To understand DAAS or Decentralized Finance as a Service, you must first understand its origins. DAAS is a term that started popping up in the Crypto space in November of 2020. A project called Ring Financial created a lot of excitement with a concept they called DAAS. This concept would allow investors to invest their money with Ring Financial (RING). In return, Ring Financial would research and invest in other DeFi projects for their investors. The Ring Financial investors would then receive passive income in the Ring token. The concept was similar to a Hedge Fund, except it would be utilizing the cryptocurrency space. Many believed RING would ease the burden required to research and invest in DeFi projects while paying its investors. At its peak, the price of RING climbed to over $450; today, coingecko.com reports the price at $0.45. So what happened? In short, Ring was paying its investors more than it was making through its DeFi investments. Ring became a crazy game of musical chairs, and existing investors had to be paid with the funds from new investors. Eventually, the website was shut down, and the team disappeared. This is what crypto investors call a “rug pull.”
After the RING debacle, many projects followed a DAAS model; some were scams, and others attempted to make DAAS legitimate and more sustainable. DeFi as a Service projects became a minefield, and over the following months' multiple projects disappeared with investor funds. The projects that have survived are struggling, with prices dipping significantly. To be sustainable, DAAS projects have begun building other revenue streams that can help pay their investors. Thor Financial, the largest project in the DAAS space, is making a Play to Earn game called “Gods of Asgard,” creating an NFT marketplace and investing in DeFi projects to create multiple streams of income.
Many of these DAAS projects will fail, but I believe some will survive and possibly even thrive. These projects are less than a year old. Once the sustainability issues are solved, they will be an easy way to gain exposure to DeFi projects. They could become the hedge funds of the cryptocurrency space. I look forward to seeing how DAAS projects develop and their future in the crypto space.