DeFi protocols are gaining prominence again after FTX’s bankruptcy. Crypto users realize that they are better off when they have control over their crypto. Let’s take a quick look at the best Avalanche-based DeFi projects in this post.
Best Avalanche-based DeFi protocols to follow in 2023
KyberSwap Elastic
Kyber recently introduced KyberSwap Elastic. Their original protocol continues as KyberDMM, KyberSwap Classic. DMM stands for Dynamic Market Maker. This protocol can dynamically adjust fees and optimize returns for liquidity providers.
This is 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 provides users with several advantages:
- Use the pool’s liquidity more efficiently.
- Get better price difference.
- Better Volume.
- It mimics higher liquidity levels.
- Higher rewards as LP.
This is most effective with stablecoins. For example, for a USDC-DAI pair that sees very little price change. Elastic pools have a customizable price range. This allows LPs to achieve better capital efficiency and improve risk management. Also pools are automatic compound rewards that provide higher APYs. The image above shows a flexible wstETH-USDC pool.
Trader Joe’s
Trader Joe’s is one of the largest decentralized exchanges in Avalanche. Recently, they also launched in Arbitrum. They also released the newly designed AMM, Liquidity Book. This will improve your options in the protocol. For example:
- Improved capital efficiency.
- Reducing the price differential.
- Minimizing the temporary loss effect.
- Improves user experience: This allows you to be more flexible and accountable with your liquidity. Uses more liquidity with efficiency scaling up to 20,000x.
As a liquidity provider, you receive NFT receipts, which are more combinable. As a result, it improves DeFi integrations with other protocols. The liquidity ledger offers:
- Basic fee: The same minimum fee for all transactions.
- Variable fee: This helps you with volatility. This is called ripple pricing.
Multichain
Multichain was previously known as AnySwap. The platform was a cross chain DEX. However, it is no longer a DEX anymore. As Multichain, their focus is on bridging chains. This makes Multichain a CRP (Cross-Chain Router Protocol). They see themselves as the ultimate Router for Web3. Thus, Multichain enables interoperability between almost all of its networks. For example:
- Ethereum-like chains like BNB or Layer 2 solutions like Polygon.
- Parachain networks like Moonbeam in Polkadot.
- Bitcoin-type chains such as Litecoin.
- Terra at Cosmos IBC.
- Other chains using multichain are: Aptos, Avalanche C-Chain, Celo or Solana. Some other well known names are Phantom, Fuse and Cardano.
They currently connect more than 80 networks, including Avalanche. In addition, they have thousands of daily customers and manage a daily volume of approximately $100 million. Their TVLs are around $1.5 billion. They currently support at least 3240 bridges.
Secure Multilateral Computing is at their core. This is a multi-chain node network. Each node generates only a portion of the private key they use to sign transactions. They sign transactions collectively and cannot do it alone. The key they used to sign is not regenerated. Also, they never put the full key together. In other words, no one can prevent it. The image above shows the log counts at the time this article was written.
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