It was a great period for the Defi community in Q1, the ecosystem’s total value locked (TVL) rose to $65.06B. A lot of developments are certainly lining up with a couple of things worth watching at the moment.
One of the most notable happenings includes Layer-two (L2) and Ethereum sidechain yield farms on Arbitrum and Polygon now entering primetime. This development will enhance Defi and make it more accessible than ever, with more boost from the Uniswap community that just deployed Uniswap V3 on the Arbitrum Mainnet.
Aave overtook fellow lending protocol Maker to stand as the Defi’s biggest protocol per TVL. That takes us to cast a look at the best Defi projects to boost investment in Q2.
Aave Became Defi Best Protocol Per TVL
Aave token overtook the leading Defi protocol Maker to become the top lending platform. It maintained an upward surge increasing total liquidity to over $20 billion. Some of the digital assets experienced a downtrend in price in the past weeks but Aave has soared high owing to its decision to adopt Polygon.
Polygon is gaining more ground as it becomes a scaling solution and a base for Defi. Aave hit an all-time high when it recorded $661 gaining 700% this year. Going down also determines the viability rate of a digital asset, which Aave is also part of, the coin dropped by 42% but quickly recovered back by 20%.
Aave is a popular token and an Ethereum based peer-to-peer Defi lending and borrowing platform that enables users to earn by providing liquidity to pools. Launched in 2017 as Ethland, the platform has grown to stir the interest of its users. It overtook other popular protocols like Unisawp to become the largest Defi token. Its maximum supply is 16, 000, 000 Aave tokens, 12, 752, 788 tokens in circulation.
Maker Lost Leading Position Among the Defi Protocols
MakerDAO is amongst the best performing Defi protocols. Its current state of layer 2 and multi-chain ecosystem, positions it to take advantage of the ever-growing Defi community because it can provide cheap access to DAI, leveraging the side-chains. Based on this advantage, users pushed out of the Ethereum blockchain due to high prices can turn to MakerDao.
MakerDAO’s growth plan includes a design blueprint for minting DAI on L2 and tracking all DAI still in the LI base contract. This roadmap is expected to carry the L2 transactions until Q3 and Q4, with development lasting through Q2.
Maker is also looking towards Arbitrum which has also launched its Layer 2 Optimism Mainnet. According to reports, Maker intends to work with other solution providers such as Starkware and zkSynco. These partners will support Maker in creating a unique plan to make DAI available on the chains to enable direct mining. Its coin MKR has continuously surged in price following these developments.
Compound Ranks Among the Top Largest
The compound is a leading Defi protocol that has risen to rank among the largest. Coinmarketcap reports that its price has surged more than 500% this year. In Q1 price rose from $143.73 to $911.20. Built on the Ethereum blockchain it offers ERC-20 that allows users to earn interest on their cryptocurrencies by making deposits into one of the networks supported by the pool without any third party.
The platform offers users who lend their crypto assets to the compound protocol, opportunity to get loans in other cryptocurrencies based on their collateral. Its unique services are stirring up huge adoption in the crypto space.
Compound connects lenders and borrowers using a mixture of Ethereum-based smart contracts and other crypto-based services. Lenders get compensation in Comp tokens depending on the number of cTokens in their wallets.
The compound has a different approach that makes it unique. Its decentralized lending platform allows all crypto holders to earn interest on their digital assets and take secured loans.
Polygon is Rising to Bring Security to the Blockchain
Polygon is an Indian blockchain scalability platform also known as Ethereum’s Internet of blockchain. It provides different modules that allow developers to seamlessly deploy and configure their own unique blockchain. Its network works with Hypersign to stir up huge adoption of the decentralized application powered by secured ID and safe access.
Polygon aims to improve upon the Ethereum network by addressing its major challenges which include a high gas fee, bad user experience, and low transaction per second. Due to increased adoption, its native token, MATIC market cap rose to $13 billion in Q1.
A US billionaire investor, Mark Cuban, believes so much in the Polygon Network, has invested in the Polygon Layer 2 scaling solution that can solve Ethereum’s congestion problem. It has a cheaper transaction cost and faster turnaround time that has attracted major projects.
Listing on the BigQuerry platform made Polygon more accessible and available on Google Cloud. Polygon scaling solution is becoming a base for Defi.
Curve Finance Aims for Concentrated Liquidity
The curve is a decentralized exchange liquidity pool on the Ethereum blockchain, ranks among the top 5 largest Defi protocols. It is an Automated Market Maker (AMM) that aims to be a one-stop-shop for all consumer’s financial needs.
It recently launched an algorithm for swapping volatile digital assets to enable low spillage swaps between similar assets such as a particular type of Stablecoin to another. The curve is similar to Uniswap but differentiates itself by accepting more liquidity pools that offer similar assets on its platform. This approach enables Curve to utilize a more efficient algorithm, to offer low fees.
Launched in 2020, Curve aims to create an AMM exchange with low fees for traders and provide fiat savings account for liquidity providers. It focuses on Stablecoin to help investors earn high on lending protocols and avoid volatile digital assets.
Curve native token CRV stands out among other performing Defi tokens. It has shown a strong recovery during the last price fall and seen over a 150% increase this year.
The Defi is a major force driving the crypto industry, the protocols listed above are the most performing and the largest. They provide various unique services that offer users good earning opportunities at cheaper rates.