Meaningful Product Development in the Crypto Landscape
The recent price action in the crypto market has left many open mouthed and in disbelief.
If you have not been living and breathing this space daily, for the past two years you may have only been aware of one narrative: Bitcoin bubbled to $20k, and then died when the hype flamed out. A crypto winter covered the entire space in a thick coat of white snow, inspiring a mass exodus as many self proclaimed “in it for the tech not the money” vanished in the night.
Looking back, 2017 will be remembered as the year everyone and everything raised money. Blockchain became a mystical word that if you whispered three times in front of a mirror, a magical pot of digital gold appeared in front of you.
Since late 2017, many crypto projects faded away as fast as they ICO’d. Many of my colleagues who became “blockchain professionals” moved on to greener pastures. Those of us who remained huddled together to keep warm as the crypto-winter grew longer and colder, without an end in sight.
Slowly but surely, small patches of snow began to melt. The Open Finance movement, built on the Ethereum blockchain, started to look a lot like the existing financial system we are all familiar with. Highly scalable payment channels, low cost fees, lending, leveraging, interest generating savings accounts, seemed to appear out of nowhere as passionate developers continued to compound open sourced code at an accelerating pace.
If 2017 was the year of fundraising, 2019 has become the year of launching.
The past five months have seen project after project shake off the frost of testnets, and bring to market remarkably usable real world applications.
The following is a list of some of the projects we are excited about that keep our fund confident in the growing potential and innovation within the crypto ecosystem. There were so many that we follow it was not practical to include them all.
Some of the projects on this list are fully functional and used by thousands of people, some are more like proof of concepts. All of them are interesting and help paint a picture of what the future of consumer applications look like powered by blockchain technology.
What we hope you gain by clicking the links included in this article is an appreciation for just how much building is happening in this market.
If you want to see more about our views on where the crypto market is today, read our post about how we got here, or why we feel the market has bottomed. If you want to read more about where we might be going, read our post on crypto end games.
Note and Disclosure: Lionschain has invested in a number of these projects. While we continue to monitor and review the evolving blockchain space, we internally update our views on the market, and the projects being built. This document is not investment advice or endorsement on any particular crypto asset. Do your own research!
Lending Platforms
The ability to take a loan with interest, or lend money and receive interest, is a pillar of any financial system. Blockchain technology enables programmatic, cost effective loans that can be accessed by anyone from any location, 24 hours a day, 365 days a year. By leveraging open source smart contracts, running on the Ethereum public blockchain, almost all overhead costs are removed and trust between lenders and borrowers is mitigated through transparency.
Launched late 2017
MakerDAO, launched in December of 2017, is by far the most successful open finance project to date. MakerDAO enables customers to take loans via collateralized debt positions, producing the decentralized stable coin DAI. DAI can be used as a means of exchange by any third party developer building a decentralized application.
Currently collateralized via ETH, the future version of DAI will be collateralized by a basket of digital assets, enabling a larger market cap (there has been around $80M of DAI issued to date), and greater stability.
MakerDAO currently holds over 2% of the total supply of ETH, or $460M USD.
Launched in late 2018
Compound is an Ethereum based application enabling anyone to lend or borrow an assortment of crypto assets. The interest rates update in real time based on market demand and payments happen by the minute. Compound is easy to use and holds roughly $25M USD in collateralized loans. Version 2 was just released.
Launched early 2019
Dharma is a peer to peer lending program built via smart contracts on Ethereum. Dharma offers fixed duration loans at varying interest rates based on market demands.
Dharma is built as an open sourced protocol enabling third party developers to incorporate its functionality into their own decentralized applications.
There is currently over $22M in locked funds on Dharma
Insurance
Insurance is a financial tool which enables risk to be managed in a responsible manner for businesses and individuals.
Launched late 2018
Etherisc is a decentralized insurance platform built on Ethereum. Developers can create custom insurance products that are accessible to anyone in the world. A number of interesting insurance packages have been created with the Etherisc platform, such as flight delay insurance, hurricane protection, and crypto theft.
