8 Early Tokens That We're Aping
Dear Bankless Nation,
It's been a brutal bear market, but crypto investors won't stop searching for new opportunities. Last week, a Senior Analyst on our team floated 10 projects that he believed would survive the bear market.
This week, we went wider – asking team members and paying Bankless subscribers which tokens they actually were loading up on right now.
- Bankless team
They say wisdom can be learned from the crowds, so we decided to ask the Citizens of the Bankless Nation and the Bankless Team one simple question: what are you buying?
To keep things interesting, I only included tokens on this list that are outside the top 100 largest tokens by market cap. I further curated the list based on my own impressions of unique market opportunities which I detailed below each selected token.
The full list of projects (in no particular order) is for Paid Subscribers only:
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🟡 Y2K Finance
Website | Twitter
Sector: Derivatives
Fully Diluted Value (FDV): $20.7M
Ticker: Y2K
What is it?
Y2K Finance allows crypto traders to hedge against or speculate on the possibility that a particular asset deviates from its “fair implied value.” In layman's terms, Y2K Finance has created an insurance marketplace for depegs. Anyone can purchase insurance against a depeg, or sell insurance to earn premiums from traders.
Simply choose the stablecoin or liquid staking derivative you are looking to provide or purchase protection on and select a maturity and strike price that works for you. Remember that while selecting a strike price further from the peg of the underlying is cheaper, you’ll have a lower likelihood of receiving a payout!
Why might the Bankless Nation be bullish?
The investment case for Y2K Finance shone bright in the aftermath of the March banking crisis. With stablecoins like USDC and DAI depegging, Y2K Finance’s products began paying out and the protocol’s use case became clear.
Investments in protocols that thrive during a chaotic market can help to diversify your portfolio and provide a modicum of relief during the worst of market conditions.
🟣 StakeWise
Website | Twitter
Sector: Liquid Staking
FDV: $84.1M
Ticker: SWISE
What is it?
StakeWise is a liquid staking service provider with a fairly undesirable feature set under its current V2 implementation, which uses a two-token model (representing your deposit and accrued ETH rewards) that has failed to catch on among LSD holders, and relies on a permissioned validator set.
The long-awaited V3 upgrade is prophesied to have the potential to reinvigorate StakeWise, transitioning the protocol’s LSD into a single token and implementing a modular staking architecture. Under this structure, stakers can select the party that will operate their node and have the ability to choose from StakeWise’s node operators; a group of solo stakers; a single solo staker; or a mix of solo stakers, communities, and organizations of any kind.
Why might the Bankless Nation be bullish?
Lido has continued to dominate the staking landscape, even in a post-Shapella Ethereum, raising alarms within the Ethereum community. Investors are now looking for alternatives and it certainly appears like StakeWise’s impending V3 upgrade could make it one.
With its innovative modular architecture, StakeWise is bringing a radical degree of customizability to the staking game. This may help in attracting an untapped cohort of stakers who would want to run their own nodes via “Squad Staking” with DVT technology while retaining liquidity on their stake, helping StakeWise carve out a slice of staking market share without needing to attract deposits from Lido, which have had a high degree of stickiness.
🔵 Liquity
Website | Twitter
Sector: Stablecoins
FDV: $93.4M
Ticker: LQTY
What is it?
Liquity is the protocol behind the LUSD stablecoin. It allows anyone to take out a 0% interest USD-denominated loan against their Ether and redeem LUSD for the underlying collateral at any time.
To bulletproof the protocol, Liquity makes use of immutable smart contracts, meaning that nobody can alter the rules of the system. All operations are algorithmic and fully automated, and protocol parameters are set at the time of contract deployment, making Liquity crypto’s most secure and decentralized iteration of the stablecoin.
Why might the Bankless Nation be bullish?
Silicon Valley Bank imploded back in March and during the crisis, crypto found itself fixated on the $3B in USDC reserves held by Circle in the failing financial institution. Had the FDIC not ultimately decided to backstop the bank, USDC would have become undercollateralized and its HODLers would have found themselves with a partial recovery in the best case or completely wiped out in the worst.
In the aftermath of this event, crypto gained a newfound appreciation for truly decentralized stablecoin alternatives and Liquity is the clear leader in this market.
🟢 Canto
Website | Twitter
Sector: L1
FDV: $106.6M
Ticker: CANTO
What is it?
Canto is a Proof of Stake network built on top of the Cosmos SDK, complete with an EVM execution layer, that wants to revolutionize the way crypto funds blockchain development.
As part of its Free Public Infrastructure approach, Canto created a zero-fee, ungoverned, and immutable DEX; a lending market that gives governance control over to CANTO stakers; and a stablecoin that contributes revenues from interest income towards public goods. Additionally, the chain allows smart contract devs to claim 20% of the transaction fees generated by users interacting with their smart contract as part of Canto’s Contract Secured Revenue scheme.
Why might the Bankless Nation be bullish?
It is hoped that by bringing public infrastructure to the blockchain, the operation of Canto’s core primitives will naturally align with the public interest, resulting in a healthy and robust ecosystem free from zero-sum games.
