In 2023, Ethereum has staked its claim as the undisputed heavy-hitter of the crypto space, sitting comfortably as the second-largest digital titan by market cap, with only Bitcoin towering above. Ethereum's prominence is largely due to its pivotal role in facilitating the most transformative decentralized finance (DeFi), non-fungible token (NFT), and Metaverse applications. These projects are at the cutting edge of blockchain technology, and Ethereum is the backbone enabling their success.
The DeFi sector has seen phenomenal growth, with over $300 billion in assets currently locked within various protocols. Ethereum's smart contract functionality provides developers with the tools to create and launch innovative DeFi services, from lending and borrowing platforms to decentralized exchanges and stablecoins.
Boosting Ethereum's investment appeal is its recent shift from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus mechanism. This transition has set Ethereum on a deflationary path, leading to a progressively diminishing supply over time. Unlike Bitcoin, which is capped at 21 million, Ethereum's supply is set to become increasingly scarce, which could drive up its value. For real-time updates on Ethereum's burn metrics, check out ultrasound.money.
GMX is the second on our list for 2023 because it has been the fastest growing DeFi application this year and has been one of the best performing assets throughout the bear market. GMX is a decentralized exchange (DEX) that operates as a spot and perpetual exchange, making it a unique platform in the digital asset ecosystem. It is designed to support low swap fees and zero price impact trades, providing a more efficient and cost-effective trading experience for users.
In addition to its trading features, GMX also offers a staking program, allowing users to stake their GMX tokens and receive rewards from trading fees in return. Staked GMX tokens receive three types of rewards: Escrowed GMX, Multiplier Points, and ETH/AVAX rewards. The rewards are generated from the 30% of fees generated from swaps and leverage trading, which are converted into ETH/AVAX and distributed to staked GMX holders.
GMX's staking program provides an opportunity for investors to earn passive income from their GMX holdings, while also contributing to the platform's liquidity and growth. Furthermore, with the rise of decentralized finance (DeFi) and the increasing adoption of DEXs after the collapse of FTX and BlockFi, GMX is well-positioned to capture a significant share of the market in 2023.
Lido is a leading liquid staking solutionwith over $8 billion in total value lcoked that offers a simple and secure way to earn interest on digital assets. It is a protocol that manages deposits, staking rewards, and withdrawals, and operates a separate staking pool for every supported network, including Ethereum, Solana, Polygon, Polkadot, Kusama, and Terra.
By staking with Lido, users can earn extra yield on top of yield by leveraging collateral, lending, yield farming, and other DeFi protocols. Unlike staked assets, Lido's stTokens are freely transferable, allowing users to operate with staked assets without being locked in. This provides a high degree of flexibility and liquidity to investors, making Lido a popular choice in the DeFi ecosystem.
In conclusion, Lido's liquid staking solution and flexible stToken, along with its DAO governance structure, make it a promising investment in 2023. As the DeFi ecosystem continues to grow, the demand for staking solutions that provide flexibility and immediate liquidity to investors is likely to increase, positioning Lido as a strong contender in the digital asset market.
Aave is a decentralized non-custodial liquidity market protocol that allows users to participate as suppliers or borrowers. Aave's V3 market offers greater capital efficiencies, increased security, and cross-chain functionality, while facilitating increased decentralization across the protocol. The platform is currently the largest money-market by total value locked with over $4.5 billion in assets locked on the platform.
However, the most promising opportunity for growth with Aave in 2023 is its upcoming stablecoin, GHO. GHO is a decentralized, multi-collateral stablecoin that is fully backed, transparent, and native to the Aave Protocol. Unlike many other stablecoins, the oracle price for GHO will be fixed, making it transparent and unchangeable. Interest rates for GHO are defined by the Aave DAO, and repaid interest is redirected to the DAO instead of the asset suppliers. Borrowers staking AAVE in the Safety Module are eligible for a discount on GHO's borrowing rate.
The Aave DAO will manage the supply of GHO, the interest rates, and determine the risk parameters. This unique structure and functionality of GHO make it a highly promising investment for 2023 in the digital asset market. This is especially true as centralized stablecoins like USDC, BUSD and USDT come under increasing scrutiny from the SEC and other global regulators and decentralized alternatives come into demand.
