🔥 Real-world loans tokenization: Decentralized Finance (DeFi) empowers investors by transforming various assets into digital tokens, including debt instruments. Through tokenization, traditional debt instruments like corporate bonds or treasuries can be converted into digital tokens. This enables fractional ownership, seamless trading on decentralized exchanges, and composability with other smart contracts such as lending protocols where these tokens can be used as collateral. This innovation opens up new avenues for investors to participate in debt markets, enhancing liquidity and potentially streamlining the process of debt issuance and trading. Some recent successes are OpenEden, which offers exposure to US Treasury Bills or Jia which provides microcredit to businesses in Africa and South-East Asia.
🥶 Stablecoins: Over the course of a year, the sector witnessed the collapse of Terra UST’s stablecoin and a bank run on Circle’s USDC stablecoin. After rapid development, stablecoins have shown their limitations, whether algorithmic or backed by fiat. Innovation in stablecoins has taken a hit, and the product is currently less hyped. However, stablecoins are a major innovation enabling the original vision of Bitcoin: seamless peer-to-peer digital value transfers. They are also a great business as increased interest rates across the globe means the collateral can fetch much higher yields. More innovation is in preparation with projects like Curve or AAVE launching their own stablecoins. While cold, this topic is likely to become hot again very soon.
🥵 Community management platform: In web3, the aggregation of a strong community is often essential for the launch and success of a project. We have therefore seen a multitude of platforms that help startups bootstrap their early adopters. The French company Zealy quickly became one of the market leaders thanks to flawless execution. However, more and more platforms such as Guild.xyz, Layer3 or Superfans are launching and gaining market share due to low barriers to entry. The market is increasingly congested and we will most likely see a race to the bottom.