Canto unlocks a new frontier of profitability for projects by sharing transaction fees back with devs, creating a new blockchain business model where protocols charge zero fees to users and aim to maximize the amount of times they use the dApp. Under this paradigm, incentives are actively aligning the interests of developers with stakers. Potentially, these changes to the fee models of standard blockchains could make new crypto use cases profitable and attract a new class of protocol to Canto.
⚪ Pendle
Website | Twitter
Sector: Yield Splitting
FDV: $173.3M
Ticker: PENDLE
What is it?
Pendle is a yield trading protocol that allows users to split yield-bearing tokens (i.e.; stETH) into principal and yield components. Users can execute a variety of exciting yield strategies with Pendle, like fixing yields on variable rate collateral and levering up on variable rate exposure.
There is a massive knowledge barrier imposed by the financial constructs underlying Pendle’s core protocol mechanics, but the Protocol successfully abstracts away any complications in “Simple Mode.” Users are presented with the ability to purchase crypto assets at a discount in this mode, however, the reality is that they are simply fixing their yield!
Why might the Bankless Nation be bullish?
Many established DeFi protocols have found it difficult to amass TVL during the bear market. Pendle has been a clear exception to this norm, increasing protocol TVL by over 670% since the beginning of the year!
Multiple factors likely underlie Pendle’s rapid growth, including the implementation of ve(3,3) tokenomics in November 2022, which incentivizes fees instead of passive liquidity, and the rise of LSD-Fi, which has only been perpetuated since Shapella’s derisked ETH staking.
⚫ Radiant
Website | Twitter
Sector: Lending
FDV: $308.5M
Ticker: RDNT
What is it?
Radiant is a lending market deployed to Arbitrum and BNB Chain built on top of LayerZero’s Omnichain Fungible Token standard (OFT), a messaging primitive that can securely transfer any fungible token across chains without the need for asset wrapping, middle chains, or liquidity pools.
Users can provide collateral on one chain and borrow on another, while paying fees from the origin chain, allowing this lending protocol to fulfill some of the duties traditionally carried out by bridges!
Why might the Bankless Nation be bullish?
Radiant has held a commanding position in the Arbitrum universe, long being the highest ranked lending platform by TVL on the chain, yet the protocol’s path towards multichain dominance and potential to expand well beyond its roots is the main story.
With many dApps now looking to spin up their own chains, the probability we have a multichain future is higher than ever and Radiant is in an excellent position to capitalize in this scenario! By blurring the boundary between lending market and bridge protocol, Radiant should be able to better serve the long tail of blockchains, allowing it to steal away market share from more established players, like Aave and Compound.
🔴 Treasure
Website | Twitter
Sector: Gaming
FDV: $293.8M
Ticker: MAGIC
What is it?
Treasure is a decentralized gaming platform on Arbitrum that serves as an asset marketplace, hub for game discovery and distribution, center for tournaments and events, and more for the community-driven games and metaverses that have integrated with it.
Projects listed within Treasure all utilize the MAGIC token within their respective worlds and each community creates its own unique lore and storytelling around the asset. Treasure DAO hopes to serve as a beacon of decentralization within the broader NFT ecosystem.
Why might the Bankless Nation be bullish?
Treasure has continued to demonstrate its ability to attract games to its ecosystem, onboarding multiple games since March, including ZeeVerse, a monster-tamer MMORPG, and Spark Defense, a MOBA tower-defense game.
In collaboration with The Beacon, one of the largest and most popular games within the Treasure ecosystem, Treasure DAO is set to revamp harvesters within Bridgeworld, which will allow MAGIC holders to stake their tokens to receive emissions and could contribute to newfound demand for the token.
🟣 Aura
Website | Twitter
Sector: Yield
FDV: $161.7M
Ticker: AURA
What is it?
Aura is a yield protocol built to deliver maximum incentives earned by Balancer’s liquidity providers and vote escrowing system.
For Balancer liquidity providers, Aura can abstract away the complexities of gauges, while allowing them to earn juiced yields thanks to “boosts” received in protocol-owned veBAL. In exchange for their service, Balancer vote escrow stakers on Aura earn a portion of the fees charged by the Protocol to liquidity providers.
Why might the Bankless Nation be bullish?
Much like Convex has established an insurmountable lead in the Curve governance wars, Aura has done the same for the Balancer ecosystem.
Weighted pools are a unique type of liquidity pool offered by Balancer and they underpin many protocols' governance token staking lockers, including Balancer’s itself! They represent a superior solution to single token staking models, as it allows protocols to direct token emissions to rent ETH liquidity.
Should the weighted pool model be adopted by a major DeFi protocol, a plausible event given the benefits it provides, Balancer would likely see a massive wave of adoption. Aura has established itself as the leader within Balancer’s yield ecosystem and it is likely that they will grow in tandem.
Action steps
- 🪙 Check out other tokens we're bullish on in the Token Hub
- 👁️ Read 10 Altcoins that will Survive the Bear