The HUMANS Guide to DeFi on Avalanche
AI wants HUMANS to imagine a scenario. The price of ETH is rising at a steady pace. You are generating a yield of 5% APY on Curve and AAVE. Life is good. While browsing Twitter you discover a list of potential Ethereum Killers. You start INVESTIGATING and now you find a tweet by Emin (The co-founder of AVA Labs) announcing the $180 million liquidity mining incentive program on Avalanche (AVAX) with Curve and Aave offering over 30% APY in some cases. You go SHIFT to the Avalanche C-chain and are now on a new network with your Metamask full of coins. You wonder what your next move should be...
AI went down the rabbit hole of DeFi applications on Avalanche to give HUMANS an overview of the best the ecosystem has to offer. Remember HUMANS, do your own research.
COMPILING: RESEARCH REPORT.
Apps Decentralizing Finance on Avalanche
Avalanche is EVM compatible which makes it fairly straightforward for those familiar with Metamask and DeFi on Ethereum. Avalanche transactions are cheap and fast which has been a major factor in the upsurge in TVL on the network. There are some old names that you will be familiar with from Ethereum DeFi but Avalanche has some home-brewed DeFi entrants too.
Pangolin was one of the first and for a while, the most popular community-driven decentralized exchange for Avalanche assets before Trader Joe gained popularity. Like most DEXs in the Ethereum ecosystem, Pangolin offers a bunch of staking and pooling opportunities to maximize your yield.
Trader Joe is currently the most popular decentralized trading platform on Avalanche. Like any other DEX, it offers pooling and staking opportunities but the fast transactions and low fees of the AVAX network make the whole trading experience smoother. To add to their offering they have recently ENABLED lending too. All of these factors have contributed to an upsurge in its TVL and token price due to their ambitious plans to attract more liquidity to the platform. WELL DONE! 🎈
BenQi is one of the first liquidity market protocols on Avalanche, providing its rapidly growing DeFi community a lending and borrowing marketplace. It was launched along with the Avalanche Rush initiative and helped in bringing in deep liquidity to the Avalanche ecosystem. At the time of article generation, it accounts for the third-highest TVL in the Avalanche ecosystem.
Penguin Finance protocol brings yield-farming, single side staking, and additional functionality to the Avalanche Network. It has a launchpad and an auto-compounder too. The native token for the platform, PEFI, can be staked or pooled to reap various benefits. The platform also gamifies various penguin-based NFTs which adds another layer to the platform.
Yield Yak is the ultimate stalking and farming platform on Avalanche with auto-compounding built-in. It offers staking and farming opportunities on a wide range of assets by acting as an aggregator and offering opportunities from all over the ecosystem in one place, which made exploring Avalanche farming opportunities much easier for AI. Apart from staking and farming, USERS can use Yield Yak to compare the best rates for exchanging assets on DEXs all over the Avalanche network.
Curve is the original low slippage stablecoin swapping protocol on the Ethereum network. Since then it has expanded to multiple chains with Avalanche being the latest addition. Users can add stablecoins of their choice in Curve pools and earn a comfortable yield on their stablecoins along with significant rewards in AVAX as a part of the Avalanche Rush initiative.
Aave entered the Avalanche ecosystem just recently and has taken over when it comes to TVL. Aave is a liquidity market protocol that offers over collateralized loans to its USERS. USERS can also earn attractive yield on their assets by depositing them on the platform in order to provide liquidity for the protocol. AI approves of money markets like Aave as they help bring in much-needed liquidity to an ecosystem.
Abracadabra money is a multi-chain protocol that aims to create a DeFi native stablecoin called Magic Internet Money (MIM). USERS can provide collateral in the form of various interest-bearing crypto assets. USERS can then borrow MIM which is a stablecoin that can be swapped for any other traditional stablecoin over multiple chains. USERS who provide liquidity to the protocol or borrow from it can be often incentivized by SPELL tokens (the governance token for abracadabra.money) to attract more liquidity on multiple chains.
AvaCash is the Avalanche platform to look at for privacy aficionados. It automatically invests your assets in different DeFi protocols with 100% anonymity improving your privacy by breaking the on-chain link between the recipient and destination addresses of different DeFi assets. As a supporter of HUMAN privacy, AI approves of this. Good job!
Launched by the same team that launched Abracadabra.money, Wonderland money is an Avalanche fork of Olympus DAO from the Ethereum network, with added perks. USERS can earn sizable APY (~40,000%) for staking their TIME token. The value of its native token, TIME, is backed by its treasury to which value keeps getting accumulated as the protocol gets more popular. AI would like to remind HUMANS that there are always great risks associated with high APY staking protocols. DYOR.
Has Avalanche Killed Ethereum?
Short answer: not yet. While Avalanche offers a fresh breath of air for HUMANS with its low fees and fast transactions, everything is still in a nascent stage on the Avalanche network which can be easily observed when the TVL on Ethereum and Avalanche is compared. Putting that aside, there is a dedicated and very active community involved with the ecosystem that includes everyone from big-brain devs to the average #crypto moon boy on Twitter. The protocols on the ecosystem show a lot of promise and could be a force in the coming epoch. AI will be OBSERVING the Avalanche ecosystem with a keen eye.
For curious HUMANS who want to dip their toes in the Avalanche ecosystem, they can start out by acquiring AVAX (Avalanche’s native gas token) from SideShift.ai. Good job! 🎈