Can Lightning Strike Twice? The Founder of Hive Blockchain is Eyeing Another Big Win in the DeFi Space
2020 saw some of the highest growth in cryptocurrency values ever seen. Bitcoin started 2020 at less than $8,000 but by early 2021, the price had already hit over $40,000. Whether it was because of growing instability in the US, the growing acceptance of cryptocurrencies in the market, or both, the sector has definitely hit the mainstream of investors today. Publicly listed companies that were in the business of mining cryptocurrencies, like Marathon Patent Group Inc. (NASDAQ:MARA), Riot Blockchain Inc (NASDAQ:RIOT) and Hive Blockchain Technologies Ltd. (TSXV:HIVE) also saw massive growth in the market caps based on the strength of crypto prices.
Olivier Roussy Newton is one of the leading entrepreneurs in the cryptocurrency industry with a particular expertise in turning ideas into publicly listed companies. Described as a visionary young technology leader, the founder of crypto mining success story, HIVE Blockchain, helped drive HIVE’s stock price from $0.11 in the beginning of 2020 to over $3.37 in early January 2021.
Olivier’s newest project, DeFi Holdings Inc., is striving to do for the capital markets with DeFi what Hive did for crypto mining. Short for decentralized finance, DeFi is seen to be one of the hottest areas of the cryptocurrency sector in recent months. In early 2020, Defi had just under $1 billion in total value locked, or TVL. Today, the space has approximately $23 billion in TVL accrued in smart contracts.
What is DeFi?
DeFi is a radical new form of finance that uses innovations in blockchain to bypass central financial intermediaries such as brokerages, exchanges, or banks, by using smart contracts on blockchains, the most common being Ethereum. DeFi platforms allow users to lend or borrow funds from others, speculate on price movements on a range of assets using derivatives, trade cryptocurrencies, insure against risks, and earn interest in a savings-like account.
According to Wealthsimple, “DeFi took off because it provides new ways to put cryptocurrency to work. Instead of simply holding your ethereum in a wallet and praying that the price will go up, you could lend out your cryptocurrency on DeFi lending protocols or earn money from providing liquidity to decentralized exchanges—putting money in its coffers to facilitate exchanges.”
How will DeFi grow Revenue?
There are a number of methods for earning revenue from DeFi
- Lending cryptocurrency.
- Earning fees from decentralized exchanges.
- Earning governance tokens and play the “yield farming” game. This has been the most lucrative method, with governance tokens quickly reaching highs in value in the summer of 2020.
- Holding DeFi tokens for speculative purposes or simply hold exposure to blockchains that house DeFi protocols.
As one of the first Canadian listed companies that is actively working in DeFi, DeFi Holdings has stated in a recent presentation that their business includes three pillars: Trading, Equity and Asset Management. In summary, the company will trade DeFi assets, invest in promising early stage DeFi projects, and use its cryptocurrency assets and the assets of its partners to generate yield.
With the success of HIVE under his belt, Olivier hopes that lightning will strike twice for him and his investors. Keep an eye on their website, defiholdings.ca, to get the latest information about the company.
DeFi Holdings will be trading on the NEO on January 21, 2021 after merging with Routemaster Capital Inc. (TSXV:RM). See their latest press release here.
“Disclaimer: The company described in this article is a customer of NAI Interactive Ltd. This material is for informational purposes only and is not intended as a recommendation or offer or solicitation for the purchase or sale of any securities or financial instruments, or for transactions involving any financial instrument or trading strategy.”