The blockchain industry is currently experiencing a frenzy due to the increased popularity of DeFi (decentralized finance) projects. As opposed to the 2017 hype cycle, DeFi projects are raising significantly less money, have smaller market caps, and usually have a product that is almost completed, if not live. Arguably most important, the projects that are built on Ethereum can list for free on popular decentralized exchanges, like Uniswap, which has seen volume increase to over $1.75 billion in the month of August.
Startups are taking note and quickly building solutions to help sustain this growth within the DeFi industry. Many of these solutions are built to help facilitate DeFi services that are based on community-led activities like lending, borrowing, yield farming, and more.
One company, RAMP DEFI, a leading decentralized finance project, has sprung into the blockchain limelight after going public about its 15x oversubscribed private sale round, which precedes its upcoming public sale. The Singapore-based company is building a solution that allows users to unlock their liquid capital in other blockchains through stake farming, allowing users to receive staking rewards, retain ownership of staked assets and access liquid capital at the same time. RAMP has the potential to unlock over $22 billion in assets.
Like with many oversubscribed projects, RAMP raised within an elite group of investors including Alameda Research, Parafi Captial, Arrington XRP Capital, IOST, Torchlight Ventures, Signum Capital, Blockwater, Ruby Capital, MW Partners, LayerX Capital and MoonRock Capital. The round happened in just a week, with an investor interest book that was significantly oversubscribed.
Once news started to leak on the high caliber of private sale investors, pools, media outlets, and other parties jumped at the opportunity to research the project. Since announcing their private sale rase, RAMP has announced a strategic partnership with Elrong and IOST and also pioneered the concept of TVU (Total Value Unlocked) that measures the amount of liquidity RAMP could unlock for the global DeFi ecosystem.
Key Differences Between DeFi and 2017 ICOs
From an investor’s perspective, risk mitigation in the modern DeFi fundraising landscape is much easier than in 2017. For one, many of the same investors lived through the 2017 ICO boom and understand the risk of investing in new projects. Secondly, projects now are much more transparent and are looking to raise less money – typically enough to make key hires and scale.
The beauty of DeFi is that the products typically offer a direct consumer benefit, such as staking to earn interest or other DeFi services with immediate value-added. Also, one of the major risks of the 2017 movement was the time it took for projects to list due to exchange negotiations and fluctuating market activity. Now, the exchange of choice for most projects tends to be Uniswap, which is completely decentralized, transparent about volume, and offers rewards for people that contribute to a token’s liquidity pool.
Like with anything, there are risks with DeFi around fake listings on Uniswap that try to mimic a token to collect user funds. The best way to avoid this is to get a token contract directly from a project’s official telegram and cross-verify this with Etherscan.
In RAMP DEFI’s case, their public sale will follow in the next two weeks and all information will be given on their official Telegram.