There are many DeFi projects that are flourishing this year. Excluding those that are still in the research phase, or pre-launch development, there are some that are already demonstrating their strength and potential.
To tell the truth, only a few DeFi projects have already been operating properly for a few years in the decentralized finance markets, while many more are emerging now as this sector is attracting an increasing number of users. But let’s look at the 7 DeFi projects that have grown the most in these first months of 2020, and are performing better this year.
One project that is doing great is Aave. It debuted in January of 2020, and in a few months it went from zero to 30 million dollars in locked assets. It is absolutely one of the DeFi projects that has suffered less from the collapse of March 13th, with the result that the increase in the value of locked assets has continued from January to April according to a steady upward trend.
This is an Ethereum-based protocol for decentralized lending. It is similar to Compound, although while in the first quarter of 2020 Compound has lost locked funds from €90 million to €80 million, Aave is taking slices of the market from other similar platforms and is now in fifth place overall in terms of locked funds volume according to DeFiPulse.
Aave uses the so-called aTokens, which are ERC20 tokens representing other assets which can be lent or borrowed. The peculiar feature is a fairly stable interest rate, which does not change often, as well as the possibility of obtaining non-collateralized flash loans with immediate repayment. With the implosion of bZx/Fulcrum, Aave is gaining ground and growing rapidly.
A similar trajectory is being followed by dForce, which has grown a lot during 2020. The project debuted in September 2019, and until December it hadn’t grown much. In January 2020, it registered a first surge, which led it to over $5 million in locked assets. Growth continued steadily in February, having almost reached $14 million in locked assets by mid-month.
It continued to grow in the following month, reaching almost 18 million on March 7th. On March 13th, it plummeted to 10 million, but recovered quickly as it reached a new high of over $21 million by the end of the month. To date it is in eighth place overall among the DeFi platforms in terms of locked assets.
dForce is an ecosystem of protocols that aims to be a comprehensive solution for DeFi. The first two protocols released are Lendf.Me and USDx. USDx is a stablecoin anchored to the US dollar, while Lendf.Me is a lending platform that supports USDx, USDT, DAI, USDC, PAX, TUSD, WETH, imBTC, HBTC and WBTC.
Another successful platform during these early months of 2020 is DDEX. This project was launched in August 2019, and by January 2020 it had grown slowly to about $1.5 million in locked assets. However, it was in February that it literally took off, reaching a peak of more than $4.2 million by mid-month. During the collapse of March 13th, it returned to just over 2 million, but at the beginning of April, it peaked again reaching a new high of almost $4.3 million in locked assets.
DDEX is a trading platform based on the Hydro protocol, which supports margin trading with leverage up to 5x for the ETH/DAI, ETH/USDT, ETH/USDC, WBTC/USDT and HBTC/USDT pairs. It also has a Pro mode for advanced trading and offers algorithmically set interest rates based on supply and demand. A percentage of the interest is locked into an insurance pool to avoid potential losses from lending.
A similar path is being taken by Set Protocol, a platform launched in April 2019 that until January 2020 had never exceeded $3 million in locked assets. In February, however, locked assets doubled in three weeks and then fell back below $4 million with the collapse of March 13th. At the beginning of April, however, they returned to almost 6 million.
The Set project is quite complex, as it offers users the possibility to create and trade Sets, which are ERC20 tokens representing a basket of underlying assets. Each Set is based on a strategy codified in its smart contract, allowing it to periodically rebalance its basket automatically. To date, it supports DAI, ETH, WBTC, USDC, cUSDC and LINK, and each set has its own criteria for rebalancing the balance of its asset portfolio.
Erasure is another project that is enjoying great success. Until January 20th, 2020 it had never exceeded $400,000 in locked assets, but then it enjoyed a very rapid first leap to over $700,000, a drop to $400,000 on March 13th, and then a new surge to nearly $1.2 million at the end of March.
It is a decentralized data marketplace for predictions, which allows users to create predictions by betting cryptocurrencies such as Numeraire (NMR) or DAI. Its success is probably also due to the difficulties that its competitor Augur is experiencing, which in mid-February had over $800,000 in locked assets and then plunged well below $300,000. Erasure has in fact recently outperformed Augur in terms of locked assets, and although it is not currently one of the main DeFi projects in the world, it is proving to have very interesting potential.
A platform that has existed for a long time (September 2018), and that is also performing well in this 2020 is dYdX. This platform actually reached its peak in November 2019, when it exceeded 31 million dollars, but in December it collapsed to 13.
However, by January 2020 it had already returned above 15 million, while on February 25th it reached 28 million. From then on it has dropped, but stabilized at 20 million. dYdX is a decentralized margin trading platform for experienced traders.
Lastly, WBTC deserves a mention, as it is a project that is bringing bitcoin to the Ethereum blockchain. The project was born in November 2018, but it reached its peak in 2020. After an initial success in mid-2019, when it reached almost $7 million in locked assets, it had dropped to just over 4 at the end of the year.
However, by January 2020 it had already returned above 5 million, and by February it had risen to over 8 million. In reality, it suffered a heavy collapse on March 13th, returning to just above 4 million, but it recovered nicely between the end of March and the beginning of April, returning above 7 million.
WBTC is nothing more than an ERC-20 token on the Ethereum blockchain representing BTC 1:1. However, it is currently the main protocol that allows the use of bitcoin in DeFi tools based on Ethereum, ranking tenth absolute among all DeFi projects in terms of volume of locked funds.
It is worth noting that, in this respect, it also outperforms Bitcoin’s Lightning Network, which ranks eleventh, just after WBTC.