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10 new DeFi potential projects worth early investment

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Inventory of 10 new DeFi potential projects on Ethereum, Arbitrum, and other platforms.

Original Title: "These 10 New DeFi Potential Projects are Worth Early Investment"

Original Source: Karen, Foresight News

This article will list 10 new DeFi potential projects for readers, as well as their respective features or innovations. However, most projects are still in the early stages of development, so users are reminded to interact with caution and DYOR.

Morpho: Ethereum-based lending optimization protocol

Morpho can be considered as a loan pool optimizer, which is a peer-to-peer layer built on top of loan pools such as Compound and Aave. It improves the capital efficiency of the loan pool by seamlessly matching lenders and borrowers, while preserving the same liquidity, liquidation guarantees, and risk parameters associated with the underlying protocols. As of the time of writing, all liquidity provided through Morpho amounts to nearly $300 million, with a total borrowing volume of $156 million.

As is well known, in current general loan agreements, the loan amount and the borrowing amount in most pools are seriously mismatched, resulting in a serious mismatch between the interest paid by the borrower and the interest earned by the lender, and the capital efficiency is also relatively low. So how does Morpho improve capital efficiency?

Morpho mainly achieves win-win results by matching user borrowing and lending needs through a priority queue. Specifically, users are sorted based on the amount they want to lend or borrow. When a lender provides liquidity to a protocol, their liquidity is first matched with the largest borrower, then with the second largest, third largest, and so on, until the provided liquidity is fully matched or there are no more borrowers to match. Conversely, when a borrower is ready to borrow liquidity, they are first matched with the largest lender, and so on. Given the possibility of multiple matches, Morpho also takes into account gas consumption and allows users to customize the maximum gas value. If the gas cost reaches the maximum value, the remaining unmatched liquidity will return to the base pool.

That is to say, Morpho lending users can obtain the APY of the underlying pool at worst, and will receive an enhanced P2P APY when their funds are matched. In both cases, users will always receive rates equal to or better than those of the underlying protocol.

Regarding rewards, Morpho will accumulate rewards on behalf of users from the underlying protocol, and will also distribute its own token MORPHO to users.

Morpho completed a $18 million financing round in July this year, led by a16z and Variant, with participation from Nascent, Semantic Ventures, Cherry Ventures, Mechanism Capital, Spark Capital, Standard Crypto, Coinbase Ventures, and others.

Link: https://www.morpho.xyz/

Sturdy: Interest-free lending and yield agreements

Sturdy Finance is an interest-free loan and revenue agreement. According to official documents, the Sturdy team consists of native crypto workers who previously worked for Polymath, Gelato Network, and Injective Protocol. In March of this year, they completed a $3.9 million seed and strategic round of financing, with Pantera Capital leading the investment and Y Combinator, SoftBank's Opportunity Fund, KuCoin Ventures, mgnr, One Block Capital, Dialetic, and Orange DAO participating.

Sturdy is currently live on Fantom and Ethereum, and will collateralize the collateral provided by borrowers into DeFi protocols such as Yearn, Convex, and Lido. The staking rewards will be used to pay the interest of depositors. Sturdy has explicitly stated that it will release governance tokens in the future.

Regarding interest rates, borrowing on Sturdy is interest-free for borrowers. However, if the asset utilization rate exceeds 80%, an additional 3% interest rate must be paid for every 1% increase in utilization rate. When the health factor is below 1, it will be liquidated. For lenders, they can obtain a relatively stable rate of return.

Last week, Sturdy announced the issuance of the STRDY token and will airdrop early users and partners. The airdrop for partner users will be announced daily.

Link: https://sturdy.finance/

Perennial: Derivative Agreement

Perennial is a derivative protocol that announced a $12 million funding round led by Polychain Capital and Variant earlier this month. Other investors include Archetype, Coinbase Ventures, Scalar Capital, Robot Ventures, and more. Perennial's two co-founders, Kevin Britz and Arjun Rao, previously co-founded Astro Wallet in 2017, which was later acquired by Coinbase.

