Currently, the world of finance is experiencing a real revolution. Blockchain and cryptocurrencies are gradually gaining mass adoption helping to solve a wide range of issues of traditional finance systems. Decentralization has come to rock the industry!
The DeFi ecosystem is actively expanding these days. And, actually, there is nothing surprising given all the benefits of decentralized finance. We’ve provided a closer look at them in our previously published post but let us briefly remind some of the most noticeable features of DeFi.
DeFi: Quick overview
DeFi apps provide much more freedom and flexibility than traditional financial services. To take a loan you do not need to go to a bank and to send some money to your friend you do not need to pay for an expensive transfer. Many operations that used to be rather complicated now can be conducted online within a couple of minutes or seconds. The only thing that is required from a user is having a connection to the internet.
Thanks to the advantages of blockchain, users can enjoy permissionless transactions that do not presuppose the participation of multiple intermediaries. All the transactions are recorded on the network and remain publicly available which contributes to the minimization of fraud risks.
But what tasks can DeFi apps fulfill? Are their capacities limited to money transfers and bank loans only? Definitely not.
The most prominent use cases of DeFi are:
- P2P lending and borrowing
- Savings
- Tokenization
- Stablecoins
- Marketplaces
- Derivatives
The major part of these DApps (decentralized apps) run on Ethereum but today there are also a lot of apps on other blockchains such as Binance Smart Chain (BSC), EOS or TRON.
It is not the easiest task to define the popularity of such apps, as there can be different parameters for doing that like a number of users or a trading volume. That’s why in this article we are not going to provide any rankings of DeFi apps but just a list of those that have managed to gain fame in the industry and credibility among users.
MakerDAO
MakerDAO, a decentralized lending platform, launched on Ethereum in 2015 (actually, it was the same year when Ethereum itself was presented to a wide audience). On the platform, users have the possibility to borrow the USD-pegged stablecoin DAI.
If you want to use MakerDAO no credit checks or identity cards are needed and your geographical location doesn’t matter at all. Cryptocurrencies (mainly Ether or ERC-20 tokens) are used as collateral. The crypto is locked-up till the moment when a person is able to conduct the payments related to the loan itself and incurred fees.
Compound Finance
Compound Finance is another platform that offers p2p lending and borrowing crypto services. The main thing that is required for those who want to borrow some funds or, vice versa, lend them and earn interest on them, is an Ethereum wallet and a couple of free minutes.
As it is typical for DeFi apps, your funds won’t be kept by any third parties. The funds will be transferred directly from one digital wallet to another. Actually, any person who has a device connected to the internet has access to the platform.
The interest rates are adjusted algorithmically by the Compound protocol based on supply and demand. Those users who hold the native COMP token also have an influence on the interest rates.
Uniswap
Uniswap is a well-known Ethereum-based decentralized crypto exchange that boasts high popularity among traders. The liquidity issue that is a typical one for centralized exchanges is solved with the help of an automated liquidity protocol. People are encouraged to trade on the platform as they have the possibility to become liquidity providers. All the money pooled by users is put into a single fund which is applied for executing all trading operations on the exchange.
This fund makes it possible to ensure instant trade for buyers or sellers without the necessity to wait for another party to come to the platform. At the same time, liquidity providers get tokens for making their contribution to the pool.
Synthetix
Synthetix is an Ethereum-based protocol for the creation of on-chain synthetic assets or Synths. These assets are viewed as analogous to derivatives in traditional finance. They are used to track the returns of real-world assets without the necessity to hold those assets. Synchs can be traded on Synthetix’s decentralized exchange (DEX).
As Synths run on the Ethereum blockchain, these assets can be deposited on other DeFi platforms and used for providing liquidity and earning interest.
PancakeSwap
PancakeSwap is a DEX based on Binance Smart Chain (BSC). It uses an automated market maker model (AMM) that offers fast and cheap transactions for anyone. It allows trading against a liquidity pool that is formed with funds of other users.
PancakeSwap provides community governance, the ability to farm liquidity tokens and a full range of features to earn rewards.
There are many other DeFi apps that represent interest to both users and developers. Their number is constantly growing and more and more users are coming to DeFi platforms to benefit from all their capacities. Moreover, it seems that this tendency will continue and the DeFi space is expanding.
And you still have a great possibility to enter this industry with an advanced product. Don’t you think so? At Omertex, we offer high-quality DeFi software development services and are always ready to build an app that will soon earn the highest ranks.
You can take a look at our projects in our portfolio.