Sometimes, we find promising crypto projects that have a unique approach to an existing problem and whose approach might pave the way for something quite exciting. Enzyme happens to fall into this category but let us explore the project to understand what makes it unique and whether it really is as promising as claimed.
Enzyme is an open blockchain and DeFi-based protocol that facilitates on-chain management of pooled funds through smart contracts. The project was previously known as Melon before it was rebranded to Enzyme. It is an Ethereum-based project created by Mona El Isa, making it one of the first few crypto projects to have a female lead. It is ideal for people who want to make more money through investing but they have little knowledge of the market. Asset management provides an alternative through which such investors can still secure profits by entrusting their money to a fund manager who has a deeper knowledge of the market.
Asset management is a hot and lucrative segment in the traditional finance segment. For example, Ark Invest is currently one of the leading asset management companies. However, setting up such a firm is expensive and requires a lot of regulatory approvals. Enzyme creates an avenue where one can set up an asset management fund without having to go through the challenges of starting a traditional fund.
Enzyme makes it possible for fund sponsors and asset managers to launch tokenized investment funds on a DeFi ecosystem while automating some of the critical processes. There are many ways of making profits in the crypto market and one of the most popular avenues is staking. However, not everyone understands the processes involved but would still like to participate. There are Enzyme-based asset management funds that such clients can use to secure a passive income that the fund will stake on their behalf.
Anyone can set up an asset management fund on Enzyme and charge a fee to its customers for the services provided. Such a business approach could theoretically deliver robust returns if one was to create a fund that becomes attractive to investors. There is an incentive for the fund creators and also for people that want to benefit from the crypto market.
MLN is the native token on the Enzyme platform. It currently has 1.79 million MLN in circulating supply and has no maximum supply because of its minting and burning mechanisms. It had a $136 million market cap and traded at $74.88 at the time of this press.
The MLN token is used to facilitate payments for various functions on the Enzyme protocol. However, the platform’s development team is currently working on some improvements to the tokenomics through the Melon Improvement Proposal or MIP7. This proposal will align the project with its long-term growth trajectory while also introducing more transparency to the cost structure.
The MIP7 proposal will make adjustments to the current mint and burn approach. Despite the changes, demand for MLN will likely continue to grow as the platform continues to gain traction. This has however not been the case over the last few weeks during which the bears have prevailed, pushing the price down to its current levels. It traded as high as $103 when it was listed on Decoin but has since then been on a bearish downturn.
MLN’s bearish performance largely reflects the overall market conditions. However, it is still trading at a healthy entry point given its low circulating supply and market cap. The Enzyme platform is quite promising and might yield robust growth for MLN in the future.