5. Stargate Finance
Stargate Finance is a community-driven organization that is building the first fully composable native asset bridge, making cross-chain liquidity transfer a seamless, single transaction process. DeFi users can swap native assets cross-chain on Stargate within a single transaction, allowing them to swap USDC on Arbitrum for ETH or USDT on Arbitrum, for example.
Additionally, applications can compose Stargate to create native cross-chain transactions at the application level. Stargate is the first cross-chain DEX to solve the bridging trilemma, offering instant guaranteed finality, native assets, and unified liquidity across multiple chains. Stargate's unified liquidity pools are community-owned, and the platform charges a 6 bps fee for each non-STG transfer, which is allocated as follows: 4 bps to the protocol treasury, 1 bp to veSTG holders, and 1 bp to liquidity providers
Stargate's unique structure and functionality make it a promising investment in 2023, as it offers a solution to the current challenges faced by existing bridges, providing users and applications with deeper liquidity and a reliable, seamless, and single transaction cross-chain swapping experience. As the demand for cross-chain interoperability and liquidity transfer continues to grow in the DeFi ecosystem, Stargate Finance is well-positioned to become a leading player in the digital asset market.
Why is Crypto Still a Promising Investment in 2023?
Crypto remains a promising asset class in 2023 due to its unique characteristics and its increasing adoption and integration into mainstream financial systems. The limited supply of many cryptocurrencies, combined with their growing demand, has led to a significant increase in their value over time. Additionally, the acceptance of cryptocurrencies by major financial institutions and corporations has further legitimized the asset class and contributed to its growth.
Furthermore, the growth of decentralized finance (DeFi) applications and non-fungible tokens (NFTs) has opened up new opportunities for investors to participate in the crypto space. DeFi applications provide investors with greater access to financial services and opportunities, while NFTs allow for the ownership and trading of unique digital assets. In summary, the combination of limited supply, increasing adoption and integration, transparency, security, efficiency, and new opportunities in DeFi and NFTs make crypto a promising asset class in 2023 and beyond.
Which Crypto Will Explode in 2023?
The answer is Ethereum. Its recent transition to a Proof-of-Stake (PoS) consensus model has set it on a deflationary course, leading to a progressive supply squeeze. With an ever-increasing demand for blockspace driving more ETH burns, Ethereum is facing a potential supply crisis. This scarcity, coupled with its pivotal role in enabling transformative decentralized finance (DeFi) applications, positions Ethereum as the digital asset to watch.
What is the Methodology to Determine the Best Cryptos to Invest in?
There are several key factors that investors can consider when looking for a good long-term crypto investment:
- Market Capitalization: Look for cryptocurrencies with a high market capitalization as they are generally more established and have a larger user base.
- Adoption: Consider the level of adoption of the cryptocurrency in the real world. Does it have partnerships with major institutions or is it being used in real-world applications?
- Technology: Evaluate the underlying technology of the cryptocurrency. Is it innovative? Does it solve a real-world problem?
- Community: Consider the size and activity level of the cryptocurrency community. A strong community can help promote adoption and development of the cryptocurrency.
- Development team: Look at the experience and credentials of the development team behind the cryptocurrency. A strong team with a track record of successful projects can indicate a higher chance of long-term success.
- Tokenomics: Evaluate the tokenomics of the cryptocurrency. Is the supply of the cryptocurrency fixed or inflationary? Are there incentives for holding the cryptocurrency?
- Risk tolerance: Assess your own risk tolerance and investment goals to determine whether a particular cryptocurrency aligns with your investment strategy.
By considering these factors, investors can better assess the long-term potential of a cryptocurrency and make informed investment decisions.
In 2023, Ethereum, GMX, Lido, Aave, and Stargate Finance emerge as top crypto investments, each offering unique growth potential. Ethereum's new deflationary path, GMX's rapid growth and staking rewards, Lido's liquid staking and DAO governance, Aave's upcoming GHO stablecoin, and Stargate's innovative cross-chain liquidity solutions make them standout choices.
Despite its complexities, the crypto landscape offers exciting opportunities, with careful consideration of factors like market capitalization, adoption rates, technology, community, and tokenomics key to informed investment decisions. Stay tuned for more insights in this rapidly evolving space.