Launched mid 2019
Nexus Mutual is an Ethereum based insurance program protecting users from smart contract failure. As more real world value is held within smart contracts, the need for risk management grows.
To date, hundreds of millions of dollars of crypto currency has been lost or stolen due to bugs in smart contracts. Nexus aims to reduce platform risk by providing P2P insurance solutions.
Payment Processing
While base layer blockchains offer security regarding storing value and large sum value transfer, they often lack the throughput to compete with traditional payment processors like Visa and Paypal.
A number of payment processing services have launched as layer 2 protocols, inheriting security from the base layer assets they settle onto, while providing low cost instant payments.
Launched early 2018
The lightning network enables instant low cost transfer of Bitcoin. Using a mesh network of node participants, this layer 2 solution helps Bitcoin overcome its two main drawbacks — slow confirmation times and high transfer fees.
The Lightning network currently has over 8,000 nodes globally and over 1,000 BTC ($8M) locked in its service.
Launched late 2018
Wyre is a bridge between the legacy financial system and the crypto finance world.
Wyre produces a set of tools for developers to enable accepting traditional payment methods for decentralized cryptocurrency powered applications.
Wyre fills an essential gap, enabling the onboarding and offboarding between crypto and fiat markets in a programmable and interoperable way.
Decentralized Exchanges
Exchanges have always been the heart of cryptocurrency. Most of us bought our first crypto on an exchange. Exchanges bring exposure, on ramps off ramps and familiar user experience to a general audience.
The meme “not your keys, not your coins” has shown to be true time and time again as centralized exchange hacking has been a consistent area of risk throughout the history of crypto.
While the majority of exchange volume is still on centralized exchanges, we believe strongly that the future of token swapping will occur in a fully or partially decentralized environment.
Launched late 2018
Uniswap is the largest decentralized exchange for spot purchases of Ethereum based tokens. Uniswap enables any market participant to create trading pairs and receive a small percentage of fees collected by the service.
There is currently roughly $14M locked in Uniswap.
Launched mid 2018
0x is an advanced decentralized exchange protocol enabling third party developers to build and manage independent order books. Built on Ethereum, 0x enables different custom exchanges to share liquidity.
0x manages scalability and fee issues by keeping the order book off chain and only issuing transactions on chain.
The 0x protocol manages roughly $1M of daily trades across the platforms it supports.
Launched early 2018
Kyber is an Ethereum based on-chain decentralized exchange. Kyber integrates with a number of crypto wallets via an open API, enabling customers to buy or sell cryptocurrency directly from their wallet. The popular mobile phone manufacturer, HTC recently partnered with Kyber to provide exchange features directly from their smartphone wallet.
Kyber currently manages roughly $800K worth of daily trades on its network.
Launched late 2017
Idex is one of the first Ethereum based decentralized exchanges to launch publicly.
Idex is a hybrid centralized and decentralized exchange, using smart contracts to hold customers funds, eliminating a central point of attack.
Idex currently manages $1–2M worth of daily trades.
Derivatives
Derivatives are a valuable financial tool enabled by the Ethereum blockchain. With derivatives, short and leverage positions can be created, giving more flexibility for traders to profit on market movement.
dYdX
Launched early 2019
dYdX is a derivatives platform built on Ethereum. With dYdX you can create short or leveraged positions without the use of a centralized entity or custodial service.
dYdX managed roughly $1M USD worth of assets in the first two weeks after launch.
Tokenization Services
The world’s total assets account for a significantly larger amount of value than simply currency or commodities like gold and silver. Ethereum enables the creation of unique digital assets which can be direct legal representations of real world assets. This opens up new use cases like borderless ownership of real estate, stocks, bonds etc.
Launched late 2018
Harbor is a security tokenization business which enables customers to convert non digital equity to tokenized assets. Common use cases for this exist such as tokenizing real estate or private securities.
Blockchain powered public markets enable borderless access to real world assets and increased liquidity, with lower settlement costs and greater transparency.
Launched spring 2019
RealT enables customers to buy fractional portions of revenue generating real estate, such as apartment rentals. Owners receive monthly income based on the percentage ownership of the real estate.
