had a thousand people
whether it was your work or a fitness class.
And this is all done in one of their custom design buildings
being designed by one of the leading architects
in the world, Kobi Karp.
And once inside the world functions on their key token.
The token is still in presale,
but once up, the people that are interacting in the world
will need the key token to just participate
in many of the activities.
And this is the essence of what I think the future
of Defi is aiming to do.
It wasn't until sites like Amazon and Facebook
came into the equation before people
really started using websites.
If we can make this something that my grandma
has to do or can do, that's when mass adoption
is going to take place.
And whatever Metaverse can pull off this massive utility,
getting people in their world
for everyday things is going to be the real winner.
And it's so early to try
and tell what Metaverse that's going to be.
We don't even know if they're around yet
but I think these guys are giving it their best shot.
Last project taking a completely different spin
on Defi is Wolfer Finance.
Which technically isn't a Defi project
but at investor funded institution
offering investors passive income.
And this project isn't even out yet,
but the white list, which is currently available
is over 30% full.
And Wolfer Finance is projecting
a 50% return on an investor's money
over the course of the first year.
And this is achieved through investing
into high priced blue chip protocols
that the average investor will have a hard time
obtaining enough capital for.
The goal here is reinvesting 45%
of the returns every month back into the protocol.
And after a five to six year period,
they're projecting a 1300% or a 13X on an investor's money.
And unlike the traditional Defi model offering high APRs
in a revolving door of investors, the low APR
and one round of funding is aiming
to attract long term buyers which will decrease
the overall sell pressure on the project.
The way it works is there are 5,000 NFTs
on the MATIC blockchain and they're being minted for $500.
Once minted, an investor is guaranteed to stake
in Wolfer Finance and payouts will be every month.
Investors can sell their NFTs whenever they want
on the open market.
And ideally as time goes on,
the more wealth the project accumulates,
the more valuable those NFTs will be.
And similar to housing hedge funds
that offer monthly dividends,
the real money comes from when selling the house
at the end of the deal,
and something similar could happen here.
This project is fully doxxed
and they're doing audits similar
to another protocol that I've talked about
on the channel before, Yield Notes
where they're flying out investors a couple times a year
to see all of the verifiable assets that they've purchased
on the blockchain.
They're also doing NFT giveaways every single week
leading up to launch, and you can participate in those
by joining the Discord and Twitter
which I'll leave down in the link below.
And they're looking for the launch to be somewhere
around the second week of June.
The main obstacle I see with Wolfer Finance
is just launching in a bear market,
which goes for any project launching in a bear market.
Having only one round of funding and no new investors
coming in could be problematic for that 50% ROI.
But I think long term, I don't see that 13X not happening.
I think the question really is is how long
is it going to take to get there
and what's the opportunity cost
of what you could do with your money?
And despite 20% of Americans having crypto,
we're still in the infancy stages of what crypto aims to do.
And experts are still hedging bets
on what they think the ultimate use case will be.
But two things are for certain
is traditional Defi is going to have to change
and it's going to have to be made easier to use
to truly enable mass adoption. And I wanna say this too,
because some of you guys say this in the comments sometimes,
but none of the projects today were sponsored.
Also if I have a project that I have an affiliate link for,
I don't consider that a sponsorship
because at the time of me posting,
I'm out my money and out my time.
So if you don't want to use my affiliate link,
just go to the website yourself, it's all up to you.
There's no pressure there.
And if you are interested in seeing other ways
to make money online, be sure to like and subscribe,
more videos coming out every single week.
Thanks for watching, and I'll see you next time.