The DeFi (decentralized finance) markets continue to evolve rapidly. This sector of the blockchain industry has seen considerable growth in terms of platforms and features. There are now more DeFi services than ever.
One of the biggest changes to the DeFi market was the introduction of safehaven tokens. These advanced digital assets have ushered in a new age of stability that has helped many traders avoid necessary losses. Here is some valuable insight into how safehaven tokens continue to change the DeFi sector.
What is a safehaven token?
Safehaven tokens combine the best aspects of stablecoins with advanced smart contracts. These contracts can be used to prevent centralization, improve asset protection, and much more. To understand safehaven tokens fully, you first need to grasp the concept of stablecoins and how they operate.
Stablecoins are blockchain assets that derive value from third-party resources. There are all types of stablecoins in use today. Most people are familiar with fiat currency pegged stablecoins. These projects, such as Tether USD started as a 1:1 peg but have evolved into a combination of assets backing the token.
Commodity Backed Coins
There are also stablecoins pegged to commodities like gold, silver, diamonds, and even oil. These stablecoins provide a little more stability than their fiat alternatives. The extra stability comes from the fact that assets like gold are not distributed by any country in particular. As such, a government can’t just print up more gold like fiat currency. Consequently, this style of stablecoin is immune to bad monetary policies.
The last type of stablecoin derives value from other cryptocurrencies. Algorithmic stablecoins will utilize a reserve of another cryptocurrency like Ethereum to maintain its value. These projects provide the bonus of full transparency. However, they have failed in the past, as network volatility can make it easy for these projects to lose their peg and trade for under the token’s asset value. When this situation occurs, a project will fail.
It’s Evolution
Safehaven tokens can be made from any of the stablecoins available in the market. However, there are very few projects that have made this leap for both technical reasons and a feeling by some developers that their projects are secure enough. Those developers that strive for more stability have embraced the safehaven token concept for many reasons. For one, it’s not difficult to integrate these protections into a network.
Why are Safehaven Tokens Needed?
There are some serious advantages that safehaven assets bring to the market. Traders continue to make the shift over to these assets as a way to avoid the current volatility and rising inflation rates. Here are some of the other reasons why a safehaven token might be the perfect addition to your portfolio.
More Stability
You can achieve a higher level of stability when you incorporate safehaven protocols into a security token. Today’s safehaven assets leverage a variety of assets combined with protections to create a new level of protection against market swings. By enabling traders to avoid volatility, these assets provide the perfect foundation for long-term wealth creation.
Leverage Blockchain Technology Better
Safehaven tokens utilize blockchain technology to the fullest. These protocols incorporate advanced DeFi features and services to improve ROIs. They also combine transparency and ease of monitoring to improve the user experience. Safehaven tokens can be sent like normal cryptocurrencies globally in a permissionless manner and for a fraction of the cost of fiat currencies.
Prevent Centralization
Another major plus that safehaven tokens bring to the market is that they can prevent centralization. Some networks have security measures in place that seek to curb whale manipulation. Whales are large traders. They hold enough of an asset to alter the value of the token via their trading actions.
They can also exert their influence on the community by usurping governance protocols. Most DeFi networks require users to stake their tokens using a weighted system. The more tokens you hold and the more weight your vote carries. In theory, this approach makes sense. However, whales can leverage this setup to take control of a project and steer it towards their needs.
Safehaven Tokens to Watch in 2022
The expansion of the safehaven token concept in the crypto market continues. These projects continue to garner attention from both developers and traders. The combination of a store of value and transferability characteristics make safehaven tokens a smart choice for traders of all skill levels.
There are several safehaven tokens in circulation today. Each has a unique infrastructure and business model. Here are some of the most popular stablecoin projects to watch in 2022 and the many reasons traders continue to flock to them.
META 1
No safehaven token list would be complete without META 1. META 1 was the first safehaven token to gain popularity in the market. It combines a host of unique features with an all-inclusive DeFi system to create a more profitable user experience. META 1 was built to provide the community with a more fair and powerful tool to create wealth.
The project began many years prior when the network’s founder, Robert P. Dunlap, began to research the shortcomings of other crypto projects and the centralized financial system in general. He realized that the system has been skewed against the average person. Today, the financial system serves the primary role to keep those in control in power.
META 1 flips this model upside down and returns control to those who deserve it, regular user. The developers went to great lengths to create a stable and secure asset to build wealth. The META 1 Coin is the culmination of years of intense research and development. Today, the network provides the perfect base to build wealth upon.
Its Starts with its Core Assets
The META 1 coin is a multi-asset-backed token. The token is decoupled from the crypto market’s volatility because it gets value from a basket of gold-related assets. The developers went with gold because they saw many of the issues that fiat pegged stablecoins suffer from in terms of long-term savings capabilities.
