- \n
- The Ethereum-based DeFi ecosystem is developing rapidly, attracting developers and venture funding.<\/li>\n
- The largest share of the segment is held by exchanges and liquidity providers\u2014roughly 22%. Asset-management services account for about 19% of the market.<\/li>\n
- According to The Block<\/a>, the DeFi ecosystem comprises at least 166 startups and protocols operating across 12 areas.<\/li>\n<\/ul>\n<\/div>\n
<\/p>\n
New projects appear in DeFi almost every day. Some offer interesting solutions that attract investment and liquidity to protocols. Other projects are nothing more than imitators<\/a>, chasing fleeting hype. Some are even created merely to misappropriate user funds<\/a> and disappear.<\/p>\n
\n
\u00abThe number of scams, frauds and hacks in the cryptocurrency market has always been astronomically high compared with other industries. I cannot say that there are more of them in DeFi than the market average,\u00bb said Nikita Ovchinnikov, Head of Business Development at 1inch. \u00abThe true leaders of this segment became interested, believed and started building products as early as 2018. Projects such as Compound, Synthetix and others did not enter the market for hype and quick money.\u00bb<\/p>\n<\/blockquote>\n
Some industry figures are clearly not enamoured with the DeFi fever. Renowned trader Ton Veis \u043e\u0442\u043e\u0436\u0434\u0435\u0441\u0442\u0432\u043b\u044f\u0435\u0442<\/span> DeFi projects with Ponzi schemes. What is happening in the market reminds him of the ICO boom.<\/p>\n
Despite the sceptics\u2019 views, sizable sums are flowing into the segment\u2019s development. For example, Binance will allocate $100 million to support the DeFi ecosystem and ensure its interaction with centralized services.<\/p>\n
Developers are trying to turn almost every traditional financial service into a decentralized protocol, whether trading, lending or derivatives. In the last six months, at least 17 DeFi projects attracted venture funding.<\/p>\n
\n![\"DEX,](\"https:\/\/forklog.com\/wp-content\/uploads\/1-314.png\")
Main segments of the DeFi ecosystem. Source: The Block.<\/figcaption><\/figure>\n<\/div>\n \n
\u00abThe uniqueness of DeFi lies in the all-encompassing interconnection between protocols, parts of which can be assembled like Lego bricks into something new. Rising liquidity or more funds locked in one product creates feedback loops and increases the value of the entire market. The higher the trading volume on DEXs, the more money liquidity providers earn. The more they earn, the more liquidity flows into the market. Increased liquidity leads to smaller spreads, more users and higher trading volumes, returning us to the start of the chain,\u00bb noted Nikita Ovchinnikov.<\/p>\n<\/blockquote>\n
Almost half of the sector\u2019s startups are based in the United States. Other popular jurisdictions include the United Kingdom, the European Union and Singapore.<\/p>\n
\n![\"DEX,](\"https:\/\/forklog.com\/wp-content\/uploads\/HQ.png\")
Source: The Block<\/a>.<\/figcaption><\/figure>\n<\/div>\n The Block counted 166 companies and protocols that fall under Ethereum DeFi. The largest share in the sector is taken by the category \u201cExchanges and liquidity providers\u201d \u2014 22%. Decentralized asset-management services account for about 19% of the market.<\/p>\n
The category \u201cExchanges and liquidity providers\u201d covers decentralized trading venues and liquidity aggregators. The latter source liquidity from the exchanges themselves to generate the best possible price execution.<\/p>\n