UMA is a decentralized financial contracts platform built to enable Universal Market Access. Use UMA’s self-enforcing contract design patterns and provably honest oracle mechanism to create your own financial products using standards like ERC20.
Prediction Markets
Prediction markets can be used for everything from market research to betting on election outcomes. Open markets that gather the wisdom of the crowds have been shown to repeatedly make better predictions than professionals.
Launched mid 2018
Augur is a predictions market protocol. Augur enables third party developers to build various prediction markets which can be used for crowd sourcing knowledge or speculating.
Augur has over 2,400 open markets, and has roughly $3M USD of ETH locked on its platform.
Augur v2, is scheduled for release in the summer of 2019. This upgrade will include an improved user interface, and the ability to open markets settled by the stablecoin DAI.
Launched early 2019
Guesser is a predictions market interface built on Augur, focused making the user experience better. Its goal is to onboard the non-technical public into the world of prediction markets.
Launched early 2018
Gnosis is a collection of utilities to create prediction based digital assets. Services include a custom wallet, conditional tokens and tradable event outcomes. They are in the process of launching a regulated prediction market platform.
Gambling
Gambling is one of the most popular use cases for blockchain gaming. Because of ambiguous regulations, anonymous registration, borderless jurisdiction, and provable odds, online gamblers have flocked to blockchain gambling solutions.
Launched late 2018
FCK is an Ethereum based gambling site with games like dice, roulette and poker.
Daily gambling volume is roughly $800,000 USD.
Launched mid 2018
Dice2.win provides transparent open sourced odds for dice games powered by the Ethereum blockchain.
Roughly $125,000 of ETH is locked on the platform with a daily volume of over $300,000 USD.
Launched late 2018
Poker EOS is a set of card games powered by the EOS blockchain, focused on the Chinese market.
Poker EOS holds roughly $100,000 in user funds, and has a daily volume of $2M USD.
Launched late 2018
Tronbet contains a complete set of casino games built on the Tron blockchain.
Tronbet has roughly $70,000 in user funds stored and a daily volume of $800,000 USD.
Gaming
We see gaming in general as a key component to mass adoption for crypto. Public blockchains provide a level of transparency and interoperability for gaming that has little precedence in the existing world of video games. Imagine being able to earn a sword and shield in one game, and rent it out to gamers to use in other games. There already exist marketplaces for in-game items, where unique items can sell for large sums. The invention of scarce, ownable, digital assets, which can be used across platforms, will open up many new gaming experiences and business models, growing the market significantly.
Launched mid 2018
God’s Unchained is a collectable card game similar to Magic the Gathering. Players can battle decks of cards and trade provably scarce cards for ETH on this Ethereum based game. Tournaments offer real money prizes for players to compete using custom built decks of cards.
A total of $2M USD is currently stored in the game’s smart contract.
Launched early 2019
Evolution Land is a cross-blockchain game supporting Ethereum and Tron. Players work in a virtual environment to build, improve, and interact through a virtual economy.
Roughly $70,000 USD is of user funds are held by the game.
Other Games
Other exciting games that have either just launched or are on the horizon will be included in a future post.
Marketplaces
Marketplaces are another natural use case for blockchain specific applications. Ownable digital assets can be traded, bought and sold through a number of different marketplaces.
Launched early 2019
“Gitcoin is an open source bounties platform on the Ethereum blockchain. We facilitate a space that allows open source developers to get paid for their work contributing to open source projects and in return, the open source projects get exposure to a vast community of hard working developers they might not have had otherwise.”
Gitcoin has funded over $200,000 in developer bounties since launch.
Launched late 2018
OpenSea is a peer-to-peer marketplace for rare digital items and crypto collectibles built on Ethereum.
An estimated $1M USD of purchase volume has occurred since launch on Open Sea.
Launched early 2017
District0x was one of the first marketplace protocols to launch on the Ethereum blockchain.
District0x is a protocol which enables third party developers to easily create custom marketplaces.
Launched late 2018
“The world’s largest blockchain auction house for crypto collectibles.”
Users can buy, sell, or trade unique crypto assets which are hosted on Ethereum.
