I spend much of my time researching small market cap projects trying to find ones that have real products that haven’t gone mainstream yet. DeFrost Finance (MELT) absolutely fits this bill. DeFrost lets you deposit tokens you already own from a variety of popular forms and amplify their value by receiving additional passive income with little risk. It won’t be small for long.
The only real way to “get rich quickly” in crypto is to invest in a project before the market catches up with it. We have seen Tranquil Finance in recent posts start to do this, and MELT is certainly following suit. I got in MELT on day one and it has changed my portfolio significantly. The key with researching any new project is to identify:
- Will anyone actually care about what this project does?
- Does the project have a functional product?
- Are the development and marketing approaches effective?
If a project answers all three of these as a yes, it’s probably a good opportunity. DeFrost Finance is a home run – the MELT token and the project itself are solid.
MELT launched a little after Thanksgiving in 2021, and saw a huge run up (like every small/new project) followed by a big decline. During this time I DCA’d (dollar-cost-averaged) MELT all the way down to $.15. It has seen significant growth as large traders have begun to realize the value it brings. At the time of this writing it’s just a little over $1 per token, but has been as high as $3 recently (which I took profit around). It still has a small market cap so the price does move a lot, but the rewards you get from the project itself make this clearly a project that will stick around.
The two images above show TVL – Total Value Locked – in both farming pools (people generating additional income) and collateral (people depositing their assets). This project has a market cap of <$2million right now (miniscule in the world of crypto), and yet 20x that value exists within the project. Seems odd, right? Given the age of the project it won’t be that way for long.
How I am Using DeFrost Finance and MELT
We’ve all watched the crypto market correct rather hard the last month. Stablecoins have become the weapon of choice for many seasoned traders – they’re always at $1 – and you get terrific interest on them (compared to savings accounts) in many locations. 20% via UST on Anchor, BlockFi offers 9% interest on USDC, and others. It lets you keep your money in the ecosystem without the downside risk. Stablecoins let you be prepared for dips to really capitalize on market swings and lock in profits when you sell a position. But – in the world of crypto, we always want more than 10-20%. Projects can do this in a day! Prior to DeFrost and MELT, you just had to accept that if the market swings rapidly upwards you could be late to the party by holding stables.
DeFrost – Get Paid Interest While Retaining Ownership
Some of the ways DeFrost works are pretty complicated. But – the concept is pretty easy. You can take AVAX or stablecoins on Avalanche and deposit them into the DeFrost Finance interface. In doing so you’re “adding liquidity” to the asset pool you choose. The protocol pays you interest for this and you retain ownership of the tokens you provide to it (impermanent loss can happen). When you deposit into the protocol, you’re given a sort of receipt for your collateral. This receipt has value – it’s like a line of credit at a bank. You can take this receipt and use it in other areas to dual-invest your money (seriously – there are hundreds of billions of dollars in Decentralized Finance (DeFi)). What DeFrost does is let you aggregate this a bunch of times and get sweet interest rates on everything combined. It auto-compounds for you as well, and you receive additional rewards in H2O (DeFrost’s Stablecoin) and their MELT token as well.
With the market volatility I have a lot of stablecoins I want to be making money on. I have all of my stablecoins in this project right now. My stablecoins are still worth $1 and are safe. For putting stablecoins in this project, DeFrost allows you to receive rewards from multiple sources including Curve, one of the largest borrowing and lending projects in the world. So, rather than just receiving a flat 9% on my stablecoins in BlockFi, I’m able to receive (all of this happens in DeFrost’s project):
- 6.78% APR from Curve
- 0.37% APY from H2O fees on Curve (people borrowing/using the project)
- 71% APR paid in MELT tokens
- 9.5% APR paid in H2O tokens
Even Morevantages to Defrost and MELT
But wait… there’s more. DeFrost incentivizes owning its MELT token by allowing you to stake MELT into the project and boost your rewards further. If you stake MELT you are also gaining MELT rewards – DeFrost pays you 107% APR in interest on your staked MELT.
You can take the receipt you receive when you stake MELT (called sMELT – or staked MELT), and put that into the project to boost your rewards up to 395% in MELT on top of everything above (you’d need a ton of MELT to do that). It’s not a ponzi scheme – DeFrost is incentivizing people to keep MELT out of circulation and making more people want it because of the boosting benefits. There are a significant number of ways to use DeFrost that involve other tokens/liquidity pairs that can make even more than what I’m showing here.
Look – it might be hard to understand how to make full use of DeFrost’s platform. It’s pretty advanced. However, buying and staking MELT on its own is pretty powerful. With a <$2million market cap right now and the growing number of people using this project, MELT realistically is headed to a $30-$50million market cap in the coming months, especially as the market starts to wake back up.
Remember – no project is without risk. Small projects don’t require a ton of money to move the price around and MELT is no exception. Where they’ve really excelled is by decoupling the price of MELT from the project – my deposits aren’t effected, I just get less rewards if the price tanks. But – we’ve seen some pretty big names in crypto investing enter and start talking about MELT, and this is just the beginning.