What are the DeFi projects that will affect the future financial market?
Editor's Note: This article comes fromCrypto Valley Live (ID: cryptovalley)Editor's Note: This article comes from
Crypto Valley Live (ID: cryptovalley)
Crypto Valley Live (ID: cryptovalley)
, Author: Quantstamp, translation: Olivia, reprinted by Odaily with authorization.
DeFi applications are still actively promoting the automation and decentralization of finance. The term hyperliquidity comes to mind because DeFi is creating infrastructure that enables levels of market efficiency that were not possible before. In this article, we will focus on:
yearn.finance finds the best rate of return for users
Curve
The purpose of KeeperDAO is to promote the healthy development of the entire mortgage loan market.
secondary title
lower transaction fees
Stablecoins are the best use case for Ethereum, and Curve improves the utility of existing stablecoins by enhancing their liquidity. Curve is a decentralized exchange similar to Uniswap, except it is optimized for stablecoins. Curve differences include:
Focus on stablecoin-to-stablecoin and synthetic bitcoin-to-synthetic bitcoin trading (eg: wBTC and sBTC).
lower transaction fees
In Uniswap, users who expect to trade large amounts of stablecoins at close to 1:1 ratios tend to be disappointed by slippage. While this slippage is not ideal for stablecoins, it is necessary to keep Uniswap’s market alive, as Uniswap is designed to support volatile trading pairs.
CurveDAO and the CRV distribution mechanism was audited by Quantstamp.
yearn.finance
Curve fulfills an important need in the DEX ecosystem. By only supporting trading pairs where assets are pegged to the same value, Curve can support a pricing mechanism that reduces slippage while maintaining a healthy market. The combination of low slippage and low fees has brought huge transaction volume to Curve. More importantly, this approach also enhances the liquidity of the entire stablecoin ecosystem.
In addition to enhancing the liquidity of stablecoins, Curve has also recently transitioned to decentralized governance. Just last week, CurveDAO launched and began distributing CRV governance and utility tokens.
Another booming DeFi use case is earning interest on digital assets. One of the challenges users face in DeFi is ensuring their assets are lent to the market that offers the best APR. Achieving this is difficult because the market for the best APR can change frequently.
KeeperDAO
The brainchild of Andre Cronje, yearn.finance was created to automatically match customers with the best APR for their stablecoins. Users only need to deposit stablecoins into yearn.finance, and the protocol will automatically deposit funds into Aave, dYdx or Compound. If a user's funds are initially deposited in Aave, and then dYdX can offer a higher APR, the user's funds will automatically switch from Aave to dYdX.
Yearn is constantly innovating, so keep an eye out for new financial products - but also be aware that Yearn also releases regular unaudited updates. While Quantstamp recently completed an informal code review of yearn.finance, yearn.finance also released an unaudited update shortly after.
secondary title"KeeperDAO provides another way for DeFi users to earn income by participating in liquidation. Liquidation is an underrated mechanism that ensures the health of the mortgage market like Compound and Maker. For every loan issued to a user, these protocols must hold enough user collateral to break even if the user defaults."Maker, one of the earliest and most reputable DeFi projects, recently had an undercollateralization crisis that put their entire system at risk. The price of Ethereum fell sharply, causing many loans to default. Collateral auctions started, but there were no liquidators to buy discounted collateral. If the community does not respond quickly, the entire DAI system may fail."Grim Trigger"KeeperDAO is a capital pool designed to allow
protector
Use flash loans to borrow from pools of funds to take advantage of liquidation opportunities of any size. The creators of KeeperDAO also designed
, which is an incentive mechanism to prevent head-to-head battles between Keepers and external liquidators. The purpose of KeeperDAO is to ensure the healthy development of the mortgage lending market, to allow non-whales to seize every liquidation opportunity of any size, and to encourage healthy competition among liquidators.
Quantstamp has audited KeeperDAO in the past and is currently auditing updates to the KeeperDAO protocol."Difficult journey, but fluid future."As we have warned throughout the article, many DeFi projects that are at the forefront of innovation also pose high risks for users. Simultaneously updating existing systems with new, unaudited ones is also very dangerous - even audited projects carry some risk.
