A new report has shown that stablecoin issuers such as Circle (USDC) and Tether (USDT) currently own more US debt than Warren Buffet’s Berkshire Hathaway. Collectively stablecoin issuers now hold more than $80 billion of short-term US debt, which is just one insight into how integrated digital assets are becoming within the traditional financial framework.
As the sphere expands, so do the use cases of the protocols within it, and a new DeFi (decentralised finance) investment vehicle Gnox (GNOX), is showing significant improvement in yield generation strategies compared to Aave (AAVE) and Stacks (STX).
Gnox has brought much-needed simplicity to the convoluted DeFi investment process. By introducing a treasury funded via buy and sell taxes, the team at Gnox have created a token that exposes investors to DeFi without the usual time constraints and complications. Investors no longer have to worry about impermanent loss or rug pulls as the treasury does the heavy lifting on the investor’s behalf. Deployed in trusted protocols, every month the generated interest payment is swapped into BUSD and split amongst investors, similar to a dividend.
The mechanisms underlying Gnox hint at a preference for long-term holders, given that the principal sum of the treasury is never touched, only the interest payment conceptually GNOX holders should look forwards to receiving increasingly larger reflections with time.
Aave is a DeFi giant. With more than $6 billion of liquidity locked on the platform, it has firmly established itself as a leading protocol. Aave played a massive role in the proliferation of permissionless lending. This key growth area helped to expand DeFi’s real-world application. It bridged millions of investors with idle assets looking to generate yield with investors who wanted to use the capital for productive ventures.
Aave allowed investors to access loans via collateralisation of crypto assets and introduced flash loans. AAVE is the governance token, and holders receive discounts on platform fees. As the protocol draws more liquidity, AAVE will appreciate, typical of a governance token.
Stacks is a highly unique project and a layer one solution built on top of the Bitcoin network. Stacks introduces use cases and smart contract capability whilst retaining Bitcoin’s network as a settlement layer benefiting from its security. It employs its unique PoX (Proof of Transfer) consensus mechanism, which connects the distinct blockchains (Bitcoin and Stacks).
Stacks pioneered a trend which has become increasingly popular within DeFi, known as real yield. It is when interest payments come in the form of large-cap cryptos instead of protocol native tokens. STX holders can stake their tokens and receive BTC rewards, making this protocol appealing to many investors.
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