The world of finance is undergoing a revolution, and at the heart of this transformation is Decentralized Finance (DeFi). DeFi is a burgeoning sector in the blockchain ecosystem. It offers a decentralized alternative to traditional financial systems.
This article will take you through the best DeFi crypto platforms. Also, it will explore the best DEFI Crypto unique features and the exciting projects they host. We will focus on Ethereum, Solana, Cardano, Polkadot, Avalanche, and Polygon.
Contents
Best DEFI Crypto – Crypto Overview
Decentralized Finance, or DeFi, is a revolutionary concept in the blockchain ecosystem. It’s a financial software built on blockchain technology that aims to make financial applications more open, transparent, and accessible to all, including the unbanked population.
DeFi developers envision and build financial products such as stablecoins, money markets, non-custodial exchanges, and oracles. The DeFi tech stack comprises three layers:
- The Application Layer (the frontend visible to the users)
- The Protocol Layer (the application protocol defining specific sets of rules),
- The Base Layer (the blockchain protocol allowing value and data to be recorded and transferred across the chain).
Top Blockchain Protocols For DeFi
Blockchain technology has revolutionized the financial landscape, giving birth to decentralized finance (DeFi). At the heart of this transformation are blockchain protocols, which serve as the foundational layers upon which DeFi applications are built.
These protocols ensure security, transparency, and interoperability, making decentralized financial systems viable and efficient. Let’s delve into some of the top blockchain protocols that are driving the DeFi movement forward.
1. Ethereum
Ethereum is a pioneer in the DeFi space, nurturing it to grow into a decentralized global financial system. Ethereum’s DeFi solutions provide decentralized alternatives to most financial services, such as
- Sending money globally
- Trading crypto tokens
- Borrowing funds with/without collateral
- Accessing stable currencies and many others.
Ethereum is a developer favorite for building dApps for crypto-based financial services like lending, borrowing, private payments, and earning interest.
Ethereum-Powered DeFi projects
Aave Wall Street
Aave is a decentralized non-custodial liquidity protocol. Users can participate in it as borrowers or depositors.
Depositors provide enough liquidity to the market to earn a passive income. Borrowers can borrow in an overcollateralized or undercollateralized fashion.
Compound Portfolio
The compound is a decentralized interest rate protocol that allows digital asset holders to lend and borrow crypto against collateral.
Depositors maintain the platform’s liquidity by adding assets. And they can immediately start earning compounding interest.
Wide-Ranging DeFi dApps Users
A plethora of dApps built on Ethereum catering to the finance sector. The popular sub-categories of Ethereum crypto DeFi apps are
- Lending & Borrowing (e.g., Aave and Compound)
- Token Swaps (e.g., UniSwap and Matcha)
- Trading and Predictions Market (e.g., Polymarket and dYdX)
- Investments (e.g., Token Sets and Index Coop)
- Payments (e.g., Tornado Cash and Sablier)
- Crowdfunding (Gitcoin Grants)
- Insurance ( Nexus Mutual and Etherisc)
- Portfolio apps like Zapper.
2. Solana
Solana is another major blockchain network that aims to bring blazing speed, scalability, and low fees to Decentralized Finance. Many new DeFi projects have established themselves on Solana, exploding its DeFi ecosystem. Solana ticks all the boxes for a DeFi-focused chain.
It prevents front running through fast block times and the Proof-of-History consensus mechanism. It avoids congestion and keeps transaction costs low through its node scalability.
Potential Blue Chip DeFi Projects On Solana
Port Finance and Solend
These two Solana-based projects are designed to act as decentralized banks similar to the very popular Ethereum projects Compound and Aave.
As of 2021, Port Finance is the 19th largest dApp on Solana. It has a total value locked (TVL) of around $122 million, according to DeFi L lama.
Port runs a liquidity mining program. Users can earn the protocol’s governance token (PORT) and interest paid for their deposited assets.
Saber
Similar to Ethereums’ stablecoin-focused decentralized exchange Curve Finance, Saber is the Solana DeFi protocol where users can peg assets such as stablecoins or wrapped assets efficiently with low levels of slippage.
Unlike Ethereum liquidity pools, Saber pools do not require users to deposit equal amounts of both assets.
Parrot Finance
Equivalent to Ethereum’s Marker DAO, Solana’s Parrot Finance is a platform for users to lock up their assets and mint a stablecoin (PAI) in return.
Although Parrot currently has a cap on the amount of PAI that can be minted, these restrictions will likely be lifted as the platform grows and demand stabilizes.
3. Cardano
With the Alonzo upgrade on Sept. 12, 2021, Cardano went live with smart contracts opening its ecosystem to a range of promising dApps.
Developers are already moving to Cardano to use its new smart contract functionality to develop exciting dApps projects.
Some Cardano-Based Projects for DeFi
ERGO DEX
Developed by a Cardano, Waves and Chainlink team, ERGO DEX is a smart contract platform built for DeFi dApps. ERGO DEX is a non-custodial exchange. It allows users to share liquidity and trade interchangeably on exchanges built on the ERGO or the Cardano network.
