Dec 23, 2022
INNOVATIVE WAYS TO STORE AND REPRESENT ON-CHAIN VALUE
On-chain value refers to the value that is stored and represented on a blockchain, such as cryptocurrency assets. The concept of on-chain value is constantly evolving as innovators discover new ways to leverage and exploit this value. There are many innovative ways to store and represent on-chain value. These methods allow individuals and organizations to transfer and manage value securely and transparently, without the need for intermediaries.
Stablecoins are a popular option for storing and transferring value on-chain. These digital assets are pegged to a real-world asset, such as a currency or commodity, and aim to provide stability and minimize price volatility.
Tokenization is another way to represent real-world assets as digital tokens on a blockchain. This allows investors to buy and sell fractions of these assets on-chain, making it easier to access and trade them.
Another interesting way to store and represent on-chain value is through non-fungible tokens or NFTs. These unique digital assets cannot be exchanged for other assets on a one-to-one basis and can represent a wide range of assets, including art, collectibles, and even real estate.
CURRENT TRENDS
A financial system called decentralized finance, or DeFi, which is based on blockchain technology, enables users to access a variety of financial services — including lending, borrowing, and trading — without the aid of middlemen. DeFi systems employ smart contracts to streamline value transfers on-chain and automate financial transactions.
One of the key drivers of this evolution is the increasing popularity and adoption of DeFi, which allows for decentralized and autonomous financial transactions without the need for intermediaries. This has led to the creation of a wide range of decentralized financial products, such as stablecoins, yield farming platforms, and decentralized exchanges, which are all based on the concept of on-chain value.
As the building blocks of DeFi come on-chain, it continues to revolutionize traditional investment by providing new utilities that are derived from principles that have remained unchanged for decades. One area where DeFi has identified opportunities is liquidity positions, which can be structured as components of investment strategies. Synthetic assets, which are backed by on-chain collateral, are also gaining traction in the DeFi space.
FUTURE POSSIBILITIES
We are now witnessing increasingly inventive ways to store, express, and utilize on-chain value as the DeFi area continues to develop and evolve. This encompasses a wide range of activities, including the production of novel on-chain assets, the improvement of DeFi protocols and products, the incorporation of on-chain value into conventional financial institutions, and many more.
Innovative protocols such as Paribus are already redefining the norms in terms of asset ownership, making it easy for users to derive value on-chain from assets that were previously thought to be illiquid. For example, Paribus allows users to hold and trade liquidity positions in various cryptocurrency and blockchain assets. Users can potentially increase the value of their liquidity positions by staking LP tokens or using them as collateral for loans.
By increasing the liquidity of non-fungible tokens (NFTs) and providing users with more alternatives for utilizing them, Paribus also hopes to raise the economic value of these tokens. They accomplish this, for example, by enabling NFT owners to take out collateralized loans against their NFTs to finance more deals and investments. Users might possibly create passive revenue using this strategy and release liquidity from their NFTs without having to sell them.
In addition to NFTs, Paribus is also interested in promoting the use of virtual lands as a new asset class. They have developed a collection of smart contracts that enable collateralization with virtual lands, and are exploring ways to release liquidity through these assets via borrowing and lending.
Paribus focused on developing a product line for borrowing and lending synthetic assets, with the goal of better leveraging the underlying assets and supporting more complex use cases using both synthetics and liquidity position (LP) tokens.
Find out more about Paribus and keep you with all their recent news and developments via the following links:
