Decentralized Finance eliminates intermediaries by permitting people, merchants, and businesses to borrow and lend using DeFi Apps within themselves. Liquidity pools in the DeFi apps have a pot of cryptocurrency assets locked within a smart contract and users will be able to use it for exchanges, loans, and other applications.
Some noteworthy apps on the Ethereum Ecosystem are:
Maker is the most notable DeFi application in the market today. The platform has more than $7 billion worth of tokens locked in Maker Protocol Smart Contracts.
MakerDAO is a decentralized lending application on the Ethereum blockchain which supports Dai (DAI). DAI is a stable coin that is pegged to the USD. Users Earn Money by Lending Dai.
Compound is an algorithmic, Autonomous Interest Rate Protocol built for developers, to unlock a universe of open financial applications. Using this DApp users will be able to stake cryptocurrencies like Ether (ETH), DAI (DAI), Ox (ZRX), Tether (USDT), USD Coin (USDC), Wrapped BTC (WBTC), Sai (SAI), Augur (REP), Basic Attention Token (BAT).
Aave is a protocol built on the Ethereum blockchain, where smart contracts run and execute. The native tokens for Dapps, like the AAVE token and aTokens, use the Ethereum blockchain for transactions. More and more Dapps are being built and used, adding to the potential for continued growth on Ethereum
For instance, a borrower will be able to post a collateral in DAI and borrow in ETH. Thus, a borrower will be able to get exposure to different cryptocurrencies without owning them right away. Aave permits Flash loans which are instantly issued and settled.
Uniswap is a protocol for exchanging ERC-20 tokens on Ethereum. It eliminates trusted intermediaries and unnecessary forms of rent extraction, allowing for fast, efficient trading. Where it makes tradeoffs decentralization, censorship resistance, and security are prioritized. There is a growing network of DeFi apps in Uniswap.
SushiSwap is a software running on Ethereum that seeks to incentivize a network of users to operate a platform where users can buy and sell crypto assets. Similar to platforms like Uniswap and Balancer, SushiSwap uses a collection of liquidity pools to achieve this goal.
Being a DeFi Chef permits being able to swap, earn, stack yields, lend, borrow, leverage all on one decentralized, community driven platform.
Currently, the top three DeFi Dapps are respectively Aave, MakerDAO, and Curve, each of which has surpassed $1 billion TVL. Indeed, because of its stable coin weighting, Curve is running neck-and-neck with Aave as the most valuable DeFi Dapp, with around $920 million of adjusted TVL.
Metamask, Frame, Trezor, and Ledger are the commonly used wallets in this ecosystem. The Pools support swapping a range of tokens like USDT, WBTC, WETH, UST and more.
Synthetix is a derivatives liquidity protocol on Ethereum. It enables the creation of synthetic assets (Synths) by staking SNX, and these Synths can be traded for each other directly with the Synthetix smart contracts on dApps such as Kwenta. To provide sETH liquidity, users must hold ETH and sETH in the same wallet.
Balancer is a protocol for multi-token automated market-making. It enables portfolio owners to create Balancer Pools and traders to trade against these pools. Balancer Pools contain 2 or more tokens each with arbitrary weights of the total pool value. The pools provide the Balancer Protocol with liquidity and charge traders a trading fee in return. Pools can be considered automated market-makers since anyone can trade between any two tokens present in any pool.
Users can create various types of liquidity pools, including private, public, and smart pools
The Ethereum based application utilizes smart contracts to enable the non-custodial trading of digital tokens. Bancor plans to create liquidity for digital assets through the use of what it terms ‘Smart Tokens.’
Bancor utilizes two token layers that facilitate its liquidity pools and functionality: BNT and ETHBNT.
Bancor has a native token called Bancor Network Token (BNT), which serves as a Smart Token hub connecting other digital tokens in the Bancor ecosystem.
BadgerDAO is a DeFi platform on Ethereum where you can earn yield and rewards from bitcoin and BTC-related assets. The protocol offers opportunities to earn higher ROI than if you keep your BTC as is. In short, BadgerDAO makes your BTC a productive asset.
BadgerDAO provides a variety of vaults where users can park their wrapped bitcoin and earn yields depending on the yield generation strategies used by the vaults.
A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5
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