The decentralized finance (DeFi) market was marked by two important records. First, the total amount allocated (TVL) across all protocols once again surpassed the US$ 200 billion barrier. Second, the Lido Finance (LDO) protocol has surpassed the $20 billion mark on its TVL. As a result, the protocol has surpassed Curve Finance (CRV) and is the leader among DeFi. According to the website Defi Llama, Lido is in a fierce dispute with Curve for leadership in this market. At the time of writing, Lido’s TVL is $19.4 billion, while Curve’s TVL is $19.2 billion.
Lido and Ethereum 2.0
Lido accounts for 9.28% of the total TVL across the DeFi industry. Launched in December 2020, the protocol offers staking on the following blockchains: Ethereum (ETH); Earth (MOON); Solana (SOL); Kusama (KSM); Polygon (MATIC). A considerable part of the growth of this protocol is due to the growth of the Ethereum consensus layer (formerly Ethereum 2.0). The long-awaited update has as its main novelty the change in Ethereum’s algorithm to Proof of Stake (PoS), allowing users to leave ETH in staking and receive income for it. In this sense, Lido Finance occupies a very privileged position. More than 30% of all ETH wagered on the Beacon Chain is done via Lido. That is, the protocol exerts a strong position within the future modality. Launched in December 2020, Lido has paid out $439 million in staking rewards to over 104,000 participants. Currently, the protocol offers yields of 3.6% on ETH and up to 25.9% on KSM.
Curve is a decentralized exchange (DEX) focused on trading stablecoins on Ethereum. Its great differential is that it uses an automated market maker (AMM) to manage liquidity. With the popularization of stablecoins, especially those that are decentralized, Curve has emerged as one of the biggest protocols in this sector. It operates on networks like ETH, AVAX, MATIC and others, which gives it a high degree of usability. Currently, Curve’s TVL is US$ 19.28 billion, which makes it fiercely dispute the position of dominant protocol with Lido.
The Anchor, or Anchor Protocol, is a lending protocol that provides liquidity to the Earth’s network. Its role is to broker stablecoin loans on Earth, especially from UST. Those who own stablecoins can leave them on Anchor and earn returns of up to 19.5% while avoiding market volatility. On the other hand, LUNA token holders can borrow stablecoins using them as payment guarantee. Through Anchor, users do not lose control or possession of their tokens. Because of the strong growth of Terra and also its stablecoin, Anchor followed the same path within DeFi. With a TVL of $17.33 billion, the token occupies the 3rd position.
Maker is one of the oldest protocols on this list. His idea was conceived in 2015, but the official launch took place only in December 2017. Therefore, the protocol is already part of the DeFi ecosystem even before the market has this name. This protocol consists of a decentralized organization (DAO) and a software platform, both based on the Ethereum blockchain. Within Maker, users can issue and manage DAI, a decentralized stablecoin with public and community auditable reserves. DAI is one of the top decentralized stablecoins out there on the market today. Due to its growth, Maker has already reached $13.46 billion and is the fourth largest DeFi protocol.
Finally, the last protocol on this list is directly linked to the second place. This is Convex Finance, a protocol aimed at Curve’s liquidity providers. In this protocol, Curve liquidity providers can earn a share of DEX trading fees without betting liquidity there. Instead, they can bet directly on Convex, which brings better efficiency in capital allocation. Since Curve is the world’s largest DEX in TVL, its growth directly impacts Convex’s success. This protocol currently has US$ 11.81 billion and ranks fifth among the largest DeFi networks. Also Read: The Illuvium: Land Sale Approaches Also Read: Whale Withdraws BRL 3 Billion Bitcoin From Coinbase, Flow To Spot ETF Increases Also Read: Veteran Trader Tone Vays Issues Alert On Bitcoin (BTC) Price