DeFi Protocols
Deep dive into major DeFi protocols, including Aave, Compound, Uniswap, etc.
Protocol Overview
There are many excellent protocols in the DeFi ecosystem, each with unique features and advantages. This guide will详细介绍 mainstream DeFi protocols' functions, features, and usage methods.
Lending Protocols
1. Aave
Introduction:
- One of the largest decentralized lending protocols
- Supports multiple assets
- Innovative features
Main Functions:
- Deposit to earn interest
- Collateralized borrowing
- Flash loans