Its unique features also include flash loans, uncollateralized loans, unique collateral types, and rate switching.Īlso launched in 2017, Aave prices reached a peak in January 2018, followed by a long period of dip until it eventually spiked again last month. #3 AaveĪ decentralized, flexible, scalable, and non-custodial money market protocol, Aave allows users to borrow and lend a range of cryptocurrencies using varied or stable interest rates. Launched in 2017, the Compound cryptocurrency’s price touched $350.95 in June 2020. In other words, borrowers and lenders can lock their crypto-assets in the protocol, and the interest rates that they pay or receive on their assets depending on the demand and supply of each crypto-asset in the market. Therefore, this would allow users to exchange the time value of Ethereum assets. It is centered around enabling people to borrow and lend loans using DeFi systems and establishes money markets with algorithmically set interest rates based on supply and demand. #2 CompoundĬompound is a DeFi protocol built on Ethereum. It hit its highest price so far in July 2020 at $8.66. Since May 2019, ChainLink’s price trajectory has been on a fluctuating but upward climb. This makes tamper-proof and secure transactions practically possible via smart contracts. Launched in 2017, Chainlink, as the name suggests, solves what is called ‘the oracle problem,’ by providing a reliable connection to external data that is end-to-end secure. Executing any smart contract requires external data such as API or off-chain data may be required. But there is still a connectivity problem – smart contracts cannot access data on their own. We know the crucial role smart contracts play in DeFi systems. Let’s take a look at some of the most exciting DeFi projects to watch out for. Challenges such as interoperability, addressing market volatility, and accessing external data are being addressed, among many others. Multiple projects have come up – some that attempt to solve an existing challenge with the technology and some that seek to expand its applications. The attempts to recreate traditional financial instruments in a decentralized architecture have gathered much pace and enthusiasm. DeFi, short for Decentralized Finance, has been the subject of much excitement.
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