DeFi(Decentralized Finance) is the movement that leverages decentralized networks to transform old financial products into trustless and transparent protocols that run without intermediaries. So far, 191 DeFi projects are built on Ethereum.
DeFi projects on Ethereum can be roughly divided into the following 12 categories: Asset Management Tools, Alternative Savings Apps, Derivatives, Yield Aggregators, Decentralized Exchanges, Margin Trading, DeFi Infrastructure & Dev Tooling, Decentralized Insurance, Asset Tokenization, Decentralized Lending, Prediction Markets, Stablecoins.
Here belows some examples:
💨 Asset Management Tools
AlphaWallet: AlphaWallet is a mobile crypto wallet that interacts with smart contracts and dApps.
DeFi Saver: DeFi Saver is a management dashboard for decentralized finance protocols, including MakerDAO CDPs (with features such as automatic liquidation protection), as well as Compound, dYdX and Fulcrum.
Dhedge: dHEDGE is a platform for managing investment activities on the Ethereum blockchain where you can put your capital to work in different strategies based on a transparent track record.
InstaDApp: Instadapp is a platform providing users and developers with a single point of integration to access all the DeFi protocols
Stake DAO: Stake DAO is a non-custodial platform that enables anyone to easily grow their crypto portfolio. It is built on top of decentralized blockchain protocols, offering a seamless way for people to grow, track, and control assets right from their wallet.
💨 Alternative Savings Apps
Linen App: Linen App provides a non-custodial wallet and allows you to connect your U.S. bank account to supply digital dollars (stablecoin USDC) to the Compound liquidity pool on the Ethereum blockchain.
PoolTogether: PoolTogether is a no-loss, audited savings game powered by blockchain technology. Interview with PoolTogether co-founder.
Cryptex Finance: Cryptex Finance tokenized Total Cryptocurrency Market Capitalization into TCAP token that gives holders real-time price exposure to this key metric.
DefiPulse Index: The DeFi Pulse Index is a digital asset index designed to track tokens’ performance within the Decentralized Finance industry.
FinNexus Options: FinNexus Options is a decentralized options protocol with a multi-asset single-pool model where option buyers can set their own option terms.
Hegic: Hegic is on-chain options trading protocol, allowing you to buy ETH call and put options as an individual holder (buyer) or sell ETH call and put options as a liquidity provider.
Olympus DAO: Olympus is a decentralized reserve currency protocol based on the OHM token. Each OHM token is backed by a basket of assets in the Olympus treasury, giving it an intrinsic value that it cannot fall below.
Synthetix: Synthetix platform enables creation of the on-chain synthetic assets that tracks value of assets in the real world. Interview with Kain Warwick, founder of Synthetix.
💨 Yield Aggregators
Harvest: Harvest automatically farms the highest yield available from the newest DeFi protocols, and optimizes the yields that are received using the latest farming techniques.
Pickle: Pickle allows users to deposit tokens from liquidity pools such as Uniswap or Curve, and then execute sophisticated strategies that maximize the returns of the depositor.
Rari Capital: Rari Capital is a robo advisor that ensures you receive the highest yield, beyond just lending.
Vesper: Vesper provides a suite of yield-generating products, focused on accessibility, optimization, and longevity.
Yearn.finance: Yearn.Finance automates yield-maximizing profit switching opportunities for liquidity providers and yield farmers.
💨 Decentralized Exchanges
1inch.exchange: 1inch.exchange split the order to several decentralized exchanges like UniswapExchange, KyberNetwork, Bancor and RadarRelay to avoid high price slippage.
Balancer: Balancer Exchange allows you to swap ERC20 tokens trustlessly across all Balancer’s liquidity pools.
Bancor: Bancor is an on-chain liquidity protocol that enables automated, decentralized token exchange on Ethereum and across blockchains.
Curve: Curve is an exchange liquidity pool on Ethereum designed for extremely efficient stablecoin trading.
Dodo: DODO is a on-chain liquidity provider which leverages the Proactive Market Maker algorithm (PMM) to provide on-chain and contract-fillable liquidity for everyone.
SushiSwap: The SushiSwap exchange allows users to swap any ERC20 token into any other ERC20 token through automated liquidity pools.
Uniswap: Uniswap is an automated fully decentralized token exchange on Ethereum.
💨 Margin Trading
dYdX: dYdX is a trading platform for crypto assets, built with open-source protocols, enabling decentralized margin trading.
Margin DDEX: DDEX is an advanced decentralized margin exchange. Users can create leveraged margin positions and earn interest through decentralized lending pools.
Perpetual Protocol: Perpetual Protocol is a decentralized perpetual contract protocol with virtual AMMs to provide guaranteed liquidity.
💨 DeFi Infrastructure & Dev Tooling
0x: 0x Protocol is free, open-source infrastructure that developers and businesses utilize to build products that enable the purchasing and trading of crypto tokens.
Alchemy: Alchemy is an infrastructure provider for web3 developers interacting with Ethereum blockchain.