Launched late 2018
Bounty0x is a cryptocurrency bounty hunting platform. Earn cryptocurrency and tokens by completing simple marketing, software development, and creative tasks.
Bounty0x has received over 900,000 submissions and has rewarded users with over $5.2M USD in bounties.
Social networks
Social networks offer huge potential for crypto to go mainstream. The current model of social networks position the consumer as the product being sold to advertisement companies. A user’s personal data, and the content they post, are owned and monetized by the social network. Recent security breaches at major tech companies like Facebook have spotlighted the need for users to take back the ownership of their data, and crypto networks offer the possibility of doing just that. Micropayments enable the possibility for new business models and selective sharing of personal data.
Launched early 2016
Steem is a social blockchain platform enabling entrepreneurs to create and grow communities. It allows for immediate revenue streams to flow to users by rewarding them for sharing content.
Steem has paid roughly $60M USD to content creators.
Launched mid 2018
Cent is a blogging platform with cryptocurrency powered micropayments.
Content providers can set the terms of their compensation. Users can create bounties on articles they would like to see published and content creators can earn money creating these articles.
Monetization recently went live, and Cent has received over 125K posts and replies since beta launch, exchanging roughly $40,000 USD in crypto micropayments.
Launched mid 2018
“The platform, which launched six months ago, has an active community of over 500,000 monthly active users who have paid a combined $2.6 million in cryptocurrency to creators in the form of upvotes, gifts, and donations. Blockchain is a secure and transparent ledger for decentralized networks.”
Launched late 2018
Trybe is a social knowledge sharing platform built on the EOS blockchain. Trybe incentivizes users to post valuable content by rewarding them in native Trybe tokens based on how much value a users content brings to the network.
Launched late 2018
Sociall is a social network built on the Ethereum blockchain. Sociall is a secure and private decentralized social network with an integrated ad platform and marketplace.
The network is still in development with a native mobile app coming to market in Q3 2019.
Launching Q3 2019
Everipedia is an EOS based blockchain encyclopedia similar to Wikipedia. Everipedia was created by some of the early members of the Wikipedia team. Users stake native tokens to gain edit access to articles and are rewarded for adding new content.
Launched late 2018
Publish0x is a blogging platform built on the Ethereum blockchain. Publish0x enables users to earn micropayments in crypto via reading, commenting, and creating posts.
Identity Management
In order for the vision of data ownership, monetization, and reputation to be returned to the users, there must be a tie between your real world identity and your crypto bank account. A key component of the financial system is the credit score, which can only be enabled by effective identity management solutions. This poses a challenge and there are a number of teams working on solving it.
Launched mid 2018
SelfKey is an identity management tool built on the Ethereum blockchain.
“SelfKey is a self-sovereign identity system that is based on the blockchain and can provide control and management of digital identities to users. Additionally, users can utilize SelfKey to securely manage a crypto portfolio and instantly onboard immigration, cryptocurrency, and financial services.”
“The SelfKey Marketplace lets users access and compare a range of services related to financials, cryptocurrencies, and immigration. Just some of the services available in the Marketplace include setting up a business, opening a bank account, getting an additional passport, and trading with cryptocurrencies.”
Launched early 2018
Civic is an identity platform built on Ethereum enabling secure KYC verification.
“Civic is a decentralized identity ecosystem, allowing the requester to verify the identity of the user in a safe and cost-effective way, which became possible thanks to blockchain technology. Using the digital identification platform, the user can create his / her own virtual identity and store it together with personal information on their device.
Civic is building an ecosystem designed to facilitate on-demand, safe and affordable access to identity verification services through the blockchain.”
Launched mid 2018
Bloom is a credit score rating system built on Ethereum.
Bloom aims to bridge the gap between traditional services that require credit ratings and the crypto economy.
Over 500,000 users have created Bloom accounts and are building a credit reputation via their Ethereum accounts.
Launched mid 2017
Sovrin is a self sovereign identity platform built on Hyperledger.
Sovrin aims to replace your state issued driver’s license with formal identification and produce a secure credit score which can safely be shared with businesses such as car dealers, mortgage brokers etc.