Ovchinnikov is convinced that DEXs are gradually displacing centralized exchanges. The latter are studying various aspects of decentralized solutions and listing DeFi tokens.<\/p>\n
\n
\u00abIn 2017\u20132018, DEX trading mainly involved second-tier tokens, and market professionals did not expect significant breakthroughs for a host of reasons. But everything changed when top projects set the trend for listings on Uniswap, Balancer and other similar platforms. Traders could not buy hot assets on familiar venues, and tokens rose rapidly, attracting a huge user base,\u00bb shared the observer.<\/p>\n<\/blockquote>\n
The \u201cAsset Management\u201d category can be split into wallets and other services that let users store digital assets and access a wide range of decentralized applications. Other services in this category offer automatic rebalancing of assets according to specific trading strategies, or attempts to maximise returns from funds invested in various protocols.<\/p>\n
DeFi ecosystem projects operate along 12 core directions:<\/p>\n
- \n
- prediction markets;<\/li>\n
- decentralized autonomous organisations (DAOs);<\/li>\n
- lending;<\/li>\n
- asset management;<\/li>\n
- derivatives;<\/li>\n
- insurance;<\/li>\n
- exchanges and liquidity providers;<\/li>\n
- stablecoins;<\/li>\n
- banking and payments;<\/li>\n
- infrastructure;<\/li>\n
- marketplaces;<\/li>\n
- tokenisation of bitcoins.<\/li>\n<\/ul>\n\n
![\"DEX,](\"https:\/\/forklog.com\/wp-content\/uploads\/2_.png\")
Main sectors and projects of the DeFi ecosystem. Source: The Block.<\/figcaption><\/figure>\n<\/div>\n In October 2018, analysts counted 64 companies participating in the Ethereum-based DeFi ecosystem. Since then, the number of such startups and protocols has grown by 159%.<\/p>\n
\n![\"DEX,](\"https:\/\/forklog.com\/wp-content\/uploads\/3-181.png\")
Most prominent DeFi projects in 2018 and 2020.<\/figcaption><\/figure>\n<\/div>\n Asset Management<\/h2>\n
\n![\"DEX,](\"https:\/\/forklog.com\/wp-content\/uploads\/Asset-1.png\")
<\/figure>\n<\/div>\nAlphaWallet<\/a> \u2014 a mobile Ethereum wallet.<\/p>\n
Argent<\/a> \u2014 a non-custodial wallet for Ethereum and ERC-20 tokens, supporting smart contracts.<\/p>\n
Authereum<\/a> \u2014 a platform that gives users access to various DApps.<\/p>\n
Cobo wallet<\/a> \u2014 a Beijing-based multi-currency platform and DApp store with asset-holding and management features.<\/p>\n
Coinbase Wallet<\/a> \u2014 a wallet and browser for DApps.<\/p>\n
DeFi Saver<\/a> \u2014 an app enabling users to manage assets via various DApps.<\/p>\n
Dexwallet<\/a> \u2014 a mobile crypto wallet that natively supports DeFi apps.<\/p>\n
Dharma<\/a> \u2014 a non-custodial wallet with access to lending protocols and a simple interface for trading on DEXs like Uniswap.<\/p>\n
Eidoo<\/a> \u2014 a Switzerland-based multi-currency DeFi platform that helps users manage their assets.<\/p>\n
Enjin<\/a> \u2014 a blockchain wallet and game development platform.<\/p>\n
Frontier Wallet<\/a> \u2014 a wallet and interface for managing funds across DeFi protocols.<\/p>\n
Gnosis Safe<\/a> \u2014 a non-custodial Ethereum wallet with smart-contract support.<\/p>\n
Huobi Wallet<\/a> \u2014 a multi-currency wallet with staking and a DApp browser, developed by Huobi Group.<\/p>\n
imToken<\/a> \u2014 a non-custodial crypto wallet and DApps browser supporting asset management.<\/p>\n
