7 Innovative dApps that DeFi the Status Quo
DeFi applications are decentralized, permissionless financial instruments that utilize blockchain technology. DeFi apps come in all shapes and sizes across multiple chains. From NFT borrowing, to staking, to stablecoin lending, here are 7 game-changing dApps that are "DeFi"ing the status quo.
Table of Contents
Bend DAO
Bend DAO allows users to offer their NFTs as collateral to borrow ETH. Users can get up to 40% of their NFT's floor value before the NFT sells (the loan is paid back with interest from the borrower). Buyers can also place a 60% down payment to purchase a blue chip NFT from any major NFT Marketplace.
The protocol utilizes a flash loan from AAVE to cover the difference. For borrower protection, users have a 24-hour liquidation protection in order to allow them time to pay off loans that are near liquidation due to market fluctuation. By borrowing NFTs using Bend DAO, users are eligible for all of the same perks and airdrops as a traditional holder.
SushiSwap
SushiSwap is a community-driven protocol built to solve what is known as the “liquidity problem”. SushiSwap offers a decentralized exchange, a decentralized lending market, yield instruments, an auction platform, an AMM framework and staking derivatives, all while keeping a decentralized governance through $SUSHI holders.
Sushi 2.0 with new features and improved UI, is set to release in Q4 2022. With Sushi 2.0, cross chain swaps, investing, and analytics of all of their 15 supported chains can take place in one site. Today, SushiSwap has around 508.01 M in TVL, with that figure to surely rise following the Sushi 2.0 upgrade.
Curve Finance
Curve Finance is a decentralized exchange liquidity pool on Ethereum. Curve specializes in efficient stablecoin trading with low fees and slow slippage. Curve offers rewards to liquidity providers who are essential to providing low fee stablecoin trading. With the $CRV token, users can vote on protocol changes, stake their CRV, and boost their liquidity rewards.
Boosting CRV rewards is done by vote locking, which gives users 2.5X more on their CRV rewards. With a familiar Windows 97-style front page, Curve gives users an easy to understand platform with a wide variety of stablecoin and liquidity pool opportunities. CRV has around 5.94 Billion in TVL, well below its ATH of 23.4 Billion TVL.
Raydium
Raydium is an Automated Market Maker (AMM) on Solana which utilizes the central order book of DEX Serum to grant users fast trades, shared liquidity, and new features to earn yield. Raydium provides users access to liquidity beyond their own pools without access to a central order book.
Since Raydium is built on Solana, the network fees are almost negligible with lightning fast speeds. Users can earn RAY tokens by providing liquidity while farming and staking. Anyone can create a pool on Raydium so its essential to do your own research and understand what products you are investing in.
Famous Token Market
Famous Token Market on Solana is changing the NFT landscape as we know it. Long gone are the days of Discord grinding to get whitelisted for your favorite Solana project. Now you can go on the Famous Token Market and buy WL tokens for any upcoming project. You can create raffles on the protocol, send NFT messages to wallets, and play coinflips among other features.
Some interesting features include bulk listing and bidding, as well as FoxySweep which allows users to quickly sweep NFT floors. Famous Fox Federation created utility for not just their holders, but Solana NFT enthusiasts as a whole. Many are eager to see similar projects on other chains in the future.
AAVE
AAVE is a decentralized liquidity protocol where users can deposit and borrow crypto assets. AAVE is completely permissionless, meaning there are no KYC or identity requirements needed to borrow funds. Borrowers are subject to either over-collateralized perpetual loans, or under-collateralized one block liquidity loans. Users who deposit liquidity can earn fees on trading and lending.
AAVE is an open source, audited, and secure protocol. At the center of the AAVE ecosystem is the AAVE token, a governance token used to decide the outcome of AAVE’s updates. Some of our favorite features on AAVE are Flash Loans, which are non-collateralized loans of any amount that is paid back within that particular block. Such flash loans can be used for quick arbitrage opportunities.
Please note, utilizing flashloans requires blockchain developer knowledge and much of the existing tutorials on the web for this topic have been found to be malicious.
(AAVE)
MakerDAO
MakerDAO is the powerhouse behind DAI, one of the world’s largest stablecoins. With a TVL of 7.2 billion, MakerDAO is a force to be reckoned with. Over 400 apps and services integrated DAI into their platform thus far. DAI is a stablecoin generated against crypto collateral assets.
DAI is a decentralized approach to stablecoins operating in a manner unique from BUSD or USDC. MKR Token maintains and manages DAI, which is run by a combination of public retail investors and external parties. By utilizing Maker DAO, users can deploy crypto assets into DAI to earn interest on their assets.
Users can also multiply exposure to ETH and BTC by 4.33X utilizing MakerDAO. This feature is particularly useful for utilizing DeFi loans.
(Maker DAO)
Conclusion
While the opportunities that DeFi brings are vast, it is important to always research before making a decision. Fully understanding the assets you are staking, farming, or borrowing is essential for safe and profitable DeFi investing.
Almost every application shared today is open-source, meaning their source code is publicly available for review. Understanding Impermanent Loss is fundamental when considering a Liquidity Pool.
Thank you for joining in on the conversation today and as always...
Keep your fingers on the Pulse!
FAQs
What makes a DeFi app different from a regular app?
DeFi apps are decentralized finance apps that utilize smart contract technology to allow permissionless peer to peer trading. An application by definition is just a computer program that performs a specific function.
Does DeFi have a bright future?
With Billions already locked across various DeFi protocols alongside with future blockchain innovations, the future of DeFi is bright and endless.
Is it difficult for a beginner to start on DeFi apps?
Typically, DeFi applications are designed in ways to allow easy user experiences on web browsers. Despite their easy use, it is not advised for beginners to utilize DeFi without prior research.
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Author: Ken Melendez
✍️ Head of Content @ Cindicator
📊 Certified Bitcoin Professional
🔐 Blockchain Chamber - Chapter President
Who is Cindicator?
Cindicator is a world-wide team of individuals with expertise in math, data science, quant trading, and finances, working together with one collective mind. Founded in 2015, Cindicator builds predictive analytics by merging collective intelligence and machine learning models. Stoic AI is the company’s flagship product that offers automated trading strategies for cryptocurrency investors. Join us on Telegram or Twitter to stay in touch.
Disclaimer
Information in the article does not, nor does it purport to, constitute any form of professional investment advice, recommendation, or independent analysis.