On the Merits of Digital Currency Tokens and Cryptocurrency Markets
Scroll DownJudging by the high volatility of the cryptocurrency markets, it is understandable to think that digital currency tokens are mostly within the realm of speculation, but there is another side to this market that many investors truly believe in based on the promise it holds and the fundamentals associated with it. We are talking about Decentralized Finance, more commonly referred to by its shortened DeFi name.
Decentralized finance technology is part of a new reality where you don't need to hold a bank account anymore, and banks are not centralized. You no longer have to trust them to transfer money, and you don't need to store any personal data about cryptocurrency transactions within blockchains to ensure the same integrity. This does not mean that banks are excluded from DeFi, in fact, banks can apply this technology to exert more granular control over their operations. They can start by developing their own technology, and have no idea how to operate their own money system. The blockchain, on the other hand, is a completely open system. So the banks can develop a different type of proprietary financial infrastructure without having to start from scratch.
DeFi developers take blockchain principles to very advanced levels, and they usually release tokens for the purpose of financing their projects. DeFi companies do not necessarily have to issue tokens for working capital; they can access private investors or even go public, but it makes sense for them to do so since they work on blockchains. Investors who take market positions on projects such as Holochain, which trades under the HOT symbol on major cryptocurrency exchange platforms such as Binance, are not looking for the token to become common currency. What they see in HOT is a technology that providers of financial services can implement in the future, so they are actually making an investment based on the fundamental promise the developers are in a good position to deliver.
Another DeFi project with a great potential is Orion, which trades under the ORN symbol. This protocol is designed to help banks and market makers organize their liquidity pools. This is the kind of platform that Wall Street could be using in the future, and it makes sense to hold ORN at this time.
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