Cryptocurrencies were created with the express purpose of providing people with an alternative to traditional banks. The Bitcoin (BTC-USD) white paper came out after the 2008 financial crisis, and talks of the need to disrupt traditional finance with a digital system that can facilitate borrowing and lending ,but also offer benefits such as anonymity, security, and decentralization. From this idea sprung a blockchain-based alternative to traditional finance, now known as decentralized finance (DeFi).
While still being refined, the development of DeFi has continued unabated, despite turmoil in the broader cryptocurrency sector. And some cryptos have emerged as leaders in the DeFi space. Cryptocurrencies that lead the way forward in decentralized finance are expected to have bright futures.
With that said, here are three cryptocurrencies that could disrupt the financial industry.
A growing number of lending platforms, such as Aave (AAVE-USD), Maker (MKR-USD), and Curve (CRV-USD), are cropping up, each providing a blockchain-based alternative to traditional banking known as decentralized finance (DeFi). These DeFi platforms operate on the Ethereum (ETH-USD) blockchain network. Today, Ethereum is regarded as the most advanced, stable, and reliable cryptocurrency for DeFi. With Ethereum, users can hold a balance of funds like in a traditional bank account, make payments, and set interest rates and loan terms.
Ethereum’s usefulness in DeFi and disrupting the traditional financial industry has been boosted recently after the completion of the Shanghai hard fork, also known as the Shapella upgrade. The enhancement allows users to easily access ETH, potentially unlocking more than $30 billion of liquidity. The Shanghai hard fork has further boosted Ethereum’s price, which is up nearly 75% in 2023. Ethereum remains the blockchain of choice for investors intrigued by the growth in DeFi.
Solana (SOL-USD) is another cryptocurrency whose blockchain can be used to facilitate decentralized finance (DeFi) transactions. Accordingly, Solana shares many similarities with Ethereum.
The one area where Solana has an advantage over ETH is when it comes to speed. Solana can validate financial transactions on its network at lightning speed. Currently, Solana can process 50,000 transactions per second, which is extremely fast compared to Ethereum’s 13 transactions per second.
The speed at which Solana can process thousands of financial transactions gives it an edge over Ethereum and traditional banks and credit card companies such as Visa (NYSE:V) and Mastercard (NYSE:MA). Developers behind Solana have launched Solana Pay, which provides a direct transaction connection between merchants and consumers. Solana Pay can be used without an intermediary such as a bank or credit union and charges no fees. This platform attracted more than 600 merchants within two months of its launch. Accordingly, it should be no surprise to investors that on a year-to-date basis, Solana’s price has increased approximately 125%.
RenQ Finance (RENQ-USD)
A newer cryptocurrency on the block when it comes to DeFi is RenQ Finance (RENQ-USD). This crypto is built on a cutting-edge decentralized exchange that makes DeFi transactions simple and intuitive for users via its RenQ wallet app.
Like most DeFi platforms, RENQ removes the need for intermediaries such as banks. However, it is also remarkably user-friendly, with an easy-to-use interface and efficient liquidity. Its simplicity is attracting a growing number of converts to RenQ Finance.
RENQ is a newer cryptocurrenc,y and currently trades for only a few cents. It can also be volatile in its trading patterns. That said, RenQ Finance has gained more than 50% so far this year. Looking ahead, this is a crypto to watch, primarily when disrupting the traditional financial industry. Some analysts say that they expect RENQ to eventually challenge the likes of Ethereum and Solana in the decentralized finance space.
Small, low-volume cryptos
On Low-Capitalization and Low-Volume Cryptocurrencies: InvestorPlace does not regularly publish commentary about cryptocurrencies that have a market capitalization less than $100 million or trade with volume less than $100,000 each day. That’s because these “penny cryptos” are frequently the playground for scam artists and market manipulators. When we do publish commentary on a low-volume crypto that may be affected by our commentary, we ask that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: How to Avoid Popular Cryptocurrency Scams
On the date of publication, Joel Baglole held a long position in V. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.