Decentralized financial applications (DeFi) have become one of the fastest growing categories of projects in the crypto market. The concept offered the community the opportunity to trade, exchange, and lend against crypto assets directly between users without the participation of intermediaries. And the rapid development of the market for such applications has revealed the need to create additional services and networks necessary for the safe and uninterrupted operation of DeFi.
The fact is that DeFi mainly operates on the basis of smart contracts, which are automated programs that fulfill certain conditions of a transaction between two or more parties based on blockchain technology. However, in order to fulfill these conditions, smart contracts must receive reliable data from outside. To fulfill the contract, the smart contract must know from somewhere that certain conditions have occurred. For example, if it is a lending service, then the program must know the price of the collateral in order to correctly calculate the loan and interest on it. In the traditional world, these functions are performed by centralized organizations that have to be trusted. And since cryptocurrencies are built on the principles of decentralization and censorship resistance, there is a need to create specialized services that can be trusted to deliver sensitive data, such as, for example, the price of an asset.
Oracles in cryptocurrencies are blockchain services that collect and deliver “fair” data for smart contracts that are responsible for the execution of the contract in blockchains. This data includes not only the price of any assets or goods. Their list of tasks may include tracking data on real-world events that will be used for prediction markets. For example, Polymarket, a platform for betting on the outcome of real events that works on smart contracts, needs special oracles. These services transmit information to determine the “fairness” of a particular event.
Many of the projects that fall into the blockchain oracle category issue tokens as a tool for better messaging (information) between programs or as incentives for participants who will help the project collect, supply or process “fair” data. The total capitalization of such projects, which include about 50 tokens, amounted to almost $ 10 billion with a daily trading volume of more than $ 650 million, according to Coingecko (as of the end of September). The majority of the capitalization of the blockchain oracle sector belongs to just two projects: Chainlink and Pyth Network. They account for about 85% of the total estimated value of such projects.
Chainlink is a network of decentralized oracles, founded by Sergey Nazarov. In July 2017, the project sold LINK tokens through an ICO with a token price of about $ 0.09. As of the end of September, the token price was $ 11.5, which is more than 12 thousand percent growth. Chainlink partners include the international interbank information transfer and payment system SWIFT, Google’s cloud service, the National Basketball Association (NBA), and the National Information Center of the People’s Republic of China. According to the project’s website, the ecosystem includes more than 2.2 thousand services and companies using the services of decentralized oracles Chainlink.
Pyth Network is a network of oracles for data collection, launched in 2021. It has raised an undisclosed amount in three rounds of funding from Multicoin Capital, the venture arm of market maker Wintermute, and other crypto funds. According to information on the website, the project’s services are used by more than 400 DeFi in more than 75 blockchain networks. Open trading of the project token began only at the end of 2023 at a price of $0.28, since then it has grown, according to Coingecko, by only 25% (as of September 23) with a peak price of $1.1 in March 2024.
The list of projects with a capitalization of more than $100 million includes six more projects: UMA, Tellor Tributes, API3, Band Protocol, iExec, Oraichain. In general, since the beginning of the year, the capitalization of the cryptocurrency market has grown by 180%, from $828 billion to $2.33 trillion. Despite the fact that September is traditionally a weak month for digital assets, the total market value of cryptocurrencies continued to rise in early autumn: since the beginning of the month, it has grown by 7%. Thus, the flagship of the digital asset market, Bitcoin (BTC), fell over the past 30 days to $53.3 thousand, but recovered the drawdown and updated the maximum since August at slightly above $64 thousand.
There are now two important moments that will directly affect financial markets in the next few months – a further reduction in rates and the presidential elections in the United States. The first factor will depend on the state of the US labor market, where it is worth paying special attention to the report on the labor market – data is released every first Friday of the month (the next report is October 4).
The US presidential election will be held on November 5. Traditionally, the banking sector tries to provide the economy and markets with liquidity as much as possible before this event, which affects the depreciation of the dollar and the growth of a wide range of digital assets. After the elections, the state of the US economy and the actions of the Fed will again come to the fore. If we talk about the “altcoin season”, then there will probably not be such a season as we are used to seeing before. This can be justified, first of all, by the fact that in previous “alt seasons” there were not so many projects and coin unlocking systems. Today, the attention of industry players is focused on various point projects, and there is not enough liquidity for the entire market. Strong projects will “shoot” pointwise, the first wave of growth is expected by the beginning of November, the second – by March. But at the same time, it is still unclear how strict the regulation of the crypto market in the United States will be after the elections. Republican candidate Donald Trump has long and openly supported digital coins, and Democratic Party representative Harris also promised to support the industry, presenting her program to sponsors on September 22. However, if Kamala Harris wins and pursues a tough policy regarding cryptocurrencies, this forecast will have to be revised.
As for the “second-tier” tokens, attention should be paid to those that are slightly “behind the growth schedule.” These are coins that are not yet significantly overbought, but which are lagging behind the general “digital asset fleet.” The analyst classifies cryptocurrencies NEAR (NEAR), XRP (XRP) from Ripple and Polkadot (DOT) as such assets. Their prices have been lagging behind the general schedule since the beginning of the year and may still make up for lost time on the “fuel” of lower Western rates. The NEAR project stands out in particular against this background. It belongs to the field of AI and big data and is a regular in the top 10 rating of projects with the highest developer activity (according to the Santiment agency). If we talk about the future prospects of NEAR, now we see the range for coin purchases as $4.5-4.6, and the target marks are $6.3 and $8.2.
When choosing projects for investment, it is necessary to look not only at potential unlocks, which can reach 90% of the total issue, but also at the business model of the startup. If the token is not related to the project’s cash flow, you should not buy it.
Against the backdrop of such a rather modest growth of assets, one of the legitimate and stable forms of investment for obtaining a consistently high passive income is investing in the ASTL project (Hong Kong), which gives investors the opportunity to directly invest fiat and crypto assets in a stable passive income, which obviously exceeds inflation expectations and is not subject to any sanctions, blocking or confiscation. The ASTL project is a simple and elegant solution for potential investors – investing in the development of the real sector of a diversified cryptocurrency portfolio with a fairly high annual interest rate (up to 14%) with payments in stablecoin (USDT) and the possibility of a full return on investment through the subsequent sale of accumulated ASTL tokens on leading crypto exchanges. Details can be found at https://astl.world.