Perennial uses a DeFi-native trading model, which means no order book, zero slippage, permissionless leverage, and DeFi-specific markets (such as Squeeth) and composable positions. Perennial acts as a point-to-pool derivative AMM, where traders deposit collateral to gain leveraged exposure and liquidity providers can provide funds for the fees paid by traders.

In addition, Perennial also considers itself as a derivative underlying protocol, allowing developers to launch any synthetic market with just a few lines of code. Tools built on top of the protocol can simplify and automate the participation of retail users. Perennial's initial core features include "spot pool AMM", settled in US dollars, and LP flexibility.

As of the time of writing, the total amount of funds provided by liquidity providers on the Ethereum mainnet within one week of Perennial's launch was $1.8 million, with open positions of traders exceeding $40,000. Although the current trading activity of Perennial is relatively low, it may be worth keeping an eye on as they have not yet released their token.

Link: https://perennial.finance/

Panoptic: Uniswap-based Non-Oracle Perpetual Option Protocol

Panoptic was founded in July by Kristensen, former head of research at Advanced Blockchain AG, and Guillaume Lambert, a professor of applied physics at Cornell University. The goal of the project is to establish a perpetual, oracle-free decentralized cryptocurrency options trading protocol.

Unlike typical options agreements, the Panoptic protocol does not use a clearinghouse to settle options, but instead uses LP positions in Uniswap V3 as the basic building blocks for trading long and short options. Its core features include never expiring, anyone can deploy an options market on any asset without permission, and anyone can lend funds to options traders as liquidity providers.

Undeniably, Panoptic will provide options trading opportunities for long-tail assets, but potential risks also exist, such as high leverage ratios, paying a large premium for options, and liquidation risks. Mechanically speaking, when the option buyer transfers the liquidity pre-deployed by the seller from the Uniswap V3 pool to Panoptic, Uniswap trading activity will generate LP fees owed by the buyer to the seller, which is the source of the premium. For readers interested in the Panoptic mechanism, click this official documentation link to learn more.

Panoptic plans to launch its platform in the first quarter of next year. The first version will be based on Uniswap's automated market maker (AMM), with plans to support other AMMs in the future.

Panoptic has completed a $4.5 million financing this month, led by Gumi Cryptos Capital, with participation from Uniswap Labs Ventures, Coinbase Ventures, Jane Street, SevenX Ventures, and the Blizzard Fund of the Avalanche Foundation.

Link:https://www.panoptic.xyz/

Fluidity: Liquidity Incentive Layer

Fluidity completed a $1.3 million seed round of financing led by Multicoin Capital in October this year, with advisors including investors such as ZachXBT. The project will be built on Ethereum and Solana, and has launched on the Ethereum mainnet today, after previously launching on the Ropsten testnet and Solana Devnet in January.

Fluidity will package the stablecoin assets deposited by users into Fluid Assets in a 1:1 ratio to the protocol. When users use, send, or receive Fluid Assets assets on the chain, they will receive rewards. The rewards are generated by the accumulated yield of Fluidity's deposit and lending of these underlying assets in other currency markets. Users can redeem the underlying assets at any time.

When it comes to reward distribution, Fluidity has created a lossless reward savings pool that randomly allocates different sizes of rewards to users who use Fluid Assets. The payment mechanism is determined by the Transfer Reward Function (TRF) function, and the specific allocation will be based on the size of the reward pool, the frequency of Fluid Assets transactions, the gas fees paid, and the random reward layers. The allocation is randomized and can be found at this link.

Fluidity also allows developers to specify the allocation and timing of these rewards. Use cases for Fluid Assets include sending, receiving, and trading tokens, minting, trading, and selling NFTs, and executing trades on DEXs. Fluidity is building a universal incentive mechanism that can be embedded in different systems, platforms, and protocols.

Overall, Fluidity allows users to obtain wrapped tokens without losing stablecoins. In order to incentivize the liquidity of wrapped tokens, a random reward mechanism is being built. In addition, Fluidity proposes to use the concept of Utility Mining to distribute most of the governance tokens, in order to guide liquidity. For more information on the governance token economics, please refer to this.

