DeFi protocols are in the picture again after the FTX collapse. Crypto users realize that they are better off when they have control over their crypto. DeFi protocols and non-custodial wallets give you that control.
So, time to have a look at the 3 best DeFi protocols on Avalanche.
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1) KyberSwap Elastic
One thing is a give in DeFi, the landscape changes fast. That’s why the Kyber network introduced KyberSwap Elastic. Their original protocol, KyberDMM continues as KyberSwap Classic. DMM stands for Dynamic Market Maker. This protocol could dynamically adjust fees, and optimize returns for liquidity providers.
That’s where KyberSwap Elastic steps in and takes it to the next level. They offer concentrated liquidity. As a liquidity provider, you can now determine how concentrated your liquidity will be. This achieves various things:
- Use the pool’s liquidity more efficiently.
- Achieve better slippage.
- Better Volume.
- It mimics higher levels of liquidity.
- Higher rewards as an LP.
This is most effective with stablecoins. For instance, for a USDC-DAI pair that sees little price change. The elastic pools have a customizable price range. This gives LPs the possibility to reach better capital efficiency and improves risk management. Furthermore, the pools auto-compound rewards, which makes for higher APYs. The picture below shows an elastic wstETH-USDC pool.
Source: KyberSwap Elastic
2) Trader Joe
Trader Joe is one of the top Decentralized exchanges on Avalanche. Recently, they also launched on Arbitrum. They offer a variety of DeFi options. For instance:
- Trading.
- Staking.
- Yield farming.
- Lending.
- Liquidity pools.
They also launched their newly designed AMM, Liquidity Book. This will improve your options on the protocol. For example:
- Improved capital efficiency.Â
- Reducing slippage.Â
- Minimizing the impermanent loss impact.
- It improves the user experience:Â This allows you to be more flexible and composable with your liquidity. It uses more liquidity, with efficiency scaling up to 20,000x.
As a liquidity provider, you receive fungible token receipts, which are more composable. As a result, it improves DeFi integrations with other protocols. Liquidity Book offers:
- The base fee: Is the same minimum fee for all trades.
- The variable fee: This helps you with volatility. It’s called Surge Pricing.
The Liquidity Book also makes it possible to trade with zero slippage. The following video is about the Liquidity Book:
3) Multichain
Multichain was formerly known as AnySwap. This was a cross-chain DEX. However, now it’s not a DEX anymore. Their focus as Multichain is on cross-chain bridging. This makes Multichain a CRP (Cross-Chain Router Protocol). They see themselves as the ultimate Router for Web3.Â
So, Multichain makes interoperability between almost all blockchains possible. For example:
- Ethereum like chains like BNB or Layer 2 solutions like Polygon.
- Parachain networks, like Moonbeam on Polkadot.
- Bitcoin type chains like Litecoin.
- Terra on the Cosmos IBC.
- Other chains that use Multichain are: Aptos, Avalanche C-Chain, Celo, or Solana. Some other well-known names include Fantom, Fuse, and Cardano.
They currently connect well over 80 chains, including Avalanche. And more are in the pipeline. They have thousands of daily customers and handle a daily volume of around $100 million. Their TVL is in the area of $1.5 billion. They currently support no less than 3240 bridges.
The Secure Multi Party Computation is at their core. This is a Multichain network of nodes. Each node generates only a part of the private key they use to sign transactions. They sign transactions collectively and can’t do this alone. The key they use to sign is not reconstructed. Furthermore, they never assemble the complete key. In other words, nobody can intercept it. The picture below shows their daily numbers at the time of writing of this article.
Source: Multichain Explorer
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