Empower
Empower is a Cardano project that aims to leverage the strength of decentralized finance to address the shortage of affordable housing in Africa.
The platform intends to break the vicious housing supply cycle that persists for factors like lack of funding, high cost of capital, high cost of building, and lack of supply of affordable housing.
MELD
Meld is a decentralized protocol incorporating fiat loan capabilities into the crypto ecosystem. It facilitates the development of DeFi products that can level the world’s financial playing field by creating opportunities for the bottom 97% of its population.
4. Polkadot
The Polkadot ecosystem comprises the Polkadot relay chain at the base layer and its network of para chains at layer 1. Parachains are heterogenous blockchains built over Polkadot.
DeFi projects are being built on the native Polkadot chain as well as on the parachains. Polkadot’s interoperability feature stands out, enabling communication between para chains and facilitating the integration of DeFi projects developed on Ethereum and Bitcoin.
Polkadot offers flexibility to para chains, allowing them to have native tokens and governances. It also ensures the economic security of all connected para chains through the Relay Chain validators.
Polkadot As A Unique Ecosystem for DeFi
Polkadot is one of the most adopted blockchain ecosystems for developing liquid stacking solutions. Liquid staking enables immediate liquidity for staking tokens by obtaining tradable synthetic tokens without a lockup period.
Polkadot supports existing DeFi concepts and introduces new ones like decentralized sovereign wealth funds (SWF). Some of the current Polkadot-based DeFi projects include:
- Acala – A DeFi hub that allows users to send and receive USD across any blockchain connected to Polkadot.
- Staff – A platform that enables users to stake their tokens and obtain an alternative token (token) for trading and exchanging without waiting for the un-bonding period to complete.
- Bifrost – A para chain designed for staking liquidity, allowing users to deposit and mint tokens.
- Equilibrium – A cross-chain money market that combines synthetic asset generation and trading with pooled lending.
5. Avalanche
Avalanche is a smart contract-capable blockchain platform known for its low costs, high transaction speed, and eco-friendliness.
It has emerged as a rising star in the DeFi space, attracting major platforms like SushiSwap, Aave, and Curve to network with it.
Avalanche’s success can be attributed to its fast and cheap transactions, which are hundreds of times cheaper than on larger networks like Ethereum.
With its compatibility with Ethereum’s assets, apps, and tooling, Avalanche offers developers the benefits of higher throughput, speed, and lower fees. Avalanche achieves finality in one second, making it suitable for developing decentralized financial applications.
Avalanche is Composed of Three Blockchains
- Exchange Chain (X-Chain) – The X-Chain creates and transacts Avalanche assets, with fees paid in AVAX.
- Contract Chain (C-Chain) – The C-Chain represents the smart contract feature of Avalanche, allowing developers to build decentralized applications. It is compatible with Ethereum Virtual Machine (EVM), enabling easy deployment of Ethereum DeFi apps on Avalanche.
- Contract Chain (C-Chain) – The P-Chain enables the creation of L1 or L2 blockchains known as subnets. It manages all the Avalanche subnets and validators, providing economic security.
6. Polygon
Polygon, previously known as MATIC, has gained significant traction as a DeFi platform. It has experienced tremendous growth in 2021, offering fast and cost-effective transactions compared to larger networks like Ethereum.
Many popular DeFi platforms, including SushiSwap, Aave, and Curve, have integrated with Polygon. Polygon is a twin platform to Ethereum, providing developers with a cheaper and faster alternative.
It allows for the building and connection of Ethereum-compatible blockchain networks and applications.
DeFi Development By Webisoft
At Webisoft, we specialize in building DeFi solutions for enterprises and startups. Our team of developers stays updated with the latest upgrades and advances across different blockchain protocols.
It includes Cardano, Solana, Polygon, Avalanche, Polkadot, and more. We offer a range of DeFi development services, including:
- DeFi dApps Development – We develop DeFi applications on peer-to-peer networks, giving users more control.
- DeFi Smart Contracts Development – Our team develops autonomous smart contracts that verify and execute crypto-related transactions without involving third parties.
- DeFi Wallet Development – We prioritize security in developing DeFi wallets, ensuring users have complete control over their funds and data without relying on third parties.
- DeFi Lending Platform Development – Our expertise lies in building feature-rich DeFi lending platforms. It allows users to supply, lend, borrow, and lock their funds through smart contracts through peer-to-peer networks.
- DeFi Token Development – We build secure payment, utility, and equipment tokens on blockchain platforms.
- DeFi Exchange Development – We create decentralized exchanges that provide complete control over privacy and data, facilitating the decentralized trading of DeFi tokens.
Conclusion
In wrapping up, while Ethereum continues to be a major force in the DeFi arena, it’s evident that the ecosystem is broadening its horizons.
New entrants like Solana, Cardano, Polkadot, Avalanche, and Polygon are not just participants but are shaping the future of decentralized finance with their unique offerings.
As we witness this dynamic evolution in DeFi, it’s crucial for both developers and users to stay informed and adaptable. To navigate this ever-changing landscape and leverage the best of what each platform has to offer, consider partnering with Websioft. Dive deep into the world of DeFi with us and let’s shape the future together.
