Connect with us

Crypto Mining

Top Lending & Borrowing Protocols To Keep An Eye Out For In 2022

Published

on

livine sanchez

Decentralized finance (DeFi) is one of the hottest trends to arise from the crypto market. It has disrupted traditional financial models, opening the door to a diverse range of financial services that were otherwise inaccessible to the majority of the global population.

DeFi enables anyone, anywhere, to lend and borrow crypto assets by removing centralized authorities. Over the last few years, the crypto market has been flooded with DeFi lending and borrowing platforms, serving as the newest financial enabler while resting atop blockchain technology’s security, transparency, and immutability infrastructure.

Even though Ethereum still dominates the DeFi ecosystem, the network’s gas costs and slow transaction speeds have spurred many new lending and borrowing protocols to build on competing networks. The introduction of new DeFi protocols on third-generation blockchain networks has created a fundamental breakthrough for the future of cryptocurrencies and global finance.

Keep reading to take a closer look at a few promising DeFi lending and borrowing protocols that have successfully cemented their position in the ever-expanding crypto market.

Aave

Built on Ethereum, Aave is one of the most prominent DeFi protocols. It is an open-source, decentralized, and non-custodial market protocol that offers lending and borrowing features. Initially known as ETHLend, the platform was rebranded to Aave in 2018.

Aave launched with a total value locked (TVL) of just $60,000 in ETH tokens in January 2020. Fast forward to the present, and the platform’s TVL stands at approximately $13.25 billion, spread across Avalanche, Ethereum, and Polygon pools. The Aave protocol is designed to serve the interests of both lenders and borrowers.

You can generate returns in the form of passive yields through liquidity provision by adding your tokens to the available pools. Alternatively, you can use the protocol to access both over-collateralized and under-collateralized loans. In addition to lending and borrowing, Aave also provides flash loans and a rate switching service that allows borrowers to choose between locked interest rates or floating rates for their loans.

MakerDAO

MakerDAO has established itself as one of the best DeFi lending platforms in today’s market. Powered by the platform’s native stablecoin DAI, MakerDAO is a full-fledged DAO (decentralized autonomous organization) on the Ethereum blockchain that allows users to open a vault and access DAI loans by using ETH or other cryptocurrencies as collateral.

MakerDAO is the first DeFi lending protocol to achieve mainstream adoption and tops the leaderboard as the largest DeFi dApp within the Ethereum ecosystem, with $16.53 billion in total value locked (TVL). The platform follows a different approach compared to other lending protocols. Using the built-in governance mechanism in the Maker Protocol to manage the generation of DAI tokens reduces the volatility of the DAI stablecoin through smart contracts.

Soda Protocol

Built on the Solana blockchain, Soda Protocol has positioned itself as a promising DeFi 2.0 lending and borrowing protocol. The platform leverages Solana’s blazing fast transaction speeds and ultra-low gas costs to deliver a DeFi lending protocol alongside the first-of-its-kind on-chain credit rating system.

Soda Protocol’s primary offerings are quite similar to that of other Ethereum-based protocols like Aave and Compound regarding lending and borrowing services. However, the platform stands apart from the rest with its support for other DeFi lending products like Easy Repay loans, Flash loans, and Flash Liquidation, among others. 

Unlike existing platforms, Soda Protocol doesn’t have any capping on position slots, thus giving users the freedom to lend and borrow multiple assets simultaneously. In addition, Soda Protocol also optimizes the interest rate model to provide users with more flexible rates across variable market conditions. 

The platform also opens a world of new opportunities for the DeFi ecosystem through its Sol ID Credit feature, the first-ever on-chain credit rating system that collects and analyzes different types of on-chain behavioral data to generate credit scores for individual users. Each rating is minted as an NFT and can be applied to various scenarios, including accessing loans from partner DeFi platforms, lower rates on new products and IDOs, governance, and much more.

Conclusion

DeFi has opened the doors to a diverse range of passive income opportunities. If you already own cryptocurrencies, it is an excellent idea to let them work for you instead of sitting idly in your wallet. You can provide liquidity to the pools you prefer and generate passive interest, all of which will ultimately help you expand your crypto portfolio’s reach. 

Continue Reading

Latest

Companies

Public Companies Hold A Combined $11.8 Billion Worth Of BTC On Their Balance Sheet – See The Leading Firms

Crypto Mining3 weeks ago

Aliyu Pokima Publicly traded companies went all-in on Bitcoin in 2021 led by Michael Saylor’s MicroStrategy.Other firms on the list...

Indian Regulator SEBI Wants Mutual Funds to Stay Away From Crypto Investments Until Legislation Is Finalized

Crypto Mining3 weeks ago

Kevin Helms The Securities and Exchange Board of India (SEBI) has reportedly asked mutual fund companies not to get involved...

XRP Creator Chris Larsen Proposes Strategy To Incentivize Bitcoin Miners To Move Away From Proof-of-Work

Crypto Mining1 month ago

Brenda Ngari XRP inventor and Ripple executive chairman Chris Larsen has unveiled a plan to entice miners of the flagship...

Iceland Refuses to Power New Bitcoin Farms Amid Electricity Shortages

Crypto Mining1 month ago

Lubomir Tassev Cryptocurrency mining is among several energy-intensive industries hurt by a power deficit in Iceland. The country’s main utility...

Public Bitcoin Miners Are Increasing Their BTC Treasuries

Crypto Mining2 months ago

Dylan LeClair And Sam Rule Publicly-traded bitcoin mining firms have been accumulating and holding bitcoin at an increasing rate.The below...

NASDAQ-Listed HIVE Blockchain to Expand Data Center in New Brunswick, Canada With 40 Megawatts Capacity

Crypto Mining3 months ago

Bitcoin.com PR HIVE Blockchain is set to expand its data center campus in New Brunswick, Canada with 40 megawatts capacity....

%d bloggers like this: