Decentralized finance tokens such as Solana (CRYPTO: SOL), Uniswap (CRYPTO: UNI), Chain link (CRYPTO: LINK), and Peas (CRYPTO: POINT) have a euphoric day. They increased by 16.25%, 10.61%, 8.61% and 20.07%, respectively, in the last 24 hours, to reach $ 119.62, $ 28.57, $ 26.78 and $ 29.68 each at 10:30 a.m. EDT. Major developments are coming to these DeFi networks which are solidly supported by fundamentals.

Investors have high expectations of Solana, who today announces a mysterious ignition event. Users believe it will either be a token-burn event similar to share buybacks or a major infrastructure upgrade. Solana is a popular hub for building DeFi infrastructure.

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Uniswap, a popular decentralized exchange (DEX) for trading altcoins, quickly gained popularity among American investors. Due to unique US regulatory rules, fiat-to-crypto cryptocurrency exchanges, such as Coinbase (NASDAQ: COIN), cannot list altcoins to trade. So, the only way to invest in this lucrative asset class is to use crypto to crypto exchanges like Uniswap. The platform has facilitated more than $ 386 billion in transactions among more than 1.5 million users since its inception.

As for Chainlink, on August 30, cryptocurrency derivatives trading platform Bingbon began using the network to integrate real-time asset price feeds into its platform. Bingbon has facilitated more than $ 171 billion in derivative transactions in more than 100 countries since its inception. Chainlink is the world’s first oracle token that connects blockchain data to real-world application programming interfaces (APIs), such as financial data, socio-economic statistics, weather forecasts, and more.

On the same day, Parallel Finance, one of several projects in the Internet of Blockchain (IoB) Polkadot network, raised $ 22 million in Series A venture capital. Polkadot enables multiple blockchain networks to communicate with each other and share actives.

So what

If someone had brought up the idea a few years ago that one day parties could conduct financial transactions without a central authority (like companies, governments, etc.) to negotiate and maintain trust, they would have been laughed at or ridiculed. However, much like the tech unicorns of Silicon Valley, DeFi networks are now rapidly disrupting mainstream finance. For example, the annualized value of transactions between users of decentralized applications (dapps) on DeFi networks, namely Ethereum (CRYPTO: ETH), reached the impressive sum of 158 billion dollars. These include video games, online casinos, DEX, marketplaces, etc.

Meanwhile, more than $ 20 billion in capital has poured into decentralized peer-to-peer lending platforms, such as Aave (CRYPTO: AAVE). Aave gives ordinary investors access to a financial product previously reserved for high net worth investors: asset loans. Users can pledge their cryptocurrencies, such as ETH, and receive a stable loan to cover their daily expenses while their investment grows. The smart contract feature guarantees lenders a collateral in the event of borrower default resulting in very low interest rates.

DeFi democratizes another market generally reserved for wealthy individuals: the fine arts. Non-fungible tokens are certificates of ownership of digital assets such as images, videos, etc., traded on the blockchain. The main platform for NFT transactions is opensea.io, which recorded a transaction volume of $ 1 billion in the month of August alone. If DFTs are classified as intangible assets, users can hire an appraiser to certify their value, donate them to charity, and deduct their full market value (including capital gains) from their ordinary income to offset tax debts generally over a few years. As a result, their popularity is skyrocketing, and anyone theoretically could, as NFTs trade for as low as 0.01 ETH.

Now what

The DeFi rally is far from over. Previously, it was impossible to disseminate sensitive personal information, such as copies of driver’s licenses, passports, police reports, court documents, etc., securely and efficiently on the blockchain, without revealing their information to the public. But such data is needed for many financial products.

This is no longer the case. Last year, a group of researchers in South Korea found a way to kill three birds with one stone using next-generation zk-SNARK encryption: hide sensitive personal data from images, allow other participants to validate their authenticity. without revealing the information below and reducing its size, so it is suitable for blockchain. This means the next wave of DeFi, like decentralized peer-to-peer healthcare, home and auto insurance products, is now a possibility. Definitely keep an eye out for these promising tokens as the industry moves through the next revolutionary phase.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.