InstaDapp<\/a> \u2014 a contract-enabled wallet enabling asset management via decentralized applications.<\/p>\n
Magic (Fortmatic)<\/a> \u2014 a non-custodial service for managing user private keys used for authentication and DApps transactions.<\/p>\n
Melon Protocol<\/a> \u2014 an Ethereum-based protocol for on-chain asset management.<\/p>\n
MetaMask<\/a> \u2014 a browser extension and mobile wallet that provides access to Ethereum applications.<\/p>\n
MyCrypto<\/a> \u2014 a user interface to store, send and receive crypto assets.<\/p>\n
MyEtherWallet<\/a> \u2014 a service that lets you create Ethereum wallets, interact with smart contracts, and manage ERC-20 tokens.<\/p>\n
Outlet Finance<\/a> \u2014 a service that creates a savings-like account earning interest from various lending protocols.<\/p>\n
Pillar<\/a> \u2014 an open-source crypto wallet. Through its interface, users can interact directly with Web3 platforms.<\/p>\n
Portis<\/a> \u2014 a non-custodial blockchain wallet.<\/p>\n
Rainbow<\/a> \u2014 a non-custodial wallet for Ethereum assets.<\/p>\n
TokenSets<\/a> \u2014 automated crypto-asset management strategies.<\/p>\n
Torus Labs<\/a> \u2014 a Web3 browser and wallet for digital assets, offering non-custodial key management.<\/p>\n
Trust Wallet<\/a> \u2014 a multi-currency wallet enabling storage of BEP2, ERC-20 and ERC-721 tokens.<\/p>\n
Yearn Finance<\/a> \u2014 an Ethereum yield-aggregating protocol. Users can deposit assets that are then allocated to DeFi lending and liquidity pools with the highest yields.<\/p>\n
Zapper<\/a> \u2014 a DeFi dashboard that also lets users invest in Uniswap, Curve and Balancer pools.<\/p>\n
Zengo<\/a> \u2014 a non-custodial crypto wallet. Instead of a seed phrase, facial recognition is used to access funds.<\/p>\n
Banking and Payments<\/h2>\n
\n![\"DEX,](\"https:\/\/forklog.com\/wp-content\/uploads\/Banking_Payments.png\")
<\/figure>\n<\/div>\nConnext<\/a> \u2014 a P2P payments infrastructure.<\/p>\n
Gilded<\/a> \u2014 a platform for invoicing, payments and accounting.<\/p>\n
Groundhog<\/a> opens up the possibility for companies to manage subscriptions with recurring payments in digital assets.<\/p>\n
Hydrogen Platform<\/a> \u2014 a multifunctional fintech platform providing APIs for a range of financial products.<\/p>\n
Juno<\/a> \u2014 an Ethereum-based banking platform offering debit cards and relatively high-interest savings.<\/p>\n
Monolith<\/a> \u2014 a wallet and issuer of a crypto debit card.<\/p>\n
Mosendo<\/a> \u2014 a payments app enabling users to send each other DAI stablecoins.<\/p>\n
Ramp Network<\/a> \u2014 a payments gateway allowing users to use bank accounts and cards to easily buy Ethereum and DAI stablecoin.<\/p>\n
Request Network<\/a> \u2014 a P2P payments system.<\/p>\n
StablePay<\/a> \u2014 converts payments and tips into ERC-20 tokens into DAI to avoid volatility risks.<\/p>\n
Whisp<\/a> \u2014 an automated payroll service.<\/p>\n
xDai<\/a> \u2014 a low-fee stablecoin payments system built on the xDai network.<\/p>\n
Lending<\/h2>\n
\n![\"DEX,](\"https:\/\/forklog.com\/wp-content\/uploads\/Lending.png\")
<\/figure>\n<\/div>\nAave<\/a> \u2014 a protocol that lets users earn on deposits and borrow digital assets.<\/p>\n
Atomic Loans<\/a> \u2014 a service permitting borrowers to obtain funds with Bitcoin as collateral.<\/p>\n
Bella Protocol<\/a> \u2014 a suite of DeFi products including a \u201cone-click savings account,\u201d a lending protocol and a yield-farming automation tool.<\/p>\n
