DeFi Lending Platforms Gain Traction With Innovative Small-Cap Tokens

Decentralized finance (DeFi) lending platforms are experiencing significant growth, with several small-cap tokens under $1 million market cap emerging as noteworthy projects. These tokens power innovative protocols that enable users to lend crypto assets for interest or borrow against collateral. Below are five such projects, each with unique features and functionalities.

Trava Finance (TRAVA) is a cross-chain lending marketplace on Binance Smart Chain (BSC) that allows projects and individuals to launch their own lending pools. Launched in 2021, Trava Finance enables users to create and manage “User-owned pools” for lending and borrowing. The platform incorporates AI-powered analytics to mitigate risk, offering tools such as the BRicher token-price aggregator, Token Health indicators, and a Credit Score system to inform investment decisions. Trava Governance is fully decentralized, allowing TRAVA token holders to vote on upgrades. The team is also experimenting with NFT collateral, having launched “Trava Knight” NFTs and an auction platform as steps toward NFT-backed loans.

UniLend Finance (UFT) is a permissionless DeFi protocol that uniquely combines spot trading and lending/borrowing for any ERC-20 token. Unlike other platforms that limit which tokens can be used, UniLend allows any community member to list an ERC-20 token for lending, borrowing, and trading. Its upcoming UniLend V2, scheduled to launch in February 2024 on Ethereum, promises expanded features and performance. UniLend also integrates AI through its AI Agent Hub, where users can co-create on-chain AI agents using modular smart-contract components. The native UFT token is used for platform governance, with holders able to vote on proposals and earn rewards from liquidity mining and protocol fees.

ForTube (FOR), formerly known as The Force Protocol, is an open-source DeFi lending platform deployed on Binance Smart Chain in 2020. It offers a suite of crypto-finance service protocols aimed at developers, supporting crypto-backed lending and borrowing, yield farming, and the issuance of on-chain stablecoins. ForTube’s services include cross-chain asset transfers, crypto-asset-backed stablecoin insurance, token insurance, and on-chain payments. The platform’s smart contracts allow users to deposit, borrow, and repay assets at any time, with interest rates automatically adjusted by the protocol. Notably, the ForTube network has been audited by SlowMist for security.

Interlay (INTR) is a Bitcoin-centric cross-chain DeFi protocol designed to bring Bitcoin into the wider DeFi ecosystem. Its main feature is the interBTC bridge, a 1:1 BTC-pegged asset secured by a decentralized network of vaults. Interlay also provides a DeFi hub for BTC, enabling Bitcoin swaps, lending, and staking with low fees payable in any asset. The INTR token underpins the protocol, allowing holders to lock INTR to vote on governance, pay transaction or cross-chain fees, and use INTR as collateral for interBTC or other assets.

Kintsugi (KINT) is Interlay’s canary network deployed on Kusama. It runs the same codebase as Interlay but serves as an innovation hub, getting new features first. Kintsugi’s flagship product is kBTC, a 1:1 Bitcoin-backed asset on Kusama backed by multi-collateral insurance. The KINT token is primarily used for governance and paying network fees. Kintsugi aims to stress-test and refine Interlay’s designs, focusing strictly on innovation and always being ahead in terms of features.

Each of these projects has a unique niche in DeFi lending and borrowing, often involving cross-chain or Bitcoin-focused features. Their market caps are currently under $1 million, which implies both potential upside and higher risk. Before investing, it is crucial to conduct thorough research, checking current prices, liquidity, and developments. CoinMarketCap provides up-to-date statistics to help track these tokens.