1 Top Cryptocurrency to Watch Out for in 2022

0 0

Though cryptocurrencies have burnt investor wealth in 2022, the widespread adoption of these digital assets will be a key catalyst that will drive prices higher over the long term. With over 18,000 cryptocurrencies in circulation, it’s quite difficult to choose a single token that will help you derive exponential gains.

It’s imperative to analyze the utility of the underlying blockchain network, which, in turn, will spur demand for the cryptocurrency. With these factors in mind, let’s see why I am bullish on DeFiChain (CRYPTO:DFI).

What is DeFiChain?

A blockchain network built to augment the potential of DeFi, or decentralized finance, within the Bitcoin ecosystem, DeFiChain is valued at a market cap of US$2.2 billion. It’s a robust blockchain network that aims to solve issues related to security, decentralization, and scalability.

Launched in Q4 of 2019, DeFiChain is focused on replacing financial services offered by legacy players such as banks. As DeFiChain is a decentralized platform, it eliminates the need for any intermediary lowering transaction costs and boosting returns.

The initial products and services offered by DeFiChain include lending, asset tokenization, token wrapping, pricing oracles, and much more. In the last two years, the DFI token has returned over 2,600% to investors. However, the digital asset is also trading 20% below all-time highs, allowing you to buy the dip.

What is the DeFiChain Bridge?

Earlier this week, the blockchain network launched the DeFiChain Bridge, which connects DeFiChain with the BNB Chain of Binance (CRYPTO:BNB) to facilitate a fast and efficient transfer of liquidity between the two chains.

The DeFiChain Bridge will allow you to swap tokens between chains on a real-time basis, thereby unlocking opportunities for stakers and arbitrageurs. Basically, the functionality will remove the complexity associated with cross-chain transactions and will help DeFiChain attract capital from the BNB chain. Additionally, DeFiChain also disclosed it will launch a direct bridge to Ethereum in the upcoming months.

DeFiChain explained that transferring tokens on centralized exchange platforms is a time-consuming process that might require manual verification for large transactions. Alternatively, traders looking to benefit from arbitrage opportunities need to execute trades at a rapid pace.

Dr. Daniel Cagara, the lead project owner of DeFiChain Bridge, explained, “It has never been easier to enter the DeFiChain ecosystem from the BNB Chain. Now it’s possible for the BNB Chain investors to access DeFiChain’s high rewards and decentralized stocks. That allows users to leverage the benefits of both worlds without the need for centralized exchanges and the tedious processes involved in setting up the necessary accounts and credentials.”

The DFI token will act as a bridge token to transfer assets between the two blockchain networks. So, users can lock DFI on DeFiChain and mint wrapped DFI on the BNB Chain, which can then be converted to BNB or any other asset. In order to transfer tokens from the BNB Chain to DeFiChain, you need to burn wrapped DFI and gain access to native DFI on the DeFiChain.

Additionally, the DeFiChain Bridge provides a platform for APIs to enable wallets and service providers to integrate the service in a seamless manner. Developers building protocols on the DeFiChain can assess a larger and growing user base, as the bridge facilitates capital flows in an efficient manner.

The Foolish takeaway

The widening functionalities of DeFiChain make it one of the most exciting bets in the cryptocurrency space. However, similar to most other cryptocurrencies, investing in the DFI token also carries significant risk due to the volatility associated with the asset class.

The post 1 Top Cryptocurrency to Watch Out for in 2022 appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Binance Coin?

Before you consider Binance Coin, we think you’ll want to hear this.

Our nearly S&P/TSX market doubling* Stock Advisor Canada team just released their top 10 starter stocks for 2022 that we believe could be a springboard for any portfolio.

Want to see if Binance Coin made our list? Get started with Stock Advisor Canada today to receive all 10 of our starter stocks, a fully stocked treasure trove of industry reports, two brand-new stock recommendations every month, and much more.

See the 10 Stocks
* Returns as of 4/14/22

setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);

More reading

Market Pullback: 3 ETFs That Could Protect Your Portfolio in 2022
New to Investing? Buy These 3 Blue-Chip Stocks for Your Portfolio
These Long-Term Growth Stocks Are Some of the Best Dividend Stocks to Buy Now!
West Fraser (TSX:WFG) Stock: Why I’m Buying the Post-Earnings Bump
Retirees: 3 Passive Dividend Investing Tips

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum.

 71 total views,  2 views today

Leave A Reply

Your email address will not be published.

Generated by Feedzy