bZx<\/a> \u2014 a lending protocol on which the Fulcrum lending and trading platform and Torque fixed-rate loan service are built.<\/p>\n
Colendi<\/a> \u2014 decentralized credit scoring and microfinance.<\/p>\n
Compound<\/a> \u2014 an open-source Ethereum market protocol enabling users to borrow and deposit crypto assets. Read more about the project via the link.<\/p>\n
Cream.finance<\/a> \u2014 a Compound-based project that also supports lower- and mid-liquidity tokens.<\/p>\n
dForce<\/a> \u2014 a lending DeFi project from Asian developers.<\/p>\n
Kava<\/a> \u2014 a lending DeFi platform where users can earn interest on deposited crypto assets.<\/p>\n
Lendroid<\/a> \u2014 a non-custodial lending platform. Developers plan to add support for collectible assets.<\/p>\n
Linen App<\/a> \u2014 a wallet with access to lending DeFi protocols.<\/p>\n
Maker<\/a> \u2014 a decentralized lending platform. The central element is the Collateralized Debt Positions (CDPs) \u2014 smart contracts that mint the DAI stablecoin.<\/p>\n
Maple Finance<\/a> \u2014 an integrated application with Compound, enabling users to invest in collateralised crypto-backed bonds.<\/p>\n
Pool Together<\/a> \u2014 an Ethereum app that pools user funds. Interest accrues on these assets, and once a week a distribution of accrued interest is drawn among participants.<\/p>\n
Teller<\/a> \u2014 a DeFi protocol offering unsecured loans. A borrower rating is built from banking and other data, and loan terms are set accordingly.<\/p>\n
Union Protocol<\/a> \u2014 a service positioned as a debt union in the form of a DAO. Users place DAI in a common pool. Risk profiles and collateral factors are defined for participants. Funds from the pool are lent via the Compound protocol, and rewards are distributed among participants.<\/p>\n
DAOs<\/h2>\n
\n![\"DEX,](\"https:\/\/forklog.com\/wp-content\/uploads\/DAO.png\")
<\/figure>\n<\/div>\nAragon<\/a> \u2014 an open-source project enabling creation and governance of decentralized autonomous organisations and communities.<\/p>\n
Colony<\/a> \u2014 a blockchain platform for collaborative, community-based companies.<\/p>\n
Daohaus<\/a> \u2014 a platform where users can build and join various DAOs.<\/p>\n
DAOstack<\/a> \u2014 a framework for collective work and decentralized governance.<\/p>\n
DXDao<\/a> \u2014 a DAO that develops, grows and governs DeFi products.<\/p>\n
MetaCartel<\/a> \u2014 a decentralized autonomous organisation funding Ethereum apps.<\/p>\n
MolochDAO<\/a> \u2014 a DAO whose members vote on proposals for Ethereum development.<\/p>\n
PieDAO<\/a> \u2014 a DAO specialising in diverse asset diversification strategies.<\/p>\n
Derivatives<\/h2>\n
\n![\"DEX,](\"https:\/\/forklog.com\/wp-content\/uploads\/Derivatives.png\")
<\/figure>\n<\/div>\nACO<\/a> \u2014 a decentralized options protocol. Users can trade, issue and exercise call and put options.<\/p>\n
DerivaDEX<\/a> \u2014 a decentralized derivative exchange built on Ethereum. It offers leveraged trading and perpetual swaps on Bitcoin and Ethereum, with margin and contract execution settled in USDT.<\/p>\n
dYdX<\/a> \u2014 an open-source protocol supporting margin trading of derivatives and a lending function.<\/p>\n
Futureswap<\/a> \u2014 a decentralized futures exchange offering up to 20x leverage on perpetual swaps based on ERC-20 tokens.<\/p>\n
Hegic<\/a> \u2014 an on-chain options protocol on Ethereum.<\/p>\n
McDEX<\/a> \u2014 a non-custodial derivatives exchange.<\/p>\n
Opium Protocol<\/a> \u2014 a protocol for creating, executing and trading derivatives instruments.<\/p>\n
Opyn<\/a> \u2014 an Ethereum options platform enabling hedging for DeFi protocol risks.<\/p>\n
Perpetual Protocol<\/a> \u2014 a decentralized perpetual contracts protocol using a virtual automated market maker mechanism.<\/p>\n
Synthetix<\/a> \u2014 an Ethereum platform for trading synthetic assets.<\/p>\n
UMA<\/a> \u2014 a kind of constructor for financial contracts.<\/p>\n
Exchanges<\/h2>\n
\n![\"DEX,](\"https:\/\/forklog.com\/wp-content\/uploads\/Exchanges.png\")
<\/figure>\n<\/div>\n1inch.exchange<\/a> \u2014 a decentralized exchange aggregator. It splits a trading order among multiple non-custodial platforms to minimise slippage and ensure the best possible price for the user.<\/p>\n
Airswap<\/a> \u2014 a P2P platform for buying and selling assets on Ethereum.<\/p>\n
Atomex<\/a> \u2014 a crypto wallet with an integrated hybrid exchange supporting atomic swaps.<\/p>\n
Balancer<\/a> \u2014 an automated market maker protocol. Users can swap ERC20 tokens using the service\u2019s liquidity pools.<\/p>\n
Bamboo Relay<\/a> \u2014 a lending and trading service for ERC20 tokens built on the bzx and 0x protocols.<\/p>\n
Bancor<\/a> \u2014 a platform of decentralized liquidity pools enabling token exchange.<\/p>\n
Curve<\/a> \u2014 an automated market maker platform for trading stablecoins and \u201cBitcoin on Ethereum.\u201d<\/p>\n
DDEX<\/a> \u2014 a decentralized exchange with up to 5x leverage.<\/p>\n
DeversiFi<\/a> \u2014 a decentralized Ethereum platform supporting spot and margin trading.<\/p>\n
Dex.AG<\/a> \u2014 a decentralized exchange aggregator.<\/p>\n
dex.blue<\/a> \u2014 a trading platform integrated with Uniswap, Kyber and Oasis.<\/p>\n
Dolomite<\/a> \u2014 a decentralized exchange and portfolio-management service built on the Loopring protocol.<\/p>\n
Fairdex<\/a> \u2014 a decentralized platform using a Dutch auction system.<\/p>\n
ForkDelta<\/a> \u2014 a non-custodial exchange for Ethereum tokens.<\/p>\n
Fulcrum<\/a> \u2014 a crypto platform supporting margin trading and lending.<\/p>\n
Idex<\/a> \u2014 a non-custodial Ethereum exchange.<\/p>\n
JellySwap<\/a> \u2014 a P2P trading service supporting atomic swaps.<\/p>\n
KeeperDAO<\/a> \u2014 a \u201cunderwriter of on\u2011chain liquidity for DeFi.\u201d The platform enables arbitrage through management of liquidations and rebalancing within DeFi apps.<\/p>\n
Kyberswap<\/a> \u2014 a non-custodial trading platform for ERC-20 tokens.<\/p>\n
Liquality<\/a> \u2014 an atomic-swap protocol allowing Bitcoin and Ethereum holders to exchange assets trustlessly.<\/p>\n
LiquidSwap<\/a> \u2014 a liquidity aggregator from decentralized exchanges.<\/p>\n
Loopring<\/a> \u2014 a payments and DEX protocol with zkRollup technology.<\/p>\n
Matcha<\/a> \u2014 a trading platform that uses smart order routing.<\/p>\n
Mesa<\/a> \u2014 a Gnosis-based decentralized exchange.<\/p>\n
Mooniswap<\/a> \u2014 an automated market maker with a decentralized token exchange.<\/p>\n
Oasis<\/a> \u2014 a MakerDAO platform where users can borrow and deposit tokens and trade them.<\/p>\n
Orion Protocol<\/a> \u2014 a liquidity aggregator mixing DEX and centralized exchanges. Developers plan to build a lending product, price oracles and a decentralized high\u2011leverage trading platform.<\/p>\n
Paradex<\/a> \u2014 a non-custodial trading platform using 0x technology.<\/p>\n