Read about five under-the-radar protocols expected to change the on-chain game.
DeFi continues to defy expectations while refusing to be written off. In 2023, decentralized finance has spawned new use cases while entering new ecosystems and chains. The kind of rationale that emerged for lending, borrowing, trading and revenue generation in the early 2020s has undergone a reshaping.
The “exchange of token A for token B via a single liquidity pool” model popularized by Uniswap has evolved beyond recognition: the upcoming Uni v4 is almost indistinguishable from its predecessors. While the core of what DeFi does, namely supporting non-custodial transactions for on-chain assets, has not changed, the products available to consumers and enterprise users have not changed. Today’s DeFi protocols are miles ahead of the first wave that paved the way. Here are five little-known protocols that are reinventing the on-chain game.
dolomite
Dolomite is a DeFi money market that enables trustworthy lending and borrowing, but when you pop the hood, you’ll find that there’s a lot more going on. Dolomite was developed to harness idle capital. The main goal of Dolomite is to maximize DeFi yields in a safe and transparent way.
Key features developed by Dolomite include loans secured by over-collateralization coupled with domestic asset support. In particular, the latter function ensures that the tokens used for staking retain their inherent functionality, e.g. B. voting rights, even if they remain blocked in the Dolomite ecosystem in order to generate income.
The ultimate vision for Dolomite is to become an inclusive DeFi hub serving as a central platform for various protocols, yield aggregators, DAOs, market makers and hedge funds. This will enable fund managers to competently manage their holdings and implement bespoke on-chain strategies.
airport financing
Aerodrome isn’t the first DEX to launch on Base, but it is the first specifically designed for Base. Developed by the Velocore team, Aerodrome is a sleek, feature-rich, and capital-efficient AMM that incorporates elements of Curve, Convex, and Uni v2. It leverages the weight and meter system that played a crucial role in the last DeFi wave, using the AERO token to reward LPs and veAERO for governance.
Anyone can create a liquidity pool on base with Aerodrome and veAERO holders can vote on whether to receive incentives. Liquidity pools are divided into stable, volatile, and low TVL pools, allowing users to differentiate between them and the right pool for their needs. With a UX to rival any DEX on any chain, Aerodrome on Base flies the flag of innovation.
Secured financing
Talk of Real-World Assets (RWAs) is ubiquitous these days as blockchains are “discovering” a new use case that has the potential to boost TVL, engage enterprises, and demonstrate the versatility of Web3. There is a lot of excitement in the RWA sector right now, but one project that has a proven ability to cut through and deliver tangible results is Backed. It offers an ingenious solution to earning returns from stablecoins while gaining exposure to RWAs.
Government bonds, stocks and ETFs are available, each backed 1:1 by the underlying asset. These tokens can be used across the DeFi ecosystem, freeing up protocols to create original ways to use these assets. With an AUM in excess of $48 million, Backed is growing steadily while demonstrating that it is possible to offer compliant financial products without impacting DeFi’s composability.
Gnoswap
As mentioned at the outset, DEXes have come a long way since Uniswap paved the way for non-custodial token swaps – or EtherDelta if you want to go even further back to the origins of DEX trading. Gnoswap is an emerging exchange built for the Gnoland blockchain ecosystem, using a variant of the Go programming language, better known as Golang.
From a DeFi perspective, what is new about Gnoswap is its use of concentrated liquidity. By introducing the CLMM mechanism, Gnoswap allows liquidity providers to set a price range in which their liquidity becomes active, resulting in more competitive pricing and capital efficient swaps. The CLMM ensures that liquidity is fully utilized to maximize LP trading fees. Meanwhile, the DEX’s staking program offers LPs the opportunity to maximize the capital efficiency of their assets and own and manage the platform.
EquationDAO
Arbitrum has become home to on-chain criminals, with protocols like GMX, HMX, and GNS becoming synonymous with leveraged trading. EquationDAO, the latest up-and-coming player to enter, promises high-octane thrills in the form of 200x leverage paired with deep liquidity, allowing for on-chain trading of assets like BTC and ETH.
With its innovative BRMM model, Equation aims to offer traders and Liquidity Providers (LPs) up to 200x leverage. This model allows traders to build larger and unrestricted positions while improving capital efficiency for LPs. Slated to launch in September, Equation has garnered a lot of interest from criminal traders looking for ways to make bigger profits while preserving their capital.
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