Time to kill? Start making money with DeFi apps
At DappRadar, we track over 3,000 decentralized apps across multiple blockchains including ETH, TRON, WAX. Ranked by various metrics and the category they fall into i.e games, exchanges, gambling etc.
One category that has been receiving a lot of attention recently is decentralized finance. In February 2019, the DeFi apps category generated just over 200 daily active unique wallets. During February 2020 that figure is almost six times higher than it was one year ago – 1,147.
Financial mobility and beneficial interest rates on savings are two things on most people’s minds. Especially in the current economic climate. The data shows more and more people are acknowledging the advantages of DeFi apps and exploring ways to benefit from them.
It can be daunting knowing where to start if you want to experience the advantages of using these products. That’s where this handy guide comes into play.
Take some time to explore these five DeFi apps.
The Maker Protocol. Also known as the Multi-Collateral Dai (MCD) system. Allows users to generate Dai by leveraging collateral assets. Approved by “Maker Governance.” Maker Governance is the community operated process of managing the various aspects of the Maker Protocol.
The background is complex but basically, people lock some ETH into a smart contract for a defined period of time. Getting a proportion of its value as DAI in return. They can then use their DAI to get more crypto or perhaps buy NFTs. When it comes time to pay back their loan (and get back their ETH). Users pay back the DAI they borrowed. Plus the interest due on the loan, using the Maker (MKR) token.
Compound is a protocol on the Ethereum blockchain that establishes money markets. These are pools of assets with algorithmically derived interest rates, based on the supply and demand for the asset.
Suppliers and borrowers of an asset interact directly with the protocol. Earning and paying a floating interest rate. Without having to negotiate terms such as maturity, interest rate, or collateral with a peer or counterparty.
Individuals with long-term investments in ETH and tokens are using Compound money markets. Primarily as a source of additional returns on their investment.
The Aave protocol is a decentralized, open-source, and non-custodial money market protocol. Depositors earn interest by providing liquidity to lending pools. Borrowers can obtain loans by tapping into these pools in both an overcollateralized or undercollateralized way.
The Aave protocol is unique in that it tokenizes deposits as aTokens which accrue interest in real-time. Featuring access to highly innovative flash loans, which let developers borrow instantly and easily; no collateral needed.
Uniswap is a protocol for automated token exchange on Ethereum. Designed with simplicity in mind, the Uniswap protocol provides an interface for the seamless exchange of ERC20 tokens on Ethereum.
By eliminating unnecessary middlemen it allows faster, more efficient exchanges. Where it makes tradeoffs. Decentralization, censorship resistance, and security are prioritized.
The majority of token trading occurs on Ethereum but DeFi apps such as Newdex are slowly bringing this activity to EOS and TRON.
In terms of their functionality. Decentralized exchanges or DEX can provide an opportunity for buyers and sellers to come together and make trades in a trustless environment.