Chainlink: Chainlink is a decentralized oracle that can provide external data to smart contracts.
Loopring: A protocol for decentralized token exchange, where traders have complete and total control of their crypto-assets.
MoonPay: MoonPay is a fiat on-ramp that enables web and mobile developers to let their users purchase virtual currencies using credit cards.
The Graph: The Graph is a decentralized protocol for indexing and querying data from blockchains.
Uma: UMA is a decentralized financial contracts platform built to enable Universal Market Access.
Zap: Zap platform allows users to create, publish and subscribe to smart contract and Decentralized Application compatible data feeds.
💨 Decentralized Insurance
InsurAce Protocol: InsurAce is a multi-chain protocol that provides insurance services to DeFi users, allowing them to protect their investment funds against various risks.
Nexus Mutual: Secure risk and potential bugs in smart contract code. Be covered for events like The DAO hack or Parity multi-sig wallet issues.
Opium Insurance: Opium Insurance offers a tradable, tokenized insurance position against smart-contract hacking or against stablecoin default.
💨 Asset Tokenization
OpenFinance: OpenFinance Network is a U.S. regulated trading platform for digital alternative assets.
Polymath Network: A platform for the creation of tokenized securities.
Securitize: The compliance platform for digitizing securities on the blockchain.
Templum: Templum provides a regulated, end-to-end solution for raising capital and secondary trading in the private market.
Tokensoft: TokenSoft enables issuers, financial institutions, broker-dealers, real estate companies, and funds to meet compliance requirements for digital securities on the blockchain at issuance, distribution, and transfer.
💨 Decentralized Lending
Aave: Aave is an Open Source and Non-Custodial protocol that lets you earn interest on deposits & borrow assets on multiple chains.
Compound: Compound is an open-source, autonomous protocol built for developers, enabling algorithmic, efficient money markets on Ethereum.
Cream Finance: C.R.E.A.M. is a crypto lending and borrowing dApp based on the Compound protocol with altered pools assets and own governance token.
Liquity: Liquity is a decentralized borrowing protocol that allows you to draw interest-free loans against Ether used as collateral.
💨 Prediction Markets
Augur: Augur is a decentralized oracle and peer to peer protocol for prediction markets.
Gnosis: Gnosis is an open platform for creating prediction market applications on the Ethereum protocol.
Polymarket: Polymarket is an information markets platform, where you can bet on the highly-debated topics and earn for being right.
Ampleforth: AMPL is a USD soft-pegged digital currency that adjusts supply daily based on market conditions.
DAI: DAI is a crypto-backed stablecoin soft-pegged to USD, built on Ethereum and governed by the MakerDAO system.
Frax: Frax is the first fractional-algorithmic stablecoin protocol.
USD Coin: USDC is a USD-backed stablecoin as an ERC20 token.
NFTs are tokens that we can use to represent ownership of unique items. They let us tokenize things like art, collectibles, even real estate. Ownership of an asset is secured by the Ethereum blockchain — no one can modify the record of ownership or copy/paste a new NFT into existence. NFT stands for non-fungible token. Non-fungible is an economic term that people could use to describe things like their furniture, a song file, or their computer. These things are not interchangeable for other items because they have unique properties.
Listed below are NFT-related projects built on Ethereum：
Gem: Gem.xyz is an NFT Aggregator. You can buy multiple NFTs(aka sweep floor) using Gem Web 3 shopping cart, pay with any token and save up to 39% on gas fees.
Knownorigin: KnownOrigin lets you discover, showcase & buy digital artwork + NFT collectibles.
LooksRare: LooksRare is the community-first NFT marketplace that actively rewards traders, collectors and creators for participating.
NFTKEY: NFTKEY is a decentralized NFT marketplace that allows Ethereum and Binance Smart Chain NFTs to be listed, bid on, bought and sold without any centralized servers.
OpenSea: OpenSea is a peer to peer marketplace for NFT collectibles.
Rarible: Rarible allows you to create and sell NFT collectibles at digital art marketplace.
X: X is a community-owned, cross-chain NFT marketplace. X enables users to collect, create and sell NFTs across multiple blockchains on the decentralized marketplace.
Ethereum-based DAO Ecosystem
A DAO is a collectively-owned, blockchain-governed organization working towards a shared mission. DAOs allow people to work with like-minded folks around the globe without trusting a benevolent leader to manage the funds or operations. There is no CEO who can spend funds on a whim or CFO who can manipulate the books. Instead, blockchain-based rules baked into the code define how the organization works and how funds are spent.
DAO Organizations have built-in treasuries that no one has the authority to access without the approval of the group. Decisions are governed by proposals and voting to ensure everyone in the organization has a voice, and everything happens transparently on-chain. If you want to know why Ethereum is the perfect foundation for DAOs, please click here for reasons.
The following are several examples of Ethereum-based DAO Platforms:
Aragon: Aragon allows you to create global, bureaucracy-free companies and freely organize and collaborate without borders or intermediaries.
Boardroom: Boardroom is a simple interface to engage, signal, and vote on protocol decisions with an integrated governance management platform improving distributed decision making.