“The raw data is not handed over to the loan company. Instead, they get a “proof” of the information they want to know. In this case, it might be proof that you’ve not missed a mortgage payment by more than seven days in the last five years. The loan company gets a yes / no answer to that question. They don’t know how much your mortgage is (unless you permitted that), or what the payments were.”
Governance
DAOs (Decentralized Autonomous Organizations) have been forgotten and forsaken since the Ethereum DAO Hack incident in 2016. But this new form of human organization is still viewed as an important component of the crypto movement by many enthusiasts in the community (ourselves included). DAOs represent a new way for communities to collaborate toward shared goals. Cryptocurrency and smart contracts will enable the transparent distribution of organization funds. Governance models for managing these funds are an important area of research and experimentation which are being tackled by a number of projects in the space.
Launched late 2018
Aragon is built on the Ethereum blockchain. Aragon enables decentralized autonomous organizations to manage internal funds via democratic voting and reputation management.
Over 200 organizations have been launched using Aragon.
Aragon provides infrastructure for creating community hierarchies, internal court and dispute resolution systems and cash management checks and balances.
Launched mid 2018
Daostack is a set of tools, APIs and resources to create decentralized autonomous organizations and manage development, upgrades, fund allocation and decision making.
Daostack launched the alpha version of their flagship product Alchemy. Alchemy is a budgeting and resource allocation user interface to enable any group to quickly integrate.
Daostack is built on the Ethereum blockchain.
“Some example use cases for Alchemy include decentralized venture funds, charitable funds, innovation funds, a budget proposal system or prioritizing features for an open-source project.”
Launched late 2018
Tezos is an independent smart contract blockchain that uses on chain governance through a decentralized autonomous organization. Tezos was designed to be easily upgradeable, and financially self sustaining in its development through democratically awarded rewards to contributors.
There are currently about 45 blockchain projects that have launched on Tezos.
Data Processing, Cloud Storage and Infrastructure
Decentralized alternatives to the existing stack of internet cloud services are being built with the promise of a truly open source and ownerless internet, with censorship resistance, free market economic pricing, and global access. Critical internet stack elements, such as storage, location, bandwidth, content delivery, and processing power, are being developed to compete with the siloed closed source incumbents. While many of these services will not initially compete on cost, with improved efficiencies and marketplace economics, we believe they will ultimately create better products.
Launched mid 2015
Siacoin is an independent blockchain enabling fully decentralized cloud file storage.
Users can earn Siacoin by renting out spare storage space.
Currently the Sia network includes 257 providers hosting 1.6 petabytes of storage space, with 261 terabytes of data currently in use.
All data storage is redundant on multiple countries and continents, and privacy of data content is maintained through encryption.
Monthly storage of a terabyte of data with 3x redundancy currently costs around $0.30, vs AWS, the world leader in cloud storage which prices a terabyte at roughly $23.
Scheduled to launch late 2019
Filecoin enables users and developers to store files on cloud servers using the IPFS network. IPFS participants can earn money through renting out cloud storage.
IPFS launched early 2017 and has been used by a number of blockchain based projects, with some recent adoption by major cloud providers such as Cloudflare.
Launched late 2018
Golem Network is a P2P marketplace where participants can earn money by renting out unused CPU/GPU computation, or pay to rent from others.
The Golem network currently hosts 1490 CPU cores
Main-net launching in late 2019
Decentraland is a virtual reality platform built on Ethereum. Developers can purchase land in Decentraland and build out VR experiences, such as games, social networks etc. A marketplace enables builders to sell the products built in Decentraland to other developers or consumers.
Game developers can use Decentraland to create any VR experience they can image.
Launched late 2018
FOAM is a decentralized GPS alternative built on the Ethereum blockchain. Using technology similar to cell towers, FOAM’s marketplace allows anyone to set up a location broadcasting station and earn money from customers requesting location data.
With FOAM, cartographers can earn money by contributing to the open source mapping services which reference the data collected by FOAM network operators.
Developers can integrate with FOAM, enabling the integration of secured, verifiable location data without the need for a centralized third party.
