The emergence of blockchain technology has given rise to many new concepts that have transformed different sectors globally. Decentralized finance (DeFi), which has taken the world by storm, falls among the latest innovations.
DeFi makes it possible for anyone to access financial services such as lending, staking, borrowing, and yield farming. Although DeFi technology first emerged on Ethereum, several blockchains have emerged as competitors and attracted the attention of market participants. Avalanche is one such blockchain providing a faster and cheaper alternative to Ethereum.
What is Avalanche?
Avalanche is an open, programmable smart contracts platform that allows anyone to build decentralized applications. It is widely considered one of the fastest smart contract platforms in the blockchain industry, as measured by time-to-finality.
Notably, Avalanche allows developers to build fast, low-cost, and solidity-compatible decentralized applications. In this article and in no particular order, we will be discussing some popular Avalanche DeFi applications.
Let’s get started!
DeFi Applications on Avalanche Network
- Trader Joe
Trader Joe is one of the top-ranking decentralized applications found in the Avalanche ecosystem. It is said to be a one-stop-shop decentralized trading platform with a native token called JOE. On the Trader Joe platform, users can trade different tokens, join pools, lend, and also stake their tokens.
More so, users can participate in the launch of new protocols to acquire newly issued tokens. The platform also has an NFT marketplace where users can flip non-fungible tokens easily.
In addition, Trader Joe builds speedily, paying maximum attention to security, and aims to serve the community at the frontier of DeFi. With the decentralized application, users can also carry out yield farming coupled with a unique, innovative, and highly accessible DeFi experience.
Most interestingly, liquidity providers and xJOE stakers get to share 0.3% of all protocol revenues generated from Swap fees. While liquidity providers get 0.25%, xJOE stakers get 0.05% of these revenues.
- Pangolin Exchange
Launched in February 2022, Pangolin is a community-driven decentralized exchange built for Avalanche and Ethereum assets. The dApp offers fast settlements, low transaction fees, and a self-governing distribution powered by Avalanche. It is said to be the premier DEX of the Avalanche Network. In addition, it uses the same automated market-making (AMM) model as Uniswap.
More so, the PNG token is the native governance token of the Pangolin Exchange. PNG can be used for providing liquidity in farms or single staking. Users can also vote on proposals using the token.
The Avalanche-powered decentralized platform presents users with many features. In the foremost place, Pangolin allows users to swap tokens with the automated market maker (AMM) and also place limit orders for any token on Avalanche.
Users can also provide liquidity on the DEX to earn a 0.25% fee on all trades proportional to the share of the pool. Equally, users can earn PNG by staking liquidity pool (LP) tokens into the available yield farms and super farms. Users can also lock up their PNG tokens to earn more.
The platform further allows for the purchase of AVAX and other coins with the use of credit cards. In addition, portfolio tracking and token watchlisting are possible on Pangolin.
- Platypus Finance
The Platypus Finance protocol is a single-side Automated Market Maker (AMM) designed for exchanging stable cryptocurrencies (primarily ERC20 tokens) on the Avalanche blockchain. Platypus’ AMM facilitates seamless exchange between pegged assets. According to the founder, the protocol’s single-sided liquidity provision redefines the way AMM works.
Platypus Finance helps enlighten the narrative of DeFi and brings critical benefits to users such as lower slippage, higher scalability, and better user experience. Without tampering with flexibility and stability, Platypus StableSwap is majorly concerned with reducing slippage for high-value swaps in the market. At the time of writing, the platform supports the following dollar-pegged stablecoins including USDC.e, USDT.e, DAI.e, and Native USDC.
PTP is the native token of Platypus Finance. The Platypus token can be staked to generate vePTP, which is the voting escrow token that also boosts users’ APR when they stake their stablecoins on the platform.
BENQI is another top-performing DeFi application on Avalanche. BENQI is a liquidity market and liquid staking protocol, consisting of the BENQI Liquidity Market (BLM) and BENQI Liquid Staking (BLS).
Being an algorithmic liquidity market protocol, users can effortlessly supply, borrow and earn interest with their digital assets on the platform. More so, BENQI’s liquid staking protocol tokenizes staked AVAX to grant users the ability to utilize the yield-bearing asset within DeFi applications.
QI is the native token of the platform. It oversees the entire ecosystem of the BENQI protocol including future iterations of the protocol. The token is required to vote and decide on the outcome of all BENQI Improvement Proposals (BIPs).
- Vector Finance
The primary goal of this decentralized application is to enable users to boost their DeFi yields on Avalanche-based assets. It is said to be the best yield booster on Avalanche with a native token represented by the ticker VTX.
Vector Finance allows users to deposit stablecoins and Liquidity Pool tokens so they can earn boosted yield from the Platypus and Trader Joe platforms, without having to stake their PTP/JOE and worry about accruing vePTP/veJOE.
The platform also allows users to put their Platypus Token (PTP) and JOE tokens to work. Note that users can also provide liquidity on Trader Joe and receive VTX as rewards.
- Yeti Finance
This protocol is said to be a quantum leap forward in the stablecoin and lending landscape as Yeti Finance strives to become a liquidity black hole and prime broker.
Developed on the Avalanche Network, Yeti Finance is a decentralized borrowing protocol that allows users to borrow up to 11x against LP tokens, staked assets like Liquid AVAX, and base assets like WETH. It also allows users to borrow over 20x on yield-bearing stablecoins. Interestingly, borrowing is done at a 0% interest rate.
According to Yeti Finance, it gives the best borrowing experience on Avalanche as users are allowed to borrow against their entire Avalanche portfolio, and interest-free.
Still on the list, we have Kalao. It is a complete NFT solution that places special focus on the metaverse and virtual reality. Being a non-fungible token marketplace, Kalao allows users to buy, mint, and sell NFTs with ease. It is regarded as one of the biggest NFT ecosystems built on the Avalanche network. Kalao has a native token with the ticker, KLO.
- Colony Lab
Powered with its native token CLY, Colony is a community-driven Avalanche ecosystem accelerator. The project aims at investing in projects building on the Avalanche network, with a fund governed by the community. Hence, its goals include providing early-stage funding to avalanche-built projects and purchasing selected avalanche projects to form an index while also providing liquidity to existing avalanche defi protocols.
In addition, Colony Lab runs a staking program where users can earn staking rewards from AVAX and other upcoming subnets. Through its airdrops mechanism, the platform issues incentives to token holders by staking their Colony tokens.
Equally, liquidity providers get to earn the CLY token. Colony Lab has a buyback mechanism feature that creates recurring buying pressure on CLY while redistributing bought $CLY to the active community members. Notably, Colony sets out to construct a properly incentivized foundation for the next generation of applications built on the Avalanche network.
- Nereus Finance
Conceived by former Wirex creators, Nereus is a decentralized, non-custodial liquidity market protocol in which users can participate as either depositors or borrowers. Depositors provide liquidity to the market to earn a passive income, while borrowers can borrow in an over-collateralized or undercollateralized fashion.
The Avalanche lending and borrowing protocol is established using the concepts of existing protocols such as AAVE, Compound, and MakerDAO. The aim of Nereus is not to reinvent decentralized finance. The platform seeks to improve existing protocols in anticipation of mass-market adoption.
Nereus parades itself as the market-leading revenue platform as it pays out 50% of protocol fees to active users of the lending platform.
Avalanche has quickly become home to numerous DeFi applications due to its unique design. Over the years, these applications have enabled countless users to seamlessly access different financial services. However, there are various risks associated with using any DeFi protocol. Accordingly, crypto market participants should endeavour to always take the necessary precautions to avoid being wrecked.