Last week, cryptocurrency markets saw the biggest weekly drop in market capitalization this year. Although the decline was not major at all, the total market capitalization fell from $1.09 trillion to $1.05 trillion, which is the largest weekly decline this year. More than anything, this decline could indicate that sentiment in the cryptocurrency markets is turning neutral or even slightly bearish again. The reasons behind this could be fears of tighter regulation of cryptocurrencies and crypto services or even the conditions in the broader financial markets. Nevertheless, in our weekly Top 3 Coins to Watch articles, we try to shed light on potential projects and their respective coins and tokens, regardless of the general market conditions.
3. Manufacturer (MKR)
The Maker protocol was one of the first projects on Ethereum and remains the cornerstone of Ethereum’s decentralized finance (DeFi) ecosystem. This protocol, which was already launched in 2015, allows users to lock their Ethereum or other Ethereum-based assets as collateral to receive a loan in the form of stablecoin Dai. The Dai, which is designed to trade as close to $1 as possible, is issued in a completely trustless fashion. Its issuance and peg are governed by a complex system of Ethereum smart contracts. MKR is the governance token of Maker Protocol. Holders of these ERC-20 tokens can propose protocol changes and participate in governance surveys.
Maker releases Spark Protocol, a fork of Aave v3 that will soon compete with its parent protocol
On February 8, 2023, MakerDAO, the governing body behind the pioneering Maker protocol, unveiled its latest proposal, which suggests creating Spark Protocol. Developed and maintained by research and development company Phoenix Labs, Spark Protocol will be a front-end application that will allow users to interact with DAI. Spark Protocol’s first product, Spark Lend, will be a lending solution initially focusing on the most liquid, decentralized and highest market capitalization assets.
The protocol will use pricing oracles from Chronicle Labs and Chainlink for enhanced security. Additionally, MakerDAO will launch etherDAI, an ETH-linked liquid staking derivative, to further cement its entry into the lending market. It should be noted that the Spark protocol is a fork of the very popular Aave v3 protocol. Without directly altering Aave’s liquidity, the Spark protocol will inevitably hinder Aave’s market share by offering the same services as its parent chain. The developer of Spark Protocol, Phoenix Labs, has therefore announced that it will send 10% of the profits made in the DAI market for the next two years to Aave. The launch of Spark Lend is scheduled for April, without a specific date. MakerDAO’s entry into the lending market could lead to increased competition and better rates and user experience for users in the ever-growing decentralized finance industry. Additionally, with this move, Maker will no longer have to rely on other DeFi protocols for stablecoin DAI adoption.
2. Lido Dao Token (LDO)
The Lido DAO is a decentralized autonomous organization that manages the Lido staking service protocol by deciding on key parameters such as fees and incentives. Lido is currently the most popular staking protocol for Ethereum 2.0, Solana, and Kusama, and the second-largest DeFi service by TVL, according to DeFi Llama. Currently, the Lido 4.9% APR on ETH staked, has already attracted over 5 million ETH worth over $7.8 billion. For context, the total market capitalization of all ETH involved in the Ethereum 2.0 contract is around $27 billion, according to Staking Rewards. In addition, there are also SOL (Solana), GLMR (Moonbeam) and other tokens staked on Lido, representing a total of $8.04 billion in assets locked in the Lido protocol. LDO is the governance token of the Lido DAO, granting its holders the right to vote on proposed protocol changes.
Decentralized staking protocols could benefit from regulators’ crackdown on centralized staking services
Last week, crypto exchange Kraken made securities as it agreed to settle with the United States Securities and Exchange Commission (SEC) for failing to register its cryptocurrency staking product. The popular crypto exchange has agreed to pay $30 million in penalties and stop offering staking services in the United States. Although the dispute was resolved quickly, the SEC’s decision makes it clear that regulators strongly disapprove of centralized entities offering unregistered crypto services. While this may cause headaches for platforms offering similar offerings, the regulator’s crackdown could prove beneficial for decentralized staking services such as Lido, which will be much more difficult, if not impossible, to regulate.
Additionally, Lido developers recently introduced the proposal for the biggest Lido protocol update to date called Lido V2. By implementing a new Distributed Validation Technology (DVT), the protocol will transition to a new modular design, which will allow anyone to deploy staking on-ramps. Additionally, the upgrade will bring improvements to withdrawals, allowing all stETH holders to withdraw from the Lido at a 1:1 ratio. The launch of Lido V2 is expected to hit the testnet in March, while we can expect a mainnet rollout in March or April this year. The upgraded version of the protocol is expected to further strengthen Lido’s pole position among decentralized staking protocols.
TRON is a decentralized blockchain platform that aims to create a global digital content entertainment system with distributed storage technology. The platform allows users to publish, store and own data in a decentralized way, while also providing the ability to create and publish their own content. The project was founded by Chinese entrepreneur Justin Sun, and its development is overseen by the Tron Foundation, which was established in 2017. TRX is the native token of the TRON blockchain and is used to pay for transactions on the network and access various decentralized applications. built on the platform. Moreover, TRX is also used for decentralized governance purposes. Prior to the launch of the TRON mainnet, TRX existed as an ERC-20 token on the Ethereum blockchain. After launching its own blockchain in June 2018, TRON quickly became a major player in the blockchain industry and positioned itself as a competitor to Ethereum with a focus on providing high throughput and scalability for decentralized applications and content platforms. Like Ethereum, the TRON blockchain can also host custom TRON-based assets issued using the TRC10 and TRC20 standards. TRX is currently on 16e the largest cryptocurrency by market capitalization and the popularity of the network is still on the rise.
Tron Foundation Launches $100M AI Development Fund
Last week, the Tron Foundation announced the creation of a $100 million development fund that will support the development and growth of artificial intelligence (AI) projects and initiatives and their implementation on dApps. running on the TRON blockchain. Organizations working on AI-related TRON-based projects aligned with the Foundation’s mission and vision will benefit from both financial and technical support.
Initially, the AI development fund will focus on projects that work in four key areas, namely building an AI service payment platform, AI-infused oracles, management of AI-informed investments and AI-generated content. However, the development fund is only part of TRON’s broader push to integrate AI into its blockchain. Justin Sun, the founder of the project, recently tweeted that TRON will develop and offer an AI-oriented decentralized payment framework for AI systems such as the increasingly popular chatGPT. By providing resources and support to AI developers and organizations, the Tron Foundation aims to encourage the growth and adoption of AI technologies in a decentralized and open source manner. This, in turn, should contribute to the development of the wider TRON ecosystem and the growth of the TRON network.
Andrew is a writer who does most of his work on cryptocurrency-related topics. Although he is primarily interested in Bitcoin, he also follows major altcoins and the innovative ideas that new cryptocurrency and blockchain projects are bringing to the table.