Decentralized Finance (DeFi) is currently the most significant trend and the biggest category of decentralized applications built on the Avalanche C-Chain Network. The Total Value Locked (TVL) is used to quantify the amount of funds deposited into the various DeFi protocols. Depending on the protocol’s type, the amount of funds deposited serves a different purpose. However, TVL is an excellent measure to understand how big a protocol has become. In this article, you can find the top 10 DeFi protocols on Avalanche by Total Value Locked, coupled with a brief description of each protocol.
Top 10 DeFi protocols on Avalanche by Total Value Locked
|Protocol Name||Category||Total Value Locked (Billions)|
|Curve Finance (CRV)||Decentralized Exchange||1.38|
|Trader Joe (JOE)||Decentralized Exchange||1.22|
|Platypus Finance (PTP)||Decentralized Exchange||0.96|
|Wonderland (TIME)||Reserve Currency||0.85|
|Stargate (STG)||Cross Chain||0.44|
|Vector Finance (VTX)||Yield Optimizer||0.34|
|Homora (ALPHA)||Yield Farming & Lending||0.29|
|Beefy Finance (BIFI)||Yield Aggregator||0.26|
A brief overview of the top 10 protocols
1. AAVE (AAVE)
Aave, is one of the most popular lending platforms deployed on various Blockchain Networks. On Avalanche C-Chain is currently the number one protocol on the list. Aave allows lenders to deposit their funds into the various liquidity pools in exchange for rewards in the native tokens, while others can borrow digital assets through over-collateralized loans. Aave is also the protocol introduced “Flash Loans”. Flash Loans allow anyone to borrow a massive amount of funds without any collateral, as long as the principal is repaid within the same Avalanche transaction block. Aave’s native token, which carries the name of the protocol, is a governance token.
2. Curve Finance (CRV)
Curve Finance, which goes with the ticker $CRV, is a Decentralized Exchange (DEX) optimized for low fee swaps and low slippage between assets of equal value. Such assets can be different tokens pegged to the dollar, such as USDC and USDT, or two tokens pegged to Bitcoin, such as wBTC or hBTC. Curve Finance is an Automated Market Maker (AMM) that relies on liquidity pools, where liquidity providers deposit their tokens and earn rewards or interest. The liquidity provided is then used for exchanging one asset for another. The Curve Finance model is called Stableswap, as it is extremely effective for exchanging stablecoins.
3. Trader Joe (JOE)
Trader Joe is currently the largest Decentralized Exchange based on Uniswap’s constant-product AMM (Automated Market Maker) model. In addition to the AMM DEX, which is the primary product, Trader Joe’ also offers Lending capabilities, staking as well as Rocket Joe – an innovative way of launching new protocols. Based on all these various capabilities offered by Trader Joe, it can be considered more a DeFi Hub instead of just a DEX.
4. Benqi (QI)
BENQI is a DeFi liquidity market protocol, built on Avalanche. Benqi Protocol consists of two main offerings. The first is the Benqi Liquidity Market (BLM) protocol which enables users to effortlessly lend, borrow and earn interest with their digital assets. The second is the BENQI Liquid Staking (BLS) protocol is a liquid staking solution that tokenizes staked AVAX to grant users the ability to utilize the yield-bearing asset within Decentralized Finance applications.
5. Platypus Finance (PTP)
Platypus Finance is a single-sided Automatic Market Maker (AMM) for stablecoins built on the Avalanche network. It is designed to optimize capital efficiency. Instead of requiring liquidity providers (LPs) to deposit their funds in pairs of tokens, liquidity providers can simply provide liquidity through the provision of a single token. Platypus Finance is a Stableswap.
6. Wonderland (TIME)
Wonderland (TIME) is a popular and controversial fork of Olympus that operates on Avalanche Network. The platform claims to be the first decentralized reserve currency protocol. The native token of Wonderland is TIME. The long-term goal of Wonderland is to build an infrastructure that promotes stability and consistency on the Avalanche network using its native token TIME.
7. Stargate (STG)
Stargate is a relatively new protocol launched in March 2022. Stargate is a cross-chain value-transfer protocol and can be considered in the family of protocols we call Bridges. As per the official description, Stargate is a fully composable liquidity transport protocol that lives at the heart of Omnichain DeFi. DeFi users and dApps can transfer native assets cross-chain using Stargate, while accessing the protocol’s unified liquidity pools with instant guaranteed finality.
8. Vector Finance (VTX)
Vector Finance is a yield optimizer built on top of Platypus Finance. It allows users to deposit stablecoins and earn boosted yield from the Platypus platform, without having to stake their PTP and worry about accruing vePTP. Vector Finance also allows users to convert their PTP to Vector’s xPTP, stake it and earn a share of the plartform’s prorformance fees.
9. Homora (ALPHA)
Homora (V2) has a lending functionality as well as leveraged yield farming functionality. There are a total of 3 parties that play an important role on Homora on Avalanche. They are Lenders, Yield farmers, and Liquidators. According to Homora, Lenders can lend different types of assets to earn higher lending interest rate compared to other protocols. Yield farmers can get an even higher farming APY and trading fees APY from taking on leveraged yield farming positions. Liquidators earn a percentage of the platform fees by liquidating positions that reach the liquidation threshold.
10. Beefy Finance (BIFI)
Beefy Finance is a decentralized, multi-chain Yield Optimizer and Aggregator that allows its users to earn compound interest on their crypto holdings. Beefy offers a variety of investment strategies for Yield Farmers and Liquidity providers to optmize their yield. Beefy’s goal is to maximize user rewards from various liquidity pools (LPs), automated market making (AMM) projects, and other yield farming opportunities in the DeFi ecosystem.