Launched in late 2018
“Livepeer is creating a scalable Platform as a Service for developers who want to add live or on-demand video to their project. We aim to increase reliability of video workflows while reducing the costs to scale them. To achieve this we are building p2p infrastructure that interacts through a marketplace secured by the Ethereum blockchain.”
Launched early 2019
Loom is a scalability focused blockchain which connects to Ethereum, EOS, Cosmos and Tron blockchains.
Developers can build on Loom, and allow their users to use their crypto assets from other compatible blockchains.
Loom provides greater scalability, at a lower cost than what is found on layer-1 chains like Ethereum and Tron.
Launched early 2019
Enjin is a platform, marketplace and mobile wallet for buying, selling, and trading in-game assets, powered by Ethereum. Developers purchase Enjin tokens and turn them into in-game assets such as swords and shields. Players can earn items through in-game accomplishments or direct purchase.
Enjin recently announced a partnership with Samsung.
@enjin
Launching mid 2019
Chainlink is an Ethereum powered P2P marketplace for the creation of APIs used to connect real world data feeds to applications built on blockchain technologies.
Chainlink enables anyone to create a decentralized oracle service, which can collect information such as sports scores, temperature by location, traffic reports, or anything measurable. These feeds become verified by multiple parties, reducing reliance on a single party.
The value of open source and combinations for new use cases
Examples of services built by combining open source code in the blockchain space give a sense for how revolutionary and disruptive cryptocurrency already has become. Services that would have needed years and millions of dollars of funding to create, are being produced in months by small teams with modest budgets.
Here are some early examples of applications that were made possible by combining existing open source projects.
Launched late 2018
Set is a platform to create baskets of crypto assets that can be traded similar to an index fund. Set is built on Ethereum and enables third party developers to programmatically manage baskets of assets. Baskets can be shifted and rebalanced based on rules or market conditions.
Launched late 2018
Instadapp is an open bank which is built on Ethereum using MakerDAO and Uniswap.
Take loans, earn interest, manage your portfolio. InstaDapp is currently free to use and available globally.
Launched early 2019
xDai is a scalable payment channel built on the POA blockchain network. xDai combines technology from Ethereum, MakerDAO and POA to create a virtual US dollar that can be spent instantly from your phone without the need to install any apps. xDai has been used at a number of conferences and events to track participant consumption and reward vendors.
Launching late 2019
Battle Racers, is an Ethereum based arcade racing game. Battle Racers combines Kyber for decentralized exchange, Ethereum for content ownership, Loom for high speed scalable transactions, and Decentraland for a 3D virtual environment. Battle Racers is a great demonstration for what can be built in the gaming space using interoperable blockchain technology.
Launched mid 2019
DexAG is a price comparison platform for decentralized exchanges. Input the tokens you want to swap and the amount, and get real time price comparisons for 10 different Ethereum based DEXs.
Launched late 2018
Balance is a unified dashboard for open finance built on Ethereum. A user can track the status of the loans they created through MakerDAO, and interest they have earned through Compound Finance, or Dharma Loans.
Settle is a web-native operating system for open finance.
“Settle is designed from a blank slate to let traders use the capabilities of the new financial paradigm. Chat with Web3 integrations for DeFi protocols. Forever free portfolio tracking. App Store open to third party developers. 50/50 subscription share with Chat Hub Owners and app developers that add value for Settle users.”
Launched late 2018
Veil is a prediction market built on the Augur protocol. Veil offers an improved user interface and user experience hoping to attract a more general audience. Veil is an example of the advantages of building open source platforms where the underlying technology can be decoupled from the user experience.
In Summary
At Lionschain, we firmly believe that the future of software will not be found in closed source environments secured by intellectual property law, but rather in open source environments secured by sound token economic principles built on public blockchains.
A natively digital financial system is laying the groundwork for new experiences and business models on the internet.
We are excited to follow this space and play an active role in the creation of a truly open economy.
In a follow up post we will be discussing how the next generation of organizations and business models will be enabled by cryptocurrencies and public blockchains and how those businesses will disrupt the current market leaders.
Jonathan Caras
CTO Lionschain Capital
