David Angliss, an analyst with Australia’s leading cryptocurrency investment firm, Apollo Capital, shares the fund’s regular take on what’s happening in the fast-changing and volatile cryptocurrency space.

 

Attempting to identify “moonshot” cryptos in these bear-market conditions comes with a healthy side of investor caution. That said, you could make the case that now is the perfect time to scope out potentially lucrative opportunities to keep on your crypto-investment radar, no matter how the macro environment continues to shape markets this year.

Projects, for example, that could possess the fundamentals for bear-market survival and bull-market reboundability. (Yeah, not a word.)

In a chat with Stockhead late last week, Apollo Capital’s David Angliss mentioned one such project – Gelato Network (#953 on CoinGecko.com, down 87% from ATH) – and, subsequently, a related protocol called Arrakis. Let’s take a look…

 

Gelato: ‘one of the best B2B cryptos’

Gelato Network (GEL) has a compelling and unique use case that has consistently kept it in Angliss’ sights over the past year.

Like many crypto protocols, it’s not necessarily the easiest one to explain, but in a nutshell, Gelato is a decentralised network of bots that automates smart contracts across multiple blockchains.

As Angliss points out, while smart contracts are essentially known as automated agreements carried out between two parties on the blockchain, they’re not actually so cut and dried when it comes to automation.

The fact is, it’s not possible to easily automate smart contracts that meet certain conditions (e.g. make a sell order whenever Ethereum moons, per the example given in this Medium article).

“One of the main pain points of smart contracts has always been their manual nature, for executing, claiming, swapping and so on,” explains Angliss.

Basically, before Gelato, developers needed to build custom bots related to each specific smart contract process they wanted to automate. And that’s pretty much a highly fallible, pain-in-the-rear process that that requires copious time and effort.

What Gelato offers, then, is an incredibly useful tool to blockchain/smart-contract platform developers – an efficient, outsourced protocol that handles Web3 DevOps needs, freeing up time to concentrate on, what crypto devs love doing best – “buidling”.

“Simply put, all this makes Gelato one of the best B2B cryptos in the market,” notes Angliss.

Transactions executed by Gelato in May, 2022. (Source: www.gelato.network)

Gelato use cases

One major thing Gelato has going for it is its multi-chain capacity (including Ethereum, Polygon, Fantom, BNB Chain, Moonbeam and other EVM-compatible networks). That, and its vast, crypto-wide adoption, as shown in the ecosystem chart below.

And as Angliss notes, while plenty of decentralised finance protocols use Gelato, it operates in other sectors across crypto as well, including gaming. Some of its most prominent use cases in the space so far include:

  • Limit Orders on PancakeSwap (the decentralised exchange, DEX, native to the BNB Chain)
  • Periodically updating debt ceilings on MakerDAO
  • Offering users gasless token claims on Connext
  • Automatically compounding yield-farming vaults on Beefy Finance
  • Automating the breeding of new digital racehorse NFTs on the ZED RUN play-to-earn game
  • Rebasing of algorithmic stablecoins with Tomb Finance, based on the Fantom blockchain
  • Updating price oracles and TWAP on Abracadabra (Ethereum, Arbitrum, Fantom, Avalanche, and BNB Chain)

 

Arrakis, SPICE, and the quest for liquidity control

“He who controls the spice, controls the universe.” 

Notes Angliss, another potential opportunity, spawned from Gelato, is Arrakis and its SPICE governance token. And yup, the naming on this one is inspired by Frank Herbet’s sci-fi classic Dune.

When Uniswap, the crypto space’s primary automated market maker (AMM) and DEX, released its version 3, Gelato built a product in response to the concentrated liquidity features UNI-V3 enables. This was dubbed G-UNI, which later became known as Arrakis.

This community-owned protocol deploys secure, automated liquidity-management strategies, says Angliss, and has shown it has the capacity to earn “pretty decent stablecoin yield” – around 7.5% APY, for example.

“Since launching in February 2021, Arrakis has shown huge growth on all metrics,” said the Apollo analyst. “It currently has a whopping US$1 billion in TVL [total value locked], which is about 15 per cent of Uniswap’s. And it makes Arrakis easily the largest LP [liquidity provider] on Uniswap v3.”

Some of the top DeFi projects to have adopted Arrakis liquidity vaults include MakerDAO, Aave, OlympusDAO, Frax, Synthetix, Fei Labs and plenty more.

And one other thing to note: there is a SPICE airdrop opportunity for Gelato Network investors who lock up their GEL tokens before June 10, 2pm UTC.

Some 30 million SPICE tokens (3 per cent of the total supply) is being allocated to this free distribution. More details can be found on that here.

To sum up, then, on both Gelato and Arrakis, Angliss concluded that: “as long as DeFi’s still a thing and there’s a future with Uniswap V3, then we think these are two protocols that should do extremely well looking ahead.”