With decentralised exchanges or DEX, people can buy and sell cryptocurrencies directly with each other, without the interference of any intermediary In order to facilitate this crypto activity, people connect their crypto wallets to a DEX, choose their crypto trading pair of choice, enter the amount, and swap their digital assets minting profits.
In the first 3 editions of “DeFi Deep Dive”, we learned about “Valuing DeFi Blockchains“, the Top 5 DeFi Assets, and the top 5 Decentralised Exchanges. In this edition, let’s discuss the top five lending platforms. These are:
- Aave
- Compound
- Anchor
- Abracadabra
- Venus
Aave (AAVE) is 2 things – a decentralised finance protocol as well as a crypto token. As a protocol, it enables the lending and borrowing of crypto. Lenders deposit digital assets into liquidity pools. Borrowers put up crypto collateral and take “flash loans” using the liquidity pools. As a token, it gives holders discounted fees and also serves as a governance token by giving holders a vote in the protocol’s development.
- Total Value Locked: $14.13 billion
- MCap / TVL ratio: 0.16
Compound (COMP) enables users to deposit crypto into pools and earn interest. Borrowers take secured loans from Compound pools by depositing collateral. If this collateral falls below a threshold, the loan is automatically liquidated.
- Total Value Locked: $10 billion
- MCap / TVL ratio: 0.12
According to its whitepaper, Anchor aims to become “the gold standard for passive income on the blockchain”. Anchor is a Terra-based savings protocol that offers yield powered by block rewards of major Proof-of-Stake blockchains. ANC is Anchor’s token, which offers holders governance rights and a share of the protocol’s earnings.
- Total Value Locked: $6.2 billion
- MCap / TVL ratio: 0.1
Abracadabra is a cross-chain stablecoin lending protocol. It enables interest-bearing tokens, that users get from staking in vaults, to be used as collateral to mint Magic Internet Money (MIM) which is USD-pegged stablecoins.
SPELL is Abracadabra’s governance token which grants holders voting rights and a share of fees generated by the protocol.
- Total Value Locked: $4.8 billion
- MCap / TVL ratio: 0.22
Venus is a Binance Smart Chain-based algorithmic money market and synthetic stablecoin protocol.
It enables users to directly borrow against collateral. It also enables users to mint VAI stablecoins (which are USD pegged) by posting at least 200% collateral. XVS tokens are governance tokens of the Venus protocol.
- Total Value Locked: $2 billion
- MCap / TVL ratio: 0.1
Note:
- The figures are as of 17 December 2021 and are rounded off.
- Sources: DeFi Llama, CoinMarketCap, Messari, Future Money Wallet.
- TVL = Total Value Locked
- Mcap = Market Capitalisation
Rohas Nagpal is the author of the Future Money Playbook and Chief Blockchain Architect at the Wrapped Asset Project. He is also an amateur boxer and a retired hacker. You can follow him on LinkedIn.
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