A Quick Dive Into Polygon DeFi

Matic Network was a Binance launchpad project. The token sale of MATIC was a grand success in 2019. Matic was trying to address the scalability issue of Ethereum Blockchain. In February 2021, the project was rebranded to Polygon. The rebranding not only came with a name change but also expanded the mission of the project and technological scope. Very ambitiously, Polygon wants to be ‘Ethereum’s Internet of Blockchains’ now. What the hell is that? Polygon aims to provide the framework for connecting all Ethereum-compatible blockchain networks by providing a dedicated, optimized instance of Ethereum. Sounds amazing! The project has a complicated architecture. It provides two methods for moving assets between Ethereum and Polygon – Plasma Bridge and the PoS Bridge. Plasma bridge has high security but withdrawal takes 7 days. The PoS bridge provides PoS security and faster withdrawal to Ethereum mainnet. The state of the validators is maintained on the Ethereum mainnet. Overall, Polygon offers a lot of security on the Ethereum side and that’s why many popular Ethereum DAPPs have adopted it. TPS on the PoS chain of Polygon is very high with negligible transaction cost and so it looks very fit for DeFi or decentralized finance. Let’s try to analyze the DeFi ecosystem of Polygon where $4.96b+ value is locked at present.

Polygon TVL growth from defillama

Aave

Aave is a reputed decentralized lending-borrowing platform on the Ethereum blockchain. The borrowers must deposit collateral before borrowing. AAVE is the governance token of the Aave Protocol. Ownership of the Aave Protocol belongs to the AAVE token holder’s governance. Protocol upgrades are decided by votes on Aave Improvement Proposals (AIPs). Recently, Aave has embraced Polygon and attracted amazing TVL. Staking and governance features aren’t available on Polygon yet. Aave dominates 40% of Polygon DeFi now.

Audit: Original protocol is audited by Certik, OpenZeppelin etc.

TVL: $2.05b

Quickswap

Quickswap, an automated market maker (AMM) DEX, is one of the first DeFi projects on Polygon. Quickswap is a fork of Uniswap and the AMM model works just like Uniswap. A liquidity provider earns fees for providing liquidity to any pair. The swap trades take place with lightning speed and almost zero fees. Quickswap has adopted a liquidity mining model and you can earn higher APY by providing liquidity to certain pools. QUICK is the governance token of the protocol.

Audit: Audited by Contract Security

TVL: $1.04b 

Sushiswap

Sushiswap is a reputed Ethereum DeFi project that has gone multi-chain. It is an AMM based DEX and fork of Uniswap. Sushiswap supports Polygon and has attractive liquidity mining incentives for Polygon users. SUSHI is the governance token of the protocol.

Audit: Original protocol is audited by PeckShield

TVL: $625m+

Curve

Curve is an Ethereum DeFi project designed for efficient stablecoin trading. Curve is also the engine of the famous DeFi aggregator Yearn Finance. CRV is the governance token of the protocol. Curve is offering attractive liquidity mining incentives for Polygon users.

Audit: Original protocol is audited by Quantstamp and Trail of Bits

TVL: $603m+

Wault Finance

Wault Finance describes itself as an ‘all-in-one DeFi Platform’. The protocol has 2 tokens – WAULTx and WEX. The project offers features such as: WaultSwap (AMM), Wault Launchpad (new project presales), Wault Locker (liquidity locks for new or established projects), Wault Farms (staking and farming) and some other services. Wault Finance works with BSC and Polygon now and presently, the liquidity mining incentive for Polygon users is quite attractive.

Audit: Audited by SlowMist, Certik

TVL: $243m+

Dfyn Network

Dfyn Network is an automated market maker (AMM) DEX on Polygon.  It is a fork of Uniswap. The UI is cool and the project is backed by prominent investors. The platform offers a ‘gasless mode’ for software wallet users. Dfyn Network offers high liquidity mining incentives for both single asset vaults and liquidity pools. DFYN is the governance token of the protocol. The project describes itself as a multi-chain DEX and may embrace more blockchains down the line.

Audit: No details are available

TVL: $215m+

Beefy Finance

Beefy Finance is a popular multi-chain yield aggregator. BIFI is the governance token of the protocol. It is an anonymous project and received great popularity on Binance Smart Chain (BSC) for being the first yield optimizer on it. Beefy Finance started to support Polygon some months back and Polygon is the second most popular chain after BSC for the users of this platform.

Audit: Audited by DeFi Yield and Certik (passed preliminary audit)

TVL: $103m+

Balancer

Balancer is a popular Etherereum DeFi project. The AMM protocol of Balancer is specially designed to reduce cost and slippage during trading. The multi-token pools of Balancer do portfolio management on their own by using Smart Order Routing (SOR). When the price of an asset increases within the portfolio, the financial robot sells the appreciated asset and rebalances the portfolio. BAL is the governance token of Balancer. Very recently, Balancer has connected to Polygon and attractive liquidity mining incentives are available for Polygon users.

Audit: Original protocol is audited by Certik, OpenZeppelin and Certora

TVL: $78m+

The above-cited projects are the top projects on Polygon as per TVL. Numerous new projects are integrating themselves with the network and the rising TVL signifies that Polygon’s playbook is working. Very importantly, the project doesn’t deviate from Ethereum as it acts as an Ethereum scalability suit. Building and deploying DAPPs on Polygon is damn easy for the Ethereum developers and the benefits are being reaped by the chain. Top exchanges like Okex, MXC, Gate.io, AscendEX etc. have supported Polygon by enabling direct transfer of assets to the PoS chain. Polygon really seems to be ready to capture the network effect of Ethereum and get the first-mover advantage.

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