DeFi is no doubt the next big thing, and the blockchain industry is offering the infrastructure needed for that. Lending and borrowing are two big parts of the DeFi ecosystem. The good news is that there are certain projects in this area that offer very good prospects. Here is why lending and borrowing protocols matter:
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Lending and borrowing are at the heart of DeFi right now.
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There is a huge demand for these protocols as people transition from traditional CeFi.
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Most of these projects are also grossly undervalued.
So, if you are not sure which lending and borrowing protocols you can invest your money in, here is a list to consider:
Aave (AAVE)
Aave (AAVE) is one of the leading DeFi protocols in the market right now. The platform is designed to act as a liquidity provider for exchanges across the crypto-verse. Users simply deposit their crypto assets in liquidity pools which are then used to provide liquidity in the market where it's needed.
Data Source: Tradingview
The users then earn a percentage of the transaction fees charged by these exchanges. Aave (AAVE) has grown immensely over the years. At the time of writing this post, this coin was trading at $140 with a market cap of around $1.9 billion.
PhoenixDAO (PHNX)
In case you are looking for an untapped asset in the lending and borrowing space, then PhoenixDAO (PHNX) is a huge bet. The coin is relatively small in fact, right now it has a market cap of just $1.8 million. This is a project that could realistically grow 10x easily. There are also plans to add more functionality to the Phoenix ecosystem in the near future.
Venus (XVS)
Venus (XVS) is an automated market maker protocol designed to provide liquidity in the market. It works the same as Aave. The coin has a market cap of $107 million and is trading at $9 at the moment. It is worth looking at.