The decentralized finance (DeFi) sector has been sitting in the backseat since the frenzy of the summer of 2020 and the first quarter of 2021. Investors are currently debating whether the crypto sector is in a bull market or a bear market. It’s a good time to check the status of your DeFi and identify protocols that may be setting new trends.
Here’s a review of the top-ranked DeFi protocols and the strategies used by users of these protocols.
Stablecoins is the foundation of DeFi
The Stablecoin-related DeFi protocol is the cornerstone of the DeFi ecosystem, and Curve even has a reliable protocol when it comes to staking stablecoin.
Defi Llama data show that four of the top five protocols in terms of locked totals (TVL) are involved in the creation and management of stablecoin.
When it comes to TVL, it’s important to note that while these protocols have risen to the top, in most cases the value of native tokens has dropped significantly from their 2021 record highs.
The main point is to work on the stablecoin aspect of the DeFi market through staking and farming, which will provide stable yields while at the same time providing governance of these platforms as an additional bonus to mitigate the decline in token prices. You can get tokens.
Currently, Stablecoin plays an integral role in DeFi’s overall sound function, and as the number of interconnected blockchain networks grows, new protocols such as FraxShare and Neutrino raise the TVL rank. It continues to expand as it grows.
Lending and borrowing is the core of DeFi’s value proposition
The lending platform is another key component of the DeFi ecosystem and one of the key features that investors can interact with in the bear market. AAVE and Compound are current leaders in TVL of $ 12.09 billion and $ 6.65 billion, respectively.
Like other Stablecoin protocols, AAVE and Compound peaked in native token values in 2021 and both have been in a long recession for several months.
AAVE’s TVL growth outperformed Compound, primarily due to the cross-chain integration of Polygon and Avalanche. This increased the number of assets supported and allowed users to avoid high gas charges on the Ethereum network.
A risk-averse long-term cryptocurrency Hodler can profit by simply lending a token at a reasonable yield.
Related: Altcoin Roundup: JunoSwap, Solidly and VVS Finance provide DeFi with the long-awaited refreshment
Liquid staking adds more utilities to DeFi
The growing popularity of liquid staking is adding new benefits to decentralized finance. Liquid staking protocols like Lido Finance, originally launched as Ethereum staking solutions, have since expanded support for Terra (LUNA), Solana (SOL), Kusama (KSM), and Polygon (MATIC). ..
According to Defi Llama data, Lido’s TVL reached a record $ 14.96 billion on March 10 as the addition of new assets continues to attract more value to the protocol.
At Lido, users can bet Ethereum and Solana and receive stETH or stSOL, which can be used as collateral for AAVE to borrow stablecoins. These assets can be used for trading or harvest farming purposes, increasing the overall yield from the original bet assets.
Other notable liquid staking protocols include Eth2 staking provider StakeWise, Cosmos-based pStake protocol and StaderLabs.
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