Ten Projects to Level Up Your DeFi Game

If you’ve spent any time around the cryptocurrency space in the last year or so, then you can’t fail to have heard of DeFi. Decentralized financial applications are one of the fastest-growing markets in crypto. Worth under $1 billion in January 2020, Ethereum-based DeFi had grown to a peak of $88 billion in May 2021.

Furthermore, over the later part of 2020 and ever since, DeFi has been spreading far beyond its Ethereum-based roots. DeFi ecosystems now exist on other platforms and in many more formats than were around even as recently as last summer. Many people are familiar with the idea of decentralized exchange Uniswap, crypto-backed stablecoin Maker DAI, or even the smart-contract-managed lending pools of Compound.

But there are new kids on the DeFi blockchain, and they’re coming up with ever more exciting and innovative ways to build on the creations of their predecessors. What’s more, many of them are aiming to make open finance applications easier and more accessible than their predecessors.

So if you’re looking to go to DeFi’s next level, here’s a group of dApps worth checking out.

1. Acala

DeFi evolved on Ethereum as a series of applications that are designed to work together, but are ultimately separate apps with their own user interfaces. Acala is a new DeFi platform based on the interoperable Polkadot blockchain, and is touted as an all-in-one DeFi hub for staking, swapping, borrowing, lending, and earning.

Polkadot launched last year on mainnet and is set to start hosting applications on its parachains in the coming months, with Acala currently the hottest contender for one of the first slots. We’ll have the chance to observe a dress rehearsal imminently, when Kusama, Polkadot’s experimental sibling network, activates its own parachains. Acala has garnered over $200 million worth of KSM tokens in a crowdloan auction to raise support for its bid for Karura, the Kusama implementation of Acala.

2. Convergence

One of the key limitations of DeFi is that it currently has no connection to the real world, limiting the available pool of liquidity to crypto-assets. Convergence aims to open the floodgates, with its decentralized protocol allowing anyone to tokenize real-world assets.

The project consists of a unique token wrapping layer that creates tokenized versions of real assets that can enter the decentralized financial system. Convergence also operates a decentralized exchange allowing users to trade tokens, using automated market makers for price discovery and pools for liquidity.

In February, Convergence raised $2 million in funding, including backing from Alameda Research, Hashed, and OKEx’s Block Dream Fund, among others.

3. Balancer

Balancer works using the basic principles behind an index fund or a fixed portfolio. Balancer’s pools are comprised of up to eight crypto-assets, the proportions of which are fixed according to the pool rules. If the value of a particular asset goes up, the pool releases enough of the asset to rebalance, which will be bought by traders seeking to go long in a bull market. Similarly, if the price goes down, the market will skew towards the sell-side.

Anyone providing liquidity to the pools can earn a share of trading fees from pool users. In this way, Balancer allows investors to participate in a form of index fund but earn fees from traders rather than pay them to fund managers.

4. Maiar

Maiar Wallet, backed by the founders of the Elrond platform, is a digital wallet and global payment app linked to a phone. It allows users to send and receive funds instantly, securely, and cheaply anywhere in the world. It has a user interface as slick and intuitive as a service like PayPal, except it’s completely decentralized and non-custodial.

The Maiar Wallet uses an identity layer that maps the phone to the wallet address, connecting users to the contacts in their address book without compromising privacy.

Huawei recently integrated the Maiar Wallet to its AppGallery app marketplace, so Huawei phone users can now download it to their phones in seconds.

5. Crypto.com DeFi Swap

Crypto.com is known for its endeavors to become a trusted one-stop-crypto shop. Operating since 2016, the company has steadily expanded its range of services and products at an impressive rate - now operating an app, a range of crypto-integrated Visa cards, a payment network, and an exchange, among others.

In mid-2020, Crypto.com also extended its footprint into DeFi, which now includes DeFi Swap – a Uniswap-like decentralized exchange with CRO token incentives built-in. Anyone who stakes their tokens into DeFi Swap liquidity pools can earn triple yield. Along with a share of fees from users who swap tokens in the pool, the program also pays CRO DeFi yield to those who stake CRO tokens and bonus yield for providing liquidity to selected pools.

6. RSK

RSK is the smart contract side chain of the Bitcoin blockchain, secured by around half of Bitcoin’s hash rate. The platform has been hosting DeFi applications since stablecoin project Money on Chain, a Bitcoin-backed crypto-dollar, launched in late 2019.

Recently, RSK hit the milestone of 1,400 BTC locked in its platform, along with passing 50,000 users. The achievements came after the launch of decentralized Bitcoin trading and lending platform Sovryn in late 2020.

RSK is also proving to be popular among users of the DAI stablecoin, thanks to rDAI, an ERC20 representation of DAI on the RSK platform, which is faster and cheaper than Ethereum.

7. Moma

Many DeFi protocols operate according to decentralized governance, where token holders vote on proposals. This usually includes deciding which tokens will be included in the protocol, and as such, results in arbitrary caps and limits on the tokens supported in DeFi.

Moma Protocol automates this process through its proprietary smart contract factory, which allows anyone to produce, manage, accelerate, and aggregate lending markets. In doing so, the project aims to make lending in DeFi more scalable and gain deeper liquidity across a broader range of tokens.

Moma recently successfully completed a funding round worth $2.25 million. The round was led by Coinbase investor Fundamental Labs and included participation from SevenX Ventures, AU21 Capital, Blocksync Ventures, among others.

8. CVI

CVI, or Crypto Volatility Index, is a novel instrument for DeFi based on the principles underpinning the Chicago Board Options Exchange’s Volatility Index (VIX.) It’s an index that tracks volatility and allows traders to take out a position based on their predictions about market volatility. Traders use these positions as a hedge, as volatility is generally negatively correlated with stock market returns.

CVI replicates this in a decentralized way, using oracles from Chainlink to compute the index based on cryptocurrency option prices. Along with using CVI positions as a hedge, liquidity providers can lock liquidity in the platform for a share of fees.

During the recent bearish activity in the crypto markets, CVI users were able to successfully profit from their hedged positions, proving its effectiveness as a risk management tool in a diversified portfolio.

9. Impossible Finance

Impossible Finance is a DeFi incubator, launchpad, and swap platform which raised over $7 million from VC funds and angel investors during a recent funding round. The project aims to democratize access to finance by using DeFi protocols to give access to institutional-grade products to everyone.

The project is set to launch the second version of its Swap product, which also serves as a liquidity launchpad for new tokens. The improvements to the DEX mean that token swaps on Impossible Finance are as efficient as those on the Curve protocol and cheaper than on Uniswap’s V3. The team behind Impossible Finance comprises veterans in DeFi and crypto, including Calvin Chu, who was formerly with Binance Research, so it’s one worth watching.

10. Orion Protocol

While the DeFi ecosystem has been expanding, it now means that there are dozens of decentralized exchanges operating on nearly as many platforms. From the user perspective, there are multiple user interfaces and perhaps also different wallet requirements. Furthermore, liquidity is fragmented across many platforms. The situation is largely the same even in the centralized exchange markets.

The premise of Orion Protocol is deceptively simple and yet very compelling. It aims to become a full market aggregator, pulling liquidity from every available source, including centralized and decentralized exchanges, to provide a single terminal with access to the entire crypto markets.

It’s already integrated with Ethereum and Binance Smart Chain, with several other platforms to follow.