REntering into legal contracts, handling sales or spreading credit risks decentrally on the blockchain via smart contracts – these are just some of the applications that crypto currencies already enable. Demand for these possibilities in the business world is rising constantly, and with it the volume of transactions that the network has to handle. That is a critical point, because only if the necessary technical requirements have been met can the blockchain process more transactions within a defined period of time. Ethereum recently made a step towards the future by starting an upgrade to Ethereum 2.0. The new generation contains multiple improvements and is intended to deliver greater speed, efficiency and scalability. That the market for decentralized finance (DeFi) is popular is demonstrated by a look at the Total Value Locked (TVL) across the leading protocols. This is the USD value of the cryptocurrency cash that is currently locked in DeFi. Whereas the volume at the start of the year came to some USDbn 25, according to calculations by Defi Pulse, now it is already more than USDbn 100.
Not only is this growth being fanned by Ethereum, now the second largest cyber currency in the world, but the market is increasingly being dominated by the less well known DeFi protocols Chainlink or Aave as well. The success can best be measured by the change in market capitalisation. While for Chainlink this reached around USDm 50 on its launch four years ago, the digital coins are currently worth more than USDbn 11. The three credit protocols of Maker, Aave and Compound are likewise enjoying ever greater appeal, the value of the first of these cryptocurrencies having risen fivefold this year. Leonteq gives investors a very easy way of bringing this theme of the future into their portfolio with new and innovative products – and that's without having to put it all on a credit card. The "Decentralized Finance (DeFi) Crypto Basket" reflects the still young trend with a diversified selection of the equally weighted DeFi protocols 0x, Aave, Compound, Maker, Uniuswap and Yearn.Finance. Offered in USD, the tracker (ISIN CH1129854373) is configured for three years and comes with a management fee of 1.50% p.a. Although the product is not quoted on the SIX, it can be bought and sold over the counter at any time. The product has the same conditions and an identical term, but is listed on the BX Swiss and refers exclusively to the initially equally weighted cryptocurrencies Chainlink and Filecoin.
The new "Smart Contract Platforms Crypto Basket" is rather more broadly based, consisting of a total of seven digital coins: Ethereum, Solana, Cardano, Polkadot, Algorand, Tezos and Cosmos. The first four of these are actually among the 10 largest cyber currencies in the world. Solona's development has been remarkable indeed, the cryptocurrency exploding from a price of USD 1.50 at the start of the year to more than USD 200 now. That led to Solona shooting up to fifth position in the ranks of cryptos with the greatest capital base. There are technological as well as speculative reasons for the run on the coin: Solana is already built on a modern version of the Proof-of-Stake (PoS) protocol, enabling it to eliminate the weaknesses of the Proof-of-Work (PoW), which Ethereum is still using. This makes the transaction costs significantly lower while improving transaction speeds considerably. The powers behind Ethereum are not sitting idly by, however, and are looking to switch to the PoS protocol with the upgrade to version 2.0 that is now in progress.
With the new tracker certificates on the Smart Contract Platforms Crypto Basket, Leonteq is offering investors the opportunity to bring the "smart contracts" mega-trend into their portfolio and share in the growth prospects of the crypto sector. The product reflects the development of the broadly diversified index almost completely, the only deduction being an annual fee of 1.50%. The products, which have a term of three years, are offered in the CHF (ISN CH1129854258), USD (ISIN CH1129854274) and EUR (ISIN CH1129854266) currency tranches and can be traded daily on the BX Swiss.
We look forward to answering all of your questions about our products and how they are traded. Please don't hesitate to get in touch! Phone: 058 800 11 11, email info@leonteq.com or contact us here.