Messari researcher Ryan Watkins points out four small crypto assets in the Ethereum ecosystem. In his tweets, Watkins says cryptocurrencies could be part of a new decentralized finance (DeFi) paradigm emerging with the second largest blockchain.
“As Ethereum faces scaling challenges and interest in DeFi becomes parabolic, there is no better time for a parallel DeFi ecosystem to emerge.”
Watkins says that Terra (LUNA) generates the highest transaction fees after Bitcoin and Ethereum. The Messari researcher emphasizes that Terra is on the way to minting $ 3.8 billion in annual transaction volume, allowing the cryptocurrency to receive transaction fees of $ 26 million. Watkins says that from a fundamental point of view, Luna is a potential winner.
“If LUNA were to be treated like its counterparts by the end of the year, it would mean a price of $ 3.53.”
Watkins is also looking at decentralized credit platform Kava (KAVA). According to the researcher, Kava uses an interesting monetary policy as the platform burns Kava when interest is paid on inflation-fighting loans that reward Kava liquidity providers and stakers. In addition, Watkins points out that Kava has high ambitions including interoperability with the Cosmos ecosystem and the promotion of more synthetic assets.
The next coin on Watkins’ list is the decentralized oracle network Band Protocol (BAND), which integrates the blockchain world with off-chain events and data. According to the researcher, oracle coins like Band Protocol and ChainLink (LINK) are following a hot line this year. Watkins says the large gap between the current valuation of BAND and the value of LINK could indicate that the token has more potential.
Finally, Watkins says RUNE (THORChain) is worth mentioning because of its economic design with smart tokens that keep a significant portion of the coin out of circulation.
“The relationship between validators and [liquidity providers] means that the RUNE value staked and connected on the network must be at least three times the value of external assets held in liquidity pools.”
It also explains that RUNE acts as the basic pair for all assets supported by the decentralized liquidity network. Also, RUNE is used as collateral to control the movement of assets in liquidity pools.
To close the long thread, Watkins warns that although these cryptocurrencies are relatively cheap compared to their counterparts, the reverse potential is never a guarantee.
“It is important to remember that lower relative valuations do not necessarily mean underestimation, and there are many valid reasons why these projects are rated below their Ethereum counterparts.”