Ryan Watkins, a Messari Researcher, shines the spotlight on four small-
cap crypto assets in the Ethereum ecosystem.
In a sequence of tweets, Watkins says that coins could be part of a new
decentralized finance (DeFi) pattern that flares up along with the second-
largest blockchain.
“As Ethereum faces challenges scaling and interest in DeFi goes parabolic,
there hasn’t been a better time for a parallel DeFi ecosystem to break out.”
Watkins states Terra (LUNA) produces the maximum transaction fees
after Bitcoin and Ethereum. The Messari researcher emphasizes the point
that Terra is on the way to print $3.8 billion in annualized transaction
capacity, permitting the coin to pocket $26 million in transaction fees.
Watkins says from an essential standpoint, and Luna is a likely big winner.
“If LUNA were to be valued like its peers by year-end, it would imply as
much as a $3.53 price – 10x > current.”
Watkins is also looking at reorganized lending platform Kava (KAVA).
According to him, Kava employs a remarkable monetary program as the
platform burns Kava when interest on loans is settled, which contests the
inflation that comes with rewarding Kava fluidity providers and stakers.
Also, Watkins highlights that Kava has noble goals, including
interoperability with the Cosmos environment and the summary of more
artificial assets.
The next coin on Watkins’s list is reorganized oracle network Band
Protocol (BAND), which participates in the world of blockchain to off-
chain dealings and data. The researcher stated that oracle coins like Band
Protocol and ChainLink (LINK) have been on a roll this year. Watkins says
the large breach between BAND’s current valuation and LINK’s value may
specify that the token has more upside potential.
Finally, Watkins says RUNE (THORChain) is worth mentioning due to its
clever token economic design, which keeps a significant portion of the
coin out of circulation.
“The relationship between validators and [liquidity providers] means the
value of RUNE staked and bonded on the network must be at least three
times the value of external assets held in liquidity pools (since each pool is
50% RUNE).”
He also describes that RUNE acts as the base pair for all the assets
maintained by the decentralized liquidity network. Besides, RUNE is used
as collateral to control the movement of assets in the liquidity pools.
To finish his long thread, Watkins warns that upside potential is never an
assurance even though these coins are relatively reasonable other than
their peers.
“It’s important to remember that lower relative valuations do not
necessarily imply undervaluation, and there are many valid reasons why
these projects are valued below their Ethereum counterparts.”
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