Link: https://fluidity.money/

Spectral: Credit Risk Assessment

Spectral has established an on-chain credit scoring system equivalent to traditional FICO scores, called the Multi-Asset Credit Risk Oracle (MACRO) score, which allows users to check on-chain scores through its platform. Spectral has already launched the V0.3.0 beta version of its on-chain credit scoring system on the Arbitrum testnet, allowing users to obtain on-chain credit scores based on their on-chain interaction activities.

Currently, we can mint non-fungible credit (NFC) tokens in Spectral based on on-chain interaction activities. Spectral also allows users to bundle any number of addresses to represent the overall credit of multiple addresses with a MACRO score on NFC. The main wallet will receive NFC, and the MACRO score will also be improved due to the length of credit records and the diversification of credit combinations.

NFC represents our creditworthiness in the DeFi lending market, and is fully programmable and combinable, with the potential to become the foundational infrastructure for credit risk assessment in the DeFi world.

Spectral completed a $23 million financing round in August this year, led by General Catalyst and Social Capital, with participation from Samsung, Gradient Ventures, Section 32, Franklin Templeton, Circle Ventures, and Jump Capital.

Link: https://www.spectral.finance/

Nibiru: Cosmos Ecological DeFi Hub

Nibiru is not only a Cosmos-based PoS blockchain platform, but also a DeFi Hub that supports derivative and spot trading. In September of this year, Nibiru completed a $7.5 million seed round of financing with a valuation of $100 million, with investors including Tribe Capital, Republic Crypto, and Kraken.

Nibiru's ecosystem includes perpetual futures contract agreement Nibi-Perps, spot trading agreement Nibi-Swap, and some collateralized stablecoin NUSD. Among them, Nibi-Perps has launched a public testnet, and the initial testnet version is based on virtual AMM mechanism, with positions settled in USDC.

Link: https://nibiru.fi/

Exponential: DeFi Rating and Investment Protocol

Exponential completed a $14 million seed round of financing led by Paradigm in October. Exponential is not only a DeFi rating protocol, but also an investment protocol that can easily discover, evaluate, and invest in cross-chain liquidity pools. It can also evaluate one's own wallet address to analyze investment risks. Exponential will also personalize the best liquidity pool recommendations based on the user's risk tolerance.

Currently, Exponential allows users to analyze wallet risks and explore risk-return opportunities in funding pools, and has opened applications for investment waiting lists.

Link: https://exponential.fi/

nftperp: NFT Perpetual Contract Protocol on Arbitrum

The NFT perpetual contract trading platform nftperp has launched its Beta mainnet on Arbitrum One, allowing users to long or short blue-chip NFTs by staking WETH instead of NFTs, with a maximum leverage of 5x.

Nftperp's trading mechanism uses a virtual automated market maker (vAMM) model, which does not require real liquidity providers or an order book. Traders deposit assets into a smart contract Vault, where all losses and gains are processed.

nftperp has also recently completed a $1.7 million seed round of financing, with participation from Dialectic, Maven 11, Flow Ventures, DCV Capital, Gagra Ventures, AscendEX Ventures, Perridon Ventures, Caballeros Capital, Cogitent Ventures, Nothing Research, Apollo Capital, Tykhe Block Ventures, and OP Crypto.

Link: https://nftperp.xyz/

Vertex: DEX on Arbitrum

Vertex is a DEX on Arbitrum, covering spot, derivatives trading, yield, lending and other services. Vertex was originally planned to be launched on Terra, but ultimately decided to launch on Arbitrum. It is currently live on the public testnet of Arbitrum.

Vertex combines the advantages of order book and AMM, and the core protocol is an on-chain trading protocol with an off-chain order book (constant product AMM). The order book is an off-chain sorter used for order matching, and the liquidity of the AMM pool is injected into the off-chain order book, providing traders with deeper liquidity, smaller spreads, and slippage.

Vertex has briefly outlined the token economics in its official documentation. In addition to the VRTX token, it will also create a liquidity staking token xVRTX and a non-transferable voting token voVRTX.

Link: https://vertexprotocol.io/