DeFi Protocols

Across Protocol is an optimistic cross-chain bridge designed for capital efficiency and speed. It uses a system of relayers who front capital to enable fast bridging, with UMA's optimistic oracle verifying correctness. Across is known for some of the lowest bridge fees and fastest settlement times in the ecosystem.

Stargate Finance is a composable liquidity transport protocol built on LayerZero. It enables cross-chain token transfers with unified liquidity pools and instant guaranteed finality. Stargate's unified pools offer LPs exposure to bridging fees across all connected chains without having to deploy capital on each chain individually.

Wormhole is one of the most widely deployed cross-chain messaging and bridging protocols, connecting 30+ blockchains. Originally developed within the Solana ecosystem, Wormhole uses a network of 19 Guardians (validators) to verify cross-chain messages. The protocol suffered a $320M exploit in February 2022 (on Solana) but has since improved security with additional measures.

Ethena Labs creates USDe — a synthetic dollar backed by delta-neutral positions (staked ETH + short ETH perpetual futures). USDe earns yield from both staking rewards and positive funding rates on derivatives. This 'Internet Bond' concept offers significantly higher yields than traditional stablecoin models, though with different risk profiles.

Liquity is a decentralised borrowing protocol that issues LUSD stablecoin against ETH collateral with a one-time borrowing fee (no ongoing interest). Operating at a minimum 110% collateral ratio with a novel liquidation mechanism, Liquity is fully immutable — no governance, no admin keys. Liquity V2 introduces user-set interest rates and multi-collateral support.

Aerodrome is the leading DEX on Base (Coinbase's L2), forked from Velodrome on Optimism. It uses the ve(3,3) model where voters direct emissions to liquidity pools, creating flywheel incentives for deep liquidity. Aerodrome has captured the majority of Base's DEX volume and TVL since launch.

Balancer is a flexible AMM that supports multi-asset pools with customisable weightings (not just 50/50). This allows index-like funds, portfolio rebalancing, and innovative pool designs. Balancer V2 introduced a single vault architecture for capital efficiency. The protocol powers many of DeFi's most complex liquidity strategies.

Curve Finance specialises in low-slippage swaps between similarly priced assets — stablecoins (USDT/USDC/DAI), wrapped tokens (WBTC/renBTC), and liquid staking derivatives (stETH/ETH). Its StableSwap invariant formula is specifically designed for pegged assets, offering much tighter spreads than constant-product AMMs. The CRV wars and vote-escrow tokenomics (veCRV) created an influential governance and bribery meta-game across DeFi.

Orca is a user-friendly DEX on Solana known for its clean interface and concentrated liquidity pools (Whirlpools). It prioritises capital efficiency and ease of use over complexity. Orca has become one of the most-used DEXs on Solana by volume.

PancakeSwap is the dominant DEX on BNB Chain and has expanded to multiple chains. It offers AMM trading, concentrated liquidity (V3), yield farming, lotteries, NFTs, and prediction markets. As the gateway to BNB Chain DeFi, PancakeSwap processes billions in monthly trading volume with lower fees than Ethereum-native DEXs.

Raydium is Solana's leading AMM and liquidity provider, designed to leverage Solana's high-speed, low-cost infrastructure. It integrates with OpenBook's central limit order book (CLOB) for hybrid AMM+order book liquidity. Raydium's AcceleRaytor serves as a launchpad for new Solana projects.

Uniswap is the largest decentralised exchange by volume and the pioneer of the Automated Market Maker (AMM) model. Uniswap V3 introduced concentrated liquidity, allowing LPs to allocate capital within custom price ranges for dramatically improved capital efficiency. Uniswap V4 (upcoming) introduces hooks — plugins that allow developers to customise pool behaviour.

Velodrome is the native DEX of Optimism, using the ve(3,3) model pioneered by Solidly. Voters lock VELO as veVELO to direct liquidity emissions and earn protocol fees. It has become the liquidity infrastructure backbone of the Optimism ecosystem.

dYdX is the leading decentralised perpetual exchange by volume, having migrated from Ethereum (StarkEx L2) to its own sovereign Cosmos SDK chain in late 2023. The dYdX Chain features a fully decentralised order book, sub-second block times, and validator-operated matching. dYdX V4 represents a major step toward fully decentralised derivatives trading.

GMX is a decentralised perpetual exchange that allows users to trade BTC, ETH, and other assets with up to 100x leverage directly on-chain. GMX V2 introduced isolated pools, customisable fee structures, and improved risk management. Liquidity providers earn fees from all trading activity via the GLP/GM pool model.

Hyperliquid is a high-performance perpetual DEX operating on its own L1 blockchain. It offers CEX-like speed and UX with a fully on-chain order book. Known for extremely low latency, no gas fees for trading, and a wide selection of perpetual markets. Hyperliquid's HLP vault acts as the counterparty market-making entity.

Synthetix is a derivatives liquidity protocol that powers other front-end perp exchanges (like Kwenta). SNX stakers provide collateral backing for synthetic assets and perpetual futures. Synthetix V3 introduced a modular architecture with multi-collateral support. The protocol earns fees from all trading activity on platforms using its liquidity.

Nexus Mutual is a decentralised insurance protocol providing cover against smart contract failures, oracle failures, and custody losses. Members pool capital to back coverage, and claims are assessed through a decentralised governance process. As DeFi grows, protocol cover becomes increasingly critical risk management infrastructure.

Aave is the largest decentralised lending and borrowing protocol in DeFi. Users can supply assets to earn yield or borrow against their collateral. Aave V3 introduced efficiency mode (eMode), isolation mode for new assets, and cross-chain portals. Flash loans — uncollateralised loans repaid within a single transaction — were pioneered by Aave and remain one of DeFi's most innovative features.

