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68 days ago

Beyond the Basics: DeFi Blue Chips

This article is NOT intended as financial advice, nor should it be taken as such

DeFi, or decentralized finance, is a relatively new concept, but has already attracted over billions of dollars in investments. While no project has achieved the same level of establishment as Nike or Apple (yet!), some “Blue Chips” have earned a level of trust from DeFi investors.

What are DeFi Blue Chips?

In the world of TradFi (traditional finance) and crypto, investors are always on the lookout for safe assets, or "blue chips," that provide solid fundamental value when financial markets become less promising.

With the growing popularity of cryptocurrency, the options are increasing, as is the pool of investors. While some investors may have no problem investing in any cryptocurrency, others are more cautious and want to invest in established cryptocurrencies that offer:

  • institutional status
  • Strong reputations
  • Higher liquidity
  • Lower volatility
  • Sizable market caps.

These are known as Blue Chips and two strong examples are Bitcoin (BTC) and Ethereum (ETH), both of which have earned blue chip status in the crypto world.

How do DeFi blue chips rely on Gelato?

DeFi blue chips rely on Gelato's battle-tested backend to execute thousands of transactions daily, ranging from a variety of automation tasks such as simple oracle updates, distribution of rewards, token buybacks, debt ceiling management, and much more.

MakerDAO, for example, uses Gelato to manage debt ceilings automatically and to readjust DAI collateralization across various vaults, relying on Gelato in parallel with their in-house systems to ensure that necessary oracle updates are performed and maintained reliably.

With Gelato Automate, Synthetix users can set up tasks that claim their accrued SNX staking rewards periodically at set intervals. Gelato handles the process reliably and autonomously in the background so users can relax and focus on other things.

Pancakeswap has also integrated Limit Orders natively with the help of Gelato. Limit orders are token swaps that execute at a pre-specified price, allowing for investment management like investing a fixed amount, catching price dips, or selling tokens gradually.

OlympusDAO's core protocol focuses on consistently growing the supply of OHM while maintaining constant value. To achieve this, Olympus relies on a rebasing mechanism that continuously adjusts the supply of OHM tokens based on fluctuating market conditions.

Overall, investing in DeFi blue chips can provide a more cautious investor with a level of security and reliability. However, as with any investment, it is important to do your own research and not rely solely on the opinions of others.

Reminder: this article is not intended as financial advice nor should it be taken as such.