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DeFi: Top 10 DeFi Platforms in 2022

DeFi, also known as Decentralized Finance, DeFi refers to the removal of any intermediary that acts or grants permission for any financial activity which differs from existing centralized financial ecosystem which is fully decentralized and not subject to extensive control by any individual involvement.

DeFi is one of the biggest trends in the blockchain industry, as many believe it will overtake traditional finance. In this piece, our editors have researched the Top DeFi platforms to make the most of this new world of finance.

DeFi allows both parties to interact peer to peer rather than through an intermediary, resulting in dramatically improved margins and access to a new buying community for the individual. Tokens are earned by encrypting cryptocurrencies in smart contracts that run on the exchange's trading platforms.

Liquity is an interest-free decentralized borrowing protocol and stablecoin running on the Ethereum blockchain. Liquity uses ETH(Ether) as collateral to lend LUSD(a stablecoin pegged to USD). Borrowers lock ETH in a smart contract to create a “trove”, a Collateral Debt Position(CDP) where users interact with their loans. The debt value can be changed by either repaying the debt or adding more collateral. When the collateral is below 110%, the Trove is liquidated.

Year Launched: 2021
Blockchain: Ethereum
Services: Decentralize Finance, One-click mining, Auto compound
Total Value Locked: $ 24,127,733,805
Community Following: 35,000
Score: 3.5

The Ethereum-powered MakerDAO is a decentralized Collateralized Debt Position (CDP) platform that supports the stablecoin DAI, which aims to maintain its value one-to-one with the US dollar. Users can open a Collateralized Debt Position (CDP) by locking up ether (ETH) or other Ethereum assets as collateral to receive DAI as a debt against the locked-up assets. The platform uses the MKR token for interest payments, and the DAI and MKR paid are burnt once the CPD is closed out.

Year Launched: 2018
Blockchain: Ethereum
Services: Borrowing and Lending/Stablecoin
Total Value Locked: $18,590,000,000
Community Following: 190,400
Score: 4.5

Curve finance is a decentralized exchange protocol on which users can swap and trade Ethereum-based assets. It also focuses on providing liquidity to the markets using a market-making algorithm that automatically buys and sells assets whilst profiting from the bid and ask price spreads, which incentivises users to add their funds to the overall pool and earn interest.

Year Launched: 2020
Blockchain: Ethereum
Services: Borrowing and Lending/Decentralized Exchange
Total Value Locked: $15,560,000,000
Community Following: 205,000
Score: 4.5

Aave, formerly known as ETHLend, is an Ethereum-powered, decentralized peer-to-peer marketplace for borrowing and lending digital assets. The peer-to-peer lending platform enables borrowers and lenders to agree on the loan terms that are then executed using smart contracts.

Year Launched: 2017
Blockchain: Ethereum
Services: Borrowing and Lending
Total Value Locked: $12,670,000,000
Community Following: 349,000
Score: 4.5

Compound Finance is an Ethereum-based, open-source money markets protocol that enables users to borrow or lend against collateral. Anyone can participate in Compound’s liquidity pool and start to earn interest on their digital asset holdings. The interest rates adjust according to the supply and demand on the platform. Compound supports DAI, ETH, and USDC, among other digital assets.

Year Launched:2018
Blockchain: Ethereum
Services: Borrowing and Lending/Stablecoin
Total Value Locked: $11,030,000,000
Community Following: 198,800
Score: 4.0

Uniswap is a decentralized exchange on the Ethereum network that enables users to trade ERC20 tokens autonomously and swiftly. It does so through an algorithm that matches trades based upon supply and demand in a liquidity pool, removing middlemen and intermediaries.

Year Launched: 2018
Blockchain: Ethereum
Services: Token Exchange/Lending
Total Value Locked: $8,290,000,000
Community Following: 718,000
Score: 4.0

A single WBTC is an ERC20 token with a value equal to one bitcoin. WBTC allows for BTC to exist on the Ethereum network, providing much greater liquidity to the DeFi ecosystem. It also enables users to stake BTC on interest yielding protocols.

Year Launched: 2019
Blockchain: Ethereum
Services: DeFi Token
Total Value Locked: $13,000,000,000
Community Following: 9,000
Score: 3.5

Convex finance is a DeFi protocol built on top of Curve finance. Convex protocol maximizes yields by streamlining the Curve boosting experience. Curve LP (liquidity pool) providers can claim boosted CRV (Curve DAO Token) and earn trading fees without locking CRV themselves. Users receive a token called cvxCRV when they deposit a certain amount of CRV tokens into Convex. Moreover, users can choose to stake cvxCRV tokens and receive CVX tokens as staking rewards along with a part of CRV rewards from Curve through Convex.

Year Launched: 2019
Blockchain: Ethereum
Services: Assets
Total Value Locked: $9,700,000,000
Community Following: 21,000
Score: 3.5

The Yearn.Finance Protocol is an aggregator that aims to maximize earnings from yield farming platforms that leverage stablecoins. It does so by automatically switching between lending platforms as one becomes more profitable than the other. It does not, however, change the actual token initially deposited.

Year Launched: 2020
Blockchain: Ethereum
Services: Borrowing and Lending/Yielding Farming
Total Value Locked: $4,350,000,000
Community Following: 152,000
Score: 3.0

Sushiswap is an automated market maker(AMM) based on Uniswap’s code. This means it lets users trade digital assets without a central authority managing the trades. Instead, trades are processed using smart contracts, while mathematical formulas automatically set prices. Users can borrow, swap digital assets and earn rewards.

Year Launched: 2020
Blockchain: Ethereum
Services: DEXes
Total Value Locked: $3,720,000,000
Community Following: 164,000
Score: 3.0

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