Colony: Colony is a suite of smart contracts, providing a general purpose framework for the essential functions organizations require, such as ownership, structure, authority, and financial management.
DAOStack: DAOStack is an open source project advancing the technology and adoption of decentralized governance.
DXdao: The DXdao is a decentralized organization that develops, governs, and grows DeFi protocols and products, owned and operated by the community.
Daohaus: Daohaus is a DAO Explorer with an interface enabling joining existing DAOs, as well as creating new Moloch-like DAOs.
Snapshot: Snapshot is an off-chain, gasless, multi-governance community polling dashboard.
Tally: Tally is a voting dashboard, aggregating data from defi protocols’ governance and providing it in real-time for research and analysis.
KYC & Identity Ecosystem
Each company has to verify people’s identity somehow, and it’s particularly important for financial institutions. From this ‘know the customer,’ or KYC protocols was the rise to assist companies to ensure they know who they’re doing business with. Typically, this involves an extended, drawn-out practice where certain documents are shown, and a few kinds of background checks or verification takes place.
In the traditional KYC system, each bank will conduct its identity check i.e. each user is checked individually by an individual organization or government structure. Hence, there is a waste of time for checking each identity from scratch. The blockchain architecture and the DLT allow us to collect information from various service providers into one cryptographically secure and unchanging database that does not need a third party to verify the authenticity of the knowledge. It makes it possible to form a system where the user will only need to undergo the KYC procedure once to verify his/her identity.
The process is as follows:
- For KYC procedure a user submits documents to one of the banks where he wants to take a loan or use another service.
- Individual participants are responsible for collecting personal data(banks, government agencies, companies, or users themselves) and stored in a decentralized network.
- The bank checks and confirms the passage of KYC if everything is normal.
- The bank is responsible for entering the data about the user into the blockchain platform, to which other banks, organizations and state structures have access. All parties can control and regulate the KYC process. The system will monitor changes and updating of the user data, and if someone breaks the rules, it will become known to all parties.
- When a user wants to use the services of another bank, this second bank accesses the system and thus confirms the user’s identity.
- The access to user data will be based solely on its consent. The user must log in with cryptocurrency transactions i.e. use the private key to initiate the information exchange operation.
Below are a few examples of KYC and Identity related projects on Ethereum：
3Box: 3Box is a next-generation framework for managing user data on the internet.
Blockpass: Blockpass is a blockchain based self-sovereign identity protocol for the connected world. Blockpass offers shared regulatory compliance services for humans, companies, objects and devices.
Bloom: Bloom is a blockchain solution for secure identity and credit scoring.
BrightID: BrightID allows people to prove to applications that they’re only using one account.
Colendi: Colendi is a blockchain based credibility evaluation and global identity for the sharing economy.
Hydro: Hydro enables new and existing private systems to seamlessly integrate and leverage the immutable and transparent dynamics of a public blockchain, to enhance application and document security, identity management, and transactions.
Identity.com: Identity.com is an open source ecosystem providing access to on-demand, secure identity verification.
SelfKey: SelfKey is building a blockchain-based identity system that allows identity owners to truly own, control and manage their digital identity.
Payments Solutions and Service Providers Ecosystem
Payments is an area of finance for which blockchain technology is ideally suited — tracking and verifying account payables/receivables, using smart contracts to automate processes and remove third parties, whilst also practically eliminating duplications and errors. Essentially, blockchain provides immutable verification that the transaction has taken place and confirmed by each party. For merchants and banks, the technology makes it safer, quicker and cheaper whilst leveraging the best elements of existing systems and processes and upgrading areas where step change improvements can be made. With distributed, immutable features providing improved privacy, accuracy and security, it would be difficult to find a use case in financial services that would not benefit from adopting blockchain. Banking, lending, insurance, trade finance and asset management would all benefit from using the technology.
However, so far there still exist some problems waiting to be fixed, like significantly high transactions per second (TPS) speed, privacy & safety and adherence to regulatory frameworks. The following projects are attempting to solve these problems for blockchain payments：
Celer Network: Celer Network is a layer-2 scaling platform that enables fast and secure off-chain transactions for not only payment transactions, but also generalized off-chain smart contracts.
Connext: Connext enables users to batch many Ethereum transactions into one netted transfer by using signed off-blockchain commitments rather than direct on-blockchain transactions.
Matic (Polygon): Matic Network is a blockchain scalability platform which provides secure, scalable and instant transactions powered by PoS side chains and an adapted version of Plasma.
Request: Request is a decentralized network built on top of Ethereum, which allows anyone, anywhere to request, validate and execute payments.
Sablier: Sablier is the protocol for real-time finance on Ethereum, that enables continuous, autonomous and trustless payroll.
zkSync: zkSync is a trustless protocol for scalable low-cost payments on Ethereum, powered by zkRollup technology.
In this article, BlockPower has introduced the different powerful ecosystems of Ethereum. And in the next article, we will introduce the $ETH Economic Model. Don’t forget to follow us to get more information.
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