A Quick Dive Into Avalanche DeFi

Avalanche is a 3rd generation open-source platform for launching decentralized applications with a focus on blockchain interoperability. The project was launched in 2020 by Ava Labs and the public token sale was completed with much hype. The mainnet of Avalanche was launched in September 2020.  Avalanche is another self-proclaimed ‘Ethereum Killer’ in the market and it facilitates the creation of custom blockchains too. The native token of Avalanche is AVAX and it’s used to pay the transaction fees and it also maintains the governance of the protocol. Avalanche has a high transaction throughput of 4500+ TPS and the native coin AVAX’s supply is capped at 720 million. Many reputed Ethereum DeFi projects like bzx, Sushiswap etc. have planned to integrate with Avalanche recently. There is an available Avalanche-Ethereum Bridge (AEB) that helps DeFi users seamlessly transfer assets between the Avalanche and Ethereum ecosystems. Let’s try to analyze the DeFi ecosystem of Avalanche where $458M+ value is locked at present.

Avalanche DeFi TVL over time from defillama

Pangolin

Pangolin, an automated market maker (AMM) DEX, is the top-performing DeFi project on Avalanche. The DEX is Metamask compatible. The AMM model works just like Uniswap. A liquidity provider earns fees for providing liquidity to any pair. The liquidity pool creation is permissionless. The swap trades take place with lightning speed. Pangolin has adopted a liquidity mining model and you can earn higher APY by providing liquidity to certain pools. Pangolin dominated 95% of the DeFi market on Avalanche and many clones of this project are available. The governance token of Pangolin is PNG.

Audit: No details are available

TVL: $436M+

Penguin Finance

Penguin Finance is an AMM based DEX with an intuitive UX design. The front end looks like Pancakeswap. The platform offers a high yield on various liquidity pools. It also has auto-compounding farms. PEFI is the governance token of the platform.

Audit: Certik audited

TVL: $9.3M+

Gondola Finance

Gondola Finance is a newly launched AMM based DEX. The platform offers high APY on safe liquidity pools like zDAI-DAI, zETH-ETH, zBTC-WBTC etc. and it has attracted nice TVL due to this. GDL is the governance token of the platform.

Audit: Not audited (forked from Saddle and Sushiswap)

TVL: $3.8M+ 

Lydia Finance

Lydia Finance is an AMM based DEX with a decent user interface. The project is offering auto compounding pools nowadays. It is supposed to be a Pancakeswap fork. The governance token of Lydia Finance is LYD.

Audit: Certik audited

TVL: $3M+

Snowball

This is a yield aggregator on Avalanche. The project is mainly offering auto-compounding yield for Pangolin vaults. The project also has a NFT shop. There is a StableVault that allows anyone to buy and sell stablecoins. SNOB is the governance token of Snowball

Audit: No details are available

TVL: $8M+ (double-counting of TVL is possible as it gets maximum TVL from Pangolin)

Olive Swap

Olive Swap is a Pancakeswap clone on Avalanche. It has both liquidity pools and single asset vaults. OLIVE is the governance token of the platform. The project also runs on Binance Smart Chain.

Audit: No details are available

TVL: $1.2M+

0.exchange

0.exchange is a multi-chain DEX. It operates on Avalanche and HECO. ZERO is the governance token of the project. The platform offers only two liquidity pools on Avalanche as of now.

Audit: No details are available

TVL: $1.4M+

YieldYak

YieldYak is a newly launched auto-compounding yield farm on Avalanche. It offers auto-compounding options for various DeFi platforms. YAK is the governance token of the platform but the token isn’t launched yet. As per the team, the token will be distributed in a fair way to their early users. The platform has drawn nice TVL due to a probable retrospective airdrop.

Audit: No details are available

TVL: $29M+ (double-counting of TVL is possible) 

The Avalanche-Ethereum Bridge (AEB) was launched in February 2021 and it has been pivotal to bootstrap the Avalanche DeFi ecosystem. Since the launch of the bridge, smart contract activity and transactions have grown rapidly on Avalanche. Solidity really works out-of-the-box for Avalanche, so the Ethereum developers can easily deploy their DAPPs on this blockchain. Due to the instant finality, Avalanche is ready for a high scale DeFi game. Avalanche has delivered a working platform with smart contract functionality very quickly unlike many other top blockchain projects. The blockchain architecture of Avalanche is quite complicated and the C-chain (Metamask compatible) is used for all DeFi activity presently. The transaction fees are obviously lesser than Ethereum but more than Binance Smart Chain. As the Layer 2 Ethereum chains have entered the market with a near-zero transaction fee, Avalanche will surely struggle to capture the DeFi market share at present. There is no doubt about the high promise of Avalanche due to its high technical specifications but it may take some more time to draw a high user base. You can definitely keep a close watch on the developments. 


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