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Decentralized finance, or DeFi, has been one of the hottest sectors in cryptocurrency over the past couple of years. As distrust in traditional banking and financial systems grows, people are turning to blockchain-based applications that allow decentralized, peer-to-peer transactions without intermediaries. The possibilities with DeFi are enormous—from decentralized exchanges and lending platforms to stablecoins, predictions markets, insurance, and more.
While Bitcoin (BTC-USD) has dominated the recent bull run with its surge passed $50,000, I believe altcoins in the DeFi ecosystem have much more room for exponential growth in the coming years. As blockchain technology matures and more real-world assets are tokenized, DeFi protocols will play an integral role in this next stage of the crypto revolution.
Of course, investing in altcoins carries higher risk than Bitcoin, so it’s critical to do your own research before buying. However, the rewards can be life-changing if you get in early on the right crypto assets. Let’s take a look!
Alephium (ALPH-USD)
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As decentralized finance continues gaining steam, one area that hasn’t received as much attention yet is scalability and efficiency. Many existing chains like Ethereum (ETH-USD) face congestion issues, which cause high fees and prevent certain applications from running smoothly. This is where Alephium comes into play. Alephium (ALPH-USD) is a sharded L1 blockchain that provides scalability, security, and energy efficiency tailor-made for DeFi and dApps. It uses a unique stateful UTXO model that matches Ethereum’s account model programmability while enhancing security. However, what sets Alephium apart is its novel Proof-of-Less-Work (PoLW) consensus that dynamically calibrates the mining difficulty to reduce energy consumption compared to Bitcoin.
ALPH traded for just $0.20. Fast forward a few months, and it trades at $3.35. This meteoric rise is due to Alephium’s similarities to another crypto called Kaspa (KAS-USD), which I’ve covered since it was near $0.01 and now sits at $0.17 with a $4 billion market cap. Alephium is essentially riding the coattails of Kaspa’s success since they target the same issues around scalability and efficiency for DeFi. However, Alephium’s market cap is still only $237 million versus Kaspa’s $4 billion despite having comparable technology. This leads me to believe ALEPH could still deliver multibagger gains.
Numeraire (NMR-USD)
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Shifting gears to artificial intelligence, Numeraire (NMR-USD) is an Ethereum-based platform pioneering the use of machine learning and AI algorithms for generating crypto trading signals and data-driven insights. It essentially incentivizes data scientists and quants to build machine learning models through blockchain-powered competitions using the native NMR token as a staking mechanism. Any profits generated from model trading in live markets are shared with the participants to reward the best-performing algorithms.
Numeraire is merging two bleeding-edge technologies—AI and crypto—to engage a global workforce of data talent and democratize trading intelligence for better investment decisions. The results thus far seem promising as Numerai’s flagship hedge fund, powered by its network, reportedly manages hundreds of millions in AUM across various stock and crypto strategies.
After mostly rangebound price action the past couple of years, NMR has awoken in 2024, with its valuation crossing back at more than $200 million this past week. As AI hype amplifies again with broader crypto adoption, we could see Numeraire revisit its all-time high valuation of $525 million later this cycle. For a crypto asset with unrivaled first-mover status in blockchain model creation plus real traction powering a thriving hedge fund, this would equate to a substantial gain from here, which is reasonable as altcoins begin their next leg in 2024-2025.
Secret (SCRT-USD)
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Secret Network (SCRT-USD) specializes in data encryption for Web 3.0 applications like DeFi and NFTs. As crypto permeates mainstream finance, protecting sensitive user information will grow paramount. It enables full front-to-back data privacy by executing smart contracts and processing transactions in trusted execution environments shielded by proprietary hardware. No data inputs, outputs, or contract logic are ever revealed externally.
Essentially, Secret takes the core value prop of anonymity coins like Monero (XMR-USD) but expands it for usage across all decentralized app categories—not just payments. For example, Secret NFTs show only a locked image to the public that the purchaser can decrypt and view privately. Secret DeFi apps operate entirely with encrypted liquidity pools, balances, and transfers for unparalleled financial privacy.
Secret remains remarkably under the radar with sub-$130 million market capitalization—a fraction of anonymity pioneers like ZCash (ZEC-USD) and Monero commanding billion-dollar-plus valuations. I expect Secret to outperform most larger layer 1s as undervalued privacy infrastructure for Web 3.0.
On the date of publication, Omor Ibne Ehsan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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