Crypto trader Lark Davis is bullish on a slew of “blue-chip” altcoins built on Ethereum.
The analyst says he’s highlighting projects that will be around for the long haul, with well established track records and good cash flow.
“These so-called decentralized finance (DeFi) bluechips could also be some of the best holds during the bull run in terms of actually giving those higher gains while also being relatively safer plays compared to a lot of the smaller cap cryptocurrencies in the market which might give higher gains but are also higher risk.”
The analyst’s first pick is the lending and borrowing protocol Aave (AAVE), which he says already has close to $3 billion of total value locked in the platform and is likely to get a lot bigger.
“This is just the beginning for Aave, since the technology behind Aave is actually addressing a multi-trillion dollar market. However, Aave goes way beyond just simple lending and borrowing services, it is also the pioneer in technology like flash loans, it has recently introduced a credit delegation, they’ve got lots of other stuff in the pipeline coming. Aave is even working to crack into the mortgage market, with tokenized mortgages being able to be used as collateral for loans.”
The second asset Davis is bullish on is, Uniswap (UNI). Davis notes that the decentralized exchange has higher volume than Coinbase on some days and has been instrumental in allowing projects to launch their tokens without the gatekeeping involved in launching on centralized exchanges.
Next on Davis’ list is the derivatives liquidity protocol Synthetix (SNX), which is taking aim at the multi-trillion dollar derivatives market. Davis notes that a number of new projects are leveraging the Synthetix protocol, adding that with the project’s nearing upgrades, he expects it to remain the leader in its field for the foreseeable future.
The fourth altcoin Davis mentions is Andre Cronje’s decentralized finance platform yearn.finance (YFI), which is evolving into multi-purpose lending and insurance platform that allows token holders to receive a portion of fees garnered on the platform.
“The YFI governance token is famous for being ridiculously expensive, but the token holders receive a percentage of fees made to the platform… now it’s too early to say how lucrative holding the YFI tokens will be in the long run but the market is currently betting that they will be worth a lot and that the cash flow will be significant.”
Davis’ fifth pick is liquidity provider Kyber Network (KNC), which Davis says is “helping connect the dots in DeFi.” Davis notes Kyber holders receive a portion of fees made on the platform, though he warns that one must own a lot of KNC to make the feature worthwhile. However, Davis says the token has a diminishing supply, making for some great tokenomics.
Finally, Davis names Maker (MKR) as his sixth pick, labeling it the “OG of DeFi protocols.” Maker is the number one DeFi protocol in terms of total value locked, says Davis. With a lot of new features in the pipeline, Davis believes the asset could do well this cycle.