During the Global Financial Crisis, Satoshi Nakamoto proposed a digital, ledger-based currency: Bitcoin. Now more than a decade later, it has become the pillar of a decentralized financial system that banks the unbanked. A central authority does not regulate the system; instead, an underlying algorithmic consensus runs the ecosystem – Blockchain. Blockchain is an immutable, digital ledger that stores the history of transactions in a block. The information is cryptographically stored, and all blocks are linked in a chain. Every time a transaction occurs, a copy of the blockchain is distributed to each participant’s ledger and verified by them.
DeFi has a lot going on – it has exploded over the last 24 months. It took the industry two months from its inception to jump from $1 billion TVL to $4.06 billion! The overall value of assets deposited in transactions is the Total Value Locked (TVL).
This emerging alternative financial infrastructure has attracted many. It is permissionless – that means one doesn’t need the permission of an authority to carry out a transaction or take out a loan. It is trustless, implying that the users do not have to trust a third party – transactions take place peer-to-peer. It thus returns maximum yield. DeFi is also identity-confidential. Users need not divulge any personal details or identity, unlike TradFi, where one’s identity and personal information are integral to carrying out transactions. DeFi’s permissionless, trustless, and identity-confidential nature replaces opaque, inefficient, and tedious TradFi practices. Its scope for development is tremendous.
Some say that what the internet did to information, decentralized finance will do to centralized finance. And they don’t say it without reason:
- According to DeFi Pulse, the total value locked in decentralized finance has increased by over 8x since July 2020!
- According to Dune Analytics, 4 million unique addresses use DeFi applications. That is a jump of over 40x in the last two years.
- Ethereum, with a market cap of $346 billion (which makes it the second-largest cryptocurrency), settled over $11.6 trillion in transactions – surpassing Visa, the second-largest payment processing company – in 2021.
- USDT, USDC, Binance USD, Terra USD, and Dai – the top five stablecoins – have a combined market cap of $170 billion.
Where does an industry that grew over 88x between 2020 and 2021 go from here?
DeFi’s whirlwind has been a sight to behold – it has successfully created a parallel financial system with a tidy sum of applications. In addition, the DeFi space is witnessing the creation of incredible creations – from new products and tokens to protocols, dApps, and platforms.
The innovativeness and originality of many of these projects substantiate the optimism about where DeFi is headed. Let’s have a look at few of these innovations.
Top DeFi Apps 2022:
- Brew Money
One such innovation is Brew.money – a polygon wallet built on top of blue-chip DeFi protocols like Aave, Curve, etc., that enables users to earn up to 8-10% APY through one click.
What’s innovative about it is that users don’t have to spend time researching & finding the protocol that may give the highest API. You only need to transfer fiat securely through Apple Pay. The app then converts the fiat into USDC and pool it into the highest APY generating protocol. Amazing, isn’t it?
It doesn’t end there. You can even see your money growing real-time on the app!
Test it out here: Brew.money
- DEX Screener
DEX Screener lets you track and chart your favorite DEX in real-time. It features more than 20+ chains including Ethereum, Binance smart chain, Polygon Avalanche, Fantom, Harmony, Cronos, Aurora, Moonriver, Metis, etc.
No need to run from one chart to the next, users can track it all in real-time on DEX Screener.
CoinMarketCal covers all events that help traders make better decisions. It is a calendar of all past and upcoming events in the crypto space – From launches, listings, and presales, to AMAs, Eth conferences, everything! Their website: coinmarketcal.com.
- Daily Defi
No need to be confused doing the maths when calculating impermanent loss in DeFi anymore. Just enter your value in this impermanent loss calculator and get the results asap.
For detailed, on-time on-chain metrics, try Glassnode. The updated data at glassnode is available per month, day, week, hour, and 10 minutes. It supports Ethereum, Binance, Bitfinex, Bithumb, Bittrex, Cobinhood, Coinex, Gemini, and more.
A fun tool to visualize transactions on the Ethereum/Bitcoin network.
L2BEAT is an analytics and research website about Ethereum layer two (L2) scaling. It provides a comparison of the various Ethereum L2 systems available today. Check out at l2beat.com
DeFiLlama is the most popular tool to track metrics for different chains and protocols in DeFi. Its NFT site is used to track metrics & data for NFTs.
These are a few innovative and useful apps making rounds in the DeFi space lately.