The world of finance is experiencing a paradigm shift, with traditional finance (TradFi) and decentralized finance (DeFi) finding common ground. This connection is not just desirable, but critical for the expansion of blockchain-based solutions into mainstream finance. We’ll review the main projects making significant progress in this area.
1. Stellar: The Universal Payment Network
Stellar, with its multitude of fiat stablecoins, links banks, payment systems and individuals quickly and reliably. It is designed to facilitate cross-asset transfers, including payments, with a particular focus on the underbanked. Stellar’s anchor institutions serve as bridges between existing currency silos and the network, making it a significant player in uniting TradFi and DeFi. Pendulum’s Spacewalk bridge is the first tool to connect the stellar and Polkadot ecosystems, opening up DeFi use cases for Stellar stablecoins, including the Brazilian Real (BRZ), Tanzanian Shilling (TZS) and many more. You can learn more about Stellar’s mission and impact here.
2. Centrifuge: Real World DeFi
The Polkadot parachain Centrifuge creates a link between real-world assets and DeFi, allowing businesses to access liquidity locked in their assets through tokenization. By enabling these businesses to connect their assets to the DeFi ecosystem, Centrifuge is not only democratizing access to finance but also seamlessly bridging the gap between TradFi and DeFi. For more on Centrifuge’s role and achievements, click here.
3. Coinbase: Gateway to Cryptocurrencies
As one of the leading cryptocurrency exchanges, Coinbase plays an essential role in introducing and integrating TradFi investors to DeFi. Their wallet offers access to an array of services, including staking, lending, and yield farming. Coinbase is the largest US-based crypto exchange and second largest exchange in the world by trading volume with a giant user base of over 100 million. By simplifying the first gateway into crypto services for millions of individuals and institutions, Coinbase is propelling the integration of the traditional and decentralized finance sectors.
4. MakerDAO: Builders of DAI
MakerDAO is a decentralized credit platform on the Ethereum blockchain that supports the stablecoin DAI. By allowing users to lend and borrow assets, MakerDAO provides a critical link between the world of traditional finance and DeFi. 80% of MakerDAO revenue comes from real world assets (RWAs). Its $2 billion RWA portfolio, encompassing treasury bonds and various assets, bridges the gap between crypto and traditional finance. The governance token, MKR, allows holders to vote on the risk parameters of the system, reinforcing its decentralization ethos.
5. Nabla: Bringing Forex Onchain
Nabla, being developed on Pendulum, is an Automated Market Maker (AMM) tailored for Forex. It supports both stablecoins and real-world assets. With its unique design, Nabla boosts capital efficiency by adopting more PMM (Proactive Market Maker) mechanisms. It allows for single sided liquidity provision, eliminating impermanent loss. Nabla’s goal is to be the primary on-chain liquidity hub for fiat stablecoins. Find the Nabla Whitepaper here.
Pendulum: Accelerating Financial Inclusivity
Pendulum (this is us!) is laying down blockchain foundations that empower dApps like Nabla and Fintech companies to build financial services on top of the Pendulum Polkadot parachain. Thus, allowing builders to harness Stellar’s fiat stablecoins within the DeFi realm. This is especially pivotal in regions like Latin America and Africa, where there’s a current lack of financial services. For a comprehensive glimpse of Pendulum dive into this demo.
Undoubtedly, beyond these six initiatives, numerous other projects are making significant strides in bridging the gap between traditional finance and Web3. These pioneers’ work in creating a more inclusive and accessible financial system is ongoing, and the full impact of their efforts is yet to be seen. Become a part of Pendulum’s growing community and join us in bridging Forex with the world of DeFi. Follow us on social media for the latest updates, and discover how you can be part of this important journey!
Pioneering the internet of fiat. Amplitude is the sister network of Pendulum on Kusama. It will act as a testing ground for Pendulum applications and network parameters and be powered by the AMPE token.
Building the missing link between fiat and DeFi through a fiat-optimized smart contract blockchain based on Polkadot’s Substrate. Allowing traditional finance fiat services to integrate with DeFi applications such as specialized forex AMMs, lending protocols, or yield farming opportunities. Developed by SatoshiPay.
Keep your eyes on the Pendulum!