Their main concern was that politicians could influence your savings if the token was pegged to fiat currency. They also thought about fluctuations in the gold market. To prevent these fluctuations, additional related assets were used to create a buffer. This maneuver makes sense when you consider that gold is a resource that can be discovered in large deposits. Just this week a major gold deposit was found in Africa.
Say No to Whales
One of the coolest aspects of META 1 is the humans-only system. This protection requires all META 1 Coin hodlers to prove they are an individual trader. The system ensures they are not working on behalf of corporations, firms, or even governments. This step prevents these groups, which are the most likely to commit whale manipulation, from entering the market. The strategy provides long-term protection for users seeking a truly decentralized DeFi experience.
Token Limits
Another feature that is only found on META 1 is the individual token limits. The system has a $5 million token value lock. This system ensures that no individual trader controls enough tokens to influence the market. The value was set at $5 million based on the project’s total market cap. As the project continues to expand, the limit will increase to reflect the larger ecosystem.
Protect Asset Value
One of the biggest issues faced by stablecoin developers is finding out ways to ensure their tokens trade for no less than asset value. It can be heart-wrenching when a stablecoin suddenly losses its peg and starts trading for less than its intrinsic value. This issue has caused multiple stablecoins to fail in the past.
META 1 eliminates this problem through its asset value protection system. The protocol leverages a network of off-chain sensors that consistently monitor the token’s assist value and compare it against pending trades. Only trades above asset value get approved. This strategy is a lifesaver and could have prevented numerous projects from failing in the past.
Most recently, the UST/LUNA crash is a perfect example of how losing asset value can result in massive losses. When UST lost its dollar peg it began to sell for less than its asset value which caused those holding the tokens underlying asset LUNA to freak out. They dumped their bags with one trader market selling $2 billion in LUNA overnight. These actions caused traders to lose 94% of their holdings by the next day. META 1 prevents these risks.
Tried and Tested
Of course, it’s one thing to hype these tokens, but how have safehaven assets like META 1 faired so far in real-life scenarios? The statistics don’t lie. Safehaven tokens have done the best of any crypto asset class. The networks that suffered the biggest losses during the latest correction were NFTs and DeFi protocols. Stablecoins did well with some losing their peg for minutes and UST failing. Safehaven tokens gained value.
Safehaven tokens did the best in terms of market performance. META 1 gained 1.35% while most other cryptocurrencies lost over 40% since the start of the latest correction. This data has helped developers to prove their systems are efficient at preventing volatility on an entirely new level.
The METANOMICs Universe
META 1 plays a vital role in the larger METANOMICs DeFi platform. This system combines the stability and security of the network’s safehaven asset with the profitability of today’s most advanced DeFi services and features, The METANOMICs universe consists of a powerful exchange, the META VAULT, and a variety of other helpful options.
Onramper
It has never been easier to join the DeFi revolution. META 1 integrates a direct fiat to crypto portal. This feature saves you the time and money it takes to complete this task on a third-party CEX. In the past, users needed these platforms because DeFi networks had no direct conversion methods.
META 1 integrates the Onramper portal to streamline the entire onboarding process. The Onramper portal is secure and provides unmatched flexibility. Users can convert +50 different types of cryptocurrencies into META 1 Coins in seconds. The portal is easy to navigate and available in over 150 different countries and multiple languages.
When you combine this feature with the open nature of META 1, it’s easy to see how the developers wanted to create a way for anyone in the world to generate wealth securely. As part of this strategy META 1 based its operations outside the jurisdiction of centralized regulators. This strategy means that META 1 can operate globally and offer features that the competition can’t match.
The META Blockchain
The META blockchain is the core layer of the operation. This fourth-gen blockchain protocol provides direct peer-to-peer transactions in a distributed nature. The blockchain leverages an advanced DPoS (Delegated Proof-of-Stake) consensus mechanism to provide top-notch scalability to users. According to developer bench tests, the META blockchain can scale to meet the volume of national exchanges like the NASDAQ.
META Exchange
The META Exchange is another important feature in the system. This non-custodial DEX empowers users to trade their favorite tokens securely. The exchange is secure and provides lower fees than many competitors. Best of all, there are no delays and you can pay your trading fees using META 1 Coins.
META Visa
What good is your crypto if you have no way to spend it? This is the question that META 1 wanted to answer once and for all. In the past, it was very difficult to find crypto-friendly merchants. Most merchants are scared to accept cryptocurrencies due to volatility concerns or they are simply not interested in altering their PoS system.
META 1 provides a better alternative to the status quo. The network enables users to spend their crypto just like fiat currency. The META Visa pays vendors in fiat currency that it generates through converting your META 1 coins into cash when you swipe. The process is seamless and takes seconds to complete.
The Safehaven Token Revolution is in Full Effect
After reviewing the facts, it’s easy to see why safehaven assets like META 1 continue to gain popularity. Crypto users need a way to store value and generate wealth. META 1 provides the perfect solution to their problems. As such, you can expect to see more stablecoins make the switch to safehaven assets as their benefits begin to become more widely understood.