Decentralised finance (DeFi) is a hot topic in crypto, as it hones in on one of the key elements of the space: decentralisation. If you still find it difficult to understand what exactly DeFi is, let us summarise before we continue.
DeFi aims to eliminate third-party intermediaries by allowing users and businesses to conduct financial transactions via peer-to-peer (P2P) financial networks. This emerging technology uses security protocols and software to record and secure these transactions on blockchains. Some of DeFi’s goals include increased access to financial services, reduced transaction time and costs, and transferring control of funds back to users.
In this article, we introduce five of the most popular DeFi projects on the Cronos network. It is the first blockchain network to interoperate with both the Ethereum and Cosmos ecosystems, supporting cryptocurrency trading, DeFi, NFTs, gaming, and the metaverse, giving users full access to all that is Web3.
The Crypto.com suite of products, including the App and DeFi Wallet, seamlessly bridge to the decentralised exchanges (DEXs), lending platforms and yield aggregators available on the Cronos ecosystem.
For an intro on how to set up a DeFi wallet and utilise different DeFi tools, read our DeFi guide for beginners.
Our top 5 DeFi Projects on the Cronos network, ranked by TVL (total value locked) are:
- VVS Finance (DEX)
- Tectonic (Lending Platform)
- Ferro (Stablecoin DEX)
- Mad Meerkat Finance (DEX)
- Beefy Finance (Yield Aggregator)
1. VVS Finance (DEX)
The VVS Finance protocol is the largest on the Cronos chain by total value locked (TVL). Its name stands for Very, Very Simple Finance. This DEX offers the most popular DeFi functions, including swaps, staking, and liquidity pools, in an easy-to-navigate user interface.
VVS Finance quickly gained popularity amongst crypto holders because of its signature traits:
- Reasonable trading volume between 5% and 20% of its market cap
- A substantial initial market cap that jumped to US$170 million within the first months of launch
Unfamiliar with DeFi jargon? Take a look at our article on 5 DeFi Terms You Should Know.
2. Tectonic (Lending Platform)
Tectonic is a non-custodial money market protocol based on algorithms that automate trades. Non-custodial means the user remains custodian of their funds. The project allows users to participate as liquidity suppliers or borrowers.
Suppliers provide liquidity to the market in hopes of passive income opportunities. Borrowers can borrow liquidity in an over-collateralised fashion (i.e., the funds locked in for a loan must exceed what is lent out), which appeals to those who expect the collateral to increase in value for the lock-in period.
This is complemented by an interest incentive program powered by TONIC, the native token of the Tectonic protocol.
The main benefits of the Tectonic project are:
- Users can borrow access to crypto assets without having to liquidate their original assets
- Certain cryptocurrencies can be borrowed by traders for short-term trading or yield farming
- ‘HODLers’ can generate additional returns from interest by supplying assets to the protocol without having to actively manage them
3. Ferro (Stablecoin DEX)
Ferro is a stable swap Automated Market Maker (AMM) protocol that focuses on providing efficient and safe trading for stablecoins and other pegged assets.
The protocol allows for swaps, staking, and liquidity pools comprising stablecoins. It advertises lower fees, lower slippage, and less risk of Impermanent Loss (IL) compared to trading more volatile crypto assets.
The most popular features of the Ferro protocol are:
- Liquidity Pools — liquidity supplied in exchange for liquidity provider (LP) tokens and a fee earn, proportionate to the contribution transaction
- Ferro Swap — supported tokens can be swapped with low fees and slippage
The Crypto.com DeFi Wallet has now integrated Ferro protocol so that users can stake stablecoins directly on DeFi Earn to receive rewards in FER, its native token. In other words, users don’t need to download and register with a separate decentralised app (dapp), but can interact with Ferro right in DeFi Wallet.
4. Mad Meerkat Finance (DEX)
Mad Meerkat, or MM Finance, is easily recognisable by its meerkat mascot. Currently, it’s one of the most popular DEXs and Automated Market Makers (AMMs) on Cronos, owed to its low trading fees (0.17%) and being the first to introduce Protocol Owned Liquidity (POL) within the Cronos ecosystem.
Users can generate tokens using MM Finance via yield farms and liquidity pools; in addition, users can also be rewarded with trading fees (0.10%) on all trades that go through their pair when they stake their tokens in liquidity pools.
When users make a token swap (trade) on MM Finance, they pay a 0.17% trading fee, a portion of which is used to buy back MMF and form POL. MM Finance states that “by allocating a big portion of our fees to buying back MMF and forming liquidity pools, we will be able to ensure that, as the platform scales in trading volume, it will help create deflationary pressure on MMF, resulting in a price increase over time.”
5. Beefy Finance (Yield Aggregator)
Beefy Finance (BIFI) is a decentralised multichain yield optimiser that bridges multiple blockchains and offers compound interest earning with higher annual percentage yields (APYs) than most other DeFi platforms. As a yield optimiser, Beefy Finance automatically optimises usage of its liquidity pools and AMM rewards through smart contracts.
The most popular feature of BIFI is the Vaults, where users can stake and withdraw crypto at any time. What makes the Beefy Finance Vaults so desirable is their investment strategy: for tokens deposited, compound yield is accrued in the form of reward tokens.
You can find all five DeFi Cronos protocols described above, as well as many more – including Aave Lending V2, Yearn Earn V2, and Compound Lending – in the DeFi browser of the Crypto.com DeFi Wallet.
The Crypto.com DeFi Wallet is a non-custodial wallet that lets users conveniently access all things DeFi in one place. Users can easily and securely manage 700+ tokens across 20+ blockchains, seamlessly swap tokens, earn token rewards, manage their NFTs, and connect with the most popular DApps in seconds.
For a beginner’s guide on how to use DeFi and the Cryto.com DeFi Wallet, see this article. Still confused about DeFi jargon? This list of 5 popular DeFi terms will bring clarity.
Finally, for an intro to Cronos, the ecosystem that hosts all of these DeFi projects, navigate to this introduction.
Due Diligence and Do Your Own Research
All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by Crypto.com to invest, buy, or sell any crypto assets. Returns on the buying and selling of crypto assets may be subject to tax, including capital gains tax, in your jurisdiction.
Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. When assessing a crypto asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.