A closer look at the protocols driving the 2020 DeFi revolution
So far 2020 has been the year of DeFi dapps. With the emergence of liquidity mining, the sector has seen a flood of investor and user capital as well as developer interest. The new incentive models have captivated market participants with triple-digit gains, while a host of successful IDOs may have started the next fundraising trend.
The decentralized finance categories are still relatively new and evolving. In fact, many DeFi dapps are still debating which category best describes their offer, Decentralized Exchange (DEX) or Decentralized Finance (DeFi), whilst dapps that provide both have a decision to make in the near future.
As the world’s leading dapp analytics and tracking provider, DappRadar has invested time and energy into our new DeFi topic page. Here you can find rankings of the most popular Ethereum DeFi dapps ranked by total value locked and by active unique wallets.
In the coming days and weeks will be adding further metrics to the page allowing much deeper analysis and interpretation of the DeFi dapps ecosystem.
MakerDao is a decentralized lending facility built on the Ethereum blockchain. The Maker platform leverages Ethereum smart contracts to automate the functions of a lending platform, as well as its associated stable coin in a decentralized manner. Users of the platform can post collateral (Ether) and receive the platform’s native stablecoin, Dai, which is designed to mirror the value of the US Dollar.
Aave protocol is a decentralized, open-source, and non-custodial money market protocol. Depositors earn interest by providing liquidity to lending pools, while borrowers can obtain loans by tapping into these pools in both an overcollateralized or undercollateralized fashion.
Curve is an automated market-maker optimized for stablecoins, working as an exchange on one side, and allowing liquidity providers to earn fees and lending interest on the other side. The protocol although relatively new to the market has captured a lot of interest over the last 3 months.
Born as stablecoin project Havven, Synthetix rebranded and expanded its scope prior to launching on mainnet in February 2019. As of May 2019, the Synthetix platform supports over 20 Synths representing fiat currencies, commodities (e.g. gold), and crypto-assets. Stocks, indices, and other derivatives are expected to be added soon.
The second-largest application on Ethereum, Compound is an open-source, autonomous protocol built for developers, to unlock a universe of new financial applications. Interest and borrowing, for the open financial system.
Running on the Ethereum blockchain, in its simplest form, Balancer can be viewed as a decentralized token exchange, much like Uniswap. That means any user with an Ethereum wallet can swap ERC20 tokens. However, for more advanced users, Balancer offers a sophisticated way to build a self-balancing portfolio of cryptocurrencies.
YAM has gained enormous attention after it’s launch on the 12 of August due to its extremely high Yield Farming (More than 1000% APY) rewards and Meme suitability. On top of this, the elastic supply of YAM means that it catches the attention of those who missed out on the AMPL hype train.
YAM Finance is a new elastic supply token where the supply of the token expands and contracts in response to the token price – with the ultimate aim of stabilizing to a $1 USD PEG. A 12 hour “Rebase” will increase/decrease the total supply of the token depends on its price. This means that after a rebase, wallets holding YAM will experience changes to the balance even if no YAM is sent out of the wallet. This concept is similar to Ampleforth (AMPL).
Aside from the different color schemes, the UI of Uniswap V2 is very similar to the original popular iteration of Uniswap. Uniswap v1 remains live and in the near future, it’s probably better to continue using it as it has deeper liquidity pools and is more robust as it’s been alive for a longer period of time.
Liquidity pools are one of the key changes in v2. It sounds complex, but a liquidity pool is just some tokens a user has put into the Uniswap smart contract, which enables it to work.
mStable unites stablecoins, lending, and swapping into one standard by reducing complexity and fragmentation, mutable is attempting to increase the understanding and the usability of stablecoins.
dYdX is one of the fastest-growing dapps within the Ethereum DeFi ecosystem. It went live in Q2 2019 and has since grown quarter on quarter. dYdX is a leading decentralized platform for margin trading Ethereum based assets and is accessible to anyone, anywhere. With dYdX users can earn interest on their crypto or margin trade with custom leverage.
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