Compound is a pioneering DeFi lending protocol that popularised the concept of algorithmic, autonomous interest rates. Compound V3 (Comet) simplified the protocol to single-borrowable-asset markets with improved risk management. The COMP token was one of the first governance tokens to be widely distributed through liquidity mining, helping launch the 'DeFi Summer' of 2020.

MakerDAO (rebranded to Sky in 2024) is the protocol behind DAI, one of the oldest and most widely used decentralised stablecoins. Users lock collateral (ETH, WBTC, real-world assets) in Maker Vaults to mint DAI. MakerDAO has been a cornerstone of DeFi since 2017, and its transition to the 'Endgame' plan envisions SubDAOs and increased real-world asset (RWA) integration.

Morpho is a lending protocol optimiser that sits on top of existing protocols like Aave and Compound, matching lenders and borrowers peer-to-peer to offer improved rates for both sides. Morpho Blue, its standalone lending primitive, allows permissionless market creation with customisable risk parameters and oracle choices.

Spark Protocol is a DeFi lending platform built as a SubDAO of MakerDAO/Sky. It enables direct borrowing of DAI at the DSR rate and lending/borrowing of major crypto assets. Spark leverages Maker's infrastructure while providing a user-friendly frontend and competitive rates.

EtherFi is a non-custodial liquid staking and restaking protocol. Users receive eETH, which can be used across DeFi. EtherFi uniquely allows stakers to control their validator keys, and it integrates natively with EigenLayer for restaking — earning both Ethereum staking rewards and additional restaking yields.

Jito is the leading liquid staking protocol on Solana, offering JitoSOL — a liquid staking token that accrues both staking rewards and MEV rewards. Jito's MEV infrastructure (Block Engine, Relayer) is used by the majority of Solana validators, making it a critical piece of Solana's MEV supply chain.

Lido is the largest liquid staking protocol, dominating Ethereum staking with over 28% of all staked ETH. Users stake ETH and receive stETH — a liquid staking token that accrues staking rewards daily and can be used across DeFi (lending, LPing, collateral). Lido's dominance has raised concerns about Ethereum's decentralisation, leading to internal discussions about self-limiting stake share.

Marinade Finance is a Solana liquid staking protocol that distributes stake across hundreds of validators optimised for performance and decentralisation. mSOL is used widely across Solana DeFi. Marinade also offers 'Native Staking' — a non-custodial option using Solana's native staking mechanism with similar validator selection benefits.

Rocket Pool is a decentralised Ethereum staking protocol designed to lower the barrier to running validators. Anyone with 8 ETH (mini-pool) plus an RPL bond can become a node operator. Its rETH token provides liquid staking with perhaps the most decentralised validator set of any liquid staking provider.

Chainlink is the dominant decentralised oracle network, providing off-chain data (price feeds, randomness, event data) to smart contracts across 20+ blockchains. Chainlink secures hundreds of billions in DeFi TVL through its price feeds. CCIP (Cross-Chain Interoperability Protocol) extends Chainlink's role to cross-chain messaging and token transfers.

Pyth Network is a first-party oracle that sources data directly from market makers, exchanges, and trading firms. Unlike Chainlink's third-party model, Pyth publishers are the original data producers. This enables sub-second update latency, making Pyth ideal for DeFi derivatives. Pyth's pull-based model has expanded to 40+ chains.

Centrifuge is a decentralised platform for financing real-world assets on-chain. It enables SMEs, real estate, and trade finance borrowers to access DeFi liquidity by tokenising invoices, real estate, and other assets as NFTs used as collateral. Centrifuge pools have been integrated with MakerDAO and Aave for RWA lending.

Ondo Finance bridges traditional finance and DeFi by tokenising US Treasury bills, bonds, and money market funds on-chain. USDY (USD Yield token) and OUSG (US Government Bond fund) give DeFi users access to real-world yield with institutional-grade compliance. Ondo is a leader in the rapidly growing RWA tokenisation sector.

EigenLayer introduces the concept of restaking — allowing ETH stakers to rehypothecate their staked ETH to secure additional services (Actively Validated Services or AVSs). This extends Ethereum's security to new protocols (bridges, oracles, DA layers) while providing restakers with additional yield. EigenLayer is one of the most significant DeFi innovations of 2023-2024.

Symbiotic is a restaking protocol backed by Paradigm and Lido founders. It takes a more modular, permissionless approach compared to EigenLayer — any ERC-20 token can be used as restaking collateral (not just ETH/LSTs). This flexibility allows DeFi protocols to create customised security models.

Convex Finance maximises Curve LP yields by aggregating veCRV voting power. Depositors earn boosted CRV rewards without locking CRV themselves. Convex controls a significant portion of veCRV supply, making CVX voting power highly valuable in the 'CRV wars'. vlCVX (vote-locked CVX) directs Curve gauge weights.

Pendle is a yield-trading protocol that tokenises future yield by splitting yield-bearing assets into Principal Tokens (PT) and Yield Tokens (YT). This allows users to lock in fixed yields, trade yield exposure, or speculate on future rates. Pendle has found product-market fit with liquid staking tokens and restaking points trading.

Yearn Finance is the OG DeFi yield aggregator. Users deposit tokens into Yearn Vaults, which automatically deploy capital across lending protocols, LPs, and farming strategies to maximise yield. Yearn V3 introduced modular vaults with pluggable strategies. The protocol was founded by Andre Cronje and represents DeFi's 'set and forget' yield approach.