Avalanche (AVAX) originally set out to be the home of DeFi , and has hosted a number of projects that make the most of its faster, more efficient ecosystem. And the list is growing.
Avalanche is true to its name. With 364 projects launched in the last 14 months, the smart contracts platform for decentralized applications is taking its role as an ETH competitor seriously. As the PoS blockchain with the fastest speeds and the most validators, it is ideally positioned to serve its chosen niche as DeFi’s destination of choice.
In addition to faster speeds, users enjoy lower costs to deploy smart contracts (currently one-tenth of the costs on Ethereum). Avalanche Virtual Machines allow developers to launch customized blockchains. Users can transfer assets to and from Ethereum easily via the Avalanche Bridge.
The network is not resting on its laurels, but aggressively targeting growth in its ecosystem. It recently launched the fund Blizzard, with $200m to be allocated to projects in DeFi and NFTs . This followed close on the heels of Avalanche Rush, a similar initiative involving $180m to fund developers looking to launch projects on the platform.
On top of its observable growth, the sheer amount of energy behind the Avalanche protocol speaks to its future potential to shape the future of DeFi. In this article, we are going to look at the projects that are currently need-to-know.
DeFi is at its heart the attempt to recreate the traditional banking system using chain-based solutions, avoiding the endemic issues of waste and bureaucracy that tend to plague centralized institutions.
DeFi, therefore, covers a lot of different fields. The 58 apps classified as DeFi in the Avalanche Ecosystem consist of a combination of home-grown applications and integrations of existing solutions ( Aave , Curve ).
Below, we examine some of the leading DeFi applications developed on and for the Avalanche network. Many of them are an answer to the question, “What would [insert name of well-known dApp] look like if it was faster and cheaper to use?”
Naturally, there are also genuine innovations that add to the existing DeFi universe. Fund-raising
One of the first ways in which DeFi revolutionized finance was the methods by which new projects raise money. The ICO boom of 2017 was one of the first major DeFi experiments, and it certainly delivered some important data. How projects are vetted and nurtured is fundamental to the future of DeFi. Avalaunch (XAVA)
“Welcome to the future of fundraising”
Avalaunch is the Avalanche network’s native solution for helping new projects launch and build communities. It is essentially an Initial DEX Offering (IDO) platform that aims to fix the common problems with decentralized funding, from basics such as pricing and speed to user experience.
While not a new concept, it brings an additional layer of ease and reliability to the wild west of decentralized listing. Listing on a typical platform can require a certain level of patience and expertise. A natural step in the evolution of any new technology is that processes require less effort and encounter fewer bugs.
If this seems like a small innovation, remember that it is how Apple in its golden age made everything it touched into a mass-adopted technology, without having to cut prices.
In a blog post earlier this year, the company expressed a more inclusive approach to non-native Avalanche projects. On the basis that the future is multi-chain, they assert, “a good team with a strong vision, regardless of their current chain of choice, is absolutely worth our time and attention”. Lending & Borrowing
If Bitcoin laid the foundation of decentralized finance by introducing permissionless payments, pioneers such as Aave and Compound laid another by solving the problem of how to decentralize borrowing. Avalanche’s own solution is in turn an important step in its work to move the DeFi field beyond the constraints of Ethereum. Benqi (QI)
“Liquidity Unlocked”
Currently one of the hottest projects on the network, Benqi is a decentralized, non-custodial borrowing and lending protocol . In practical terms, it offers users the core functionality of a bank: users can borrow and lend digital assets (WETH.e, WBTC.e, USDT.e, etc.), and earn interest. As it also operates as a bridge to Ethereum, users of the latter can escape the limitations of the Ethereum network.
There are plans to add liquidity staking and to launch an additional DeFi primitive to enhance the range of DeFi strategies open to Avalanche users. Also on the roadmap are a series of subnets (similar to parachains) that will allow institutions to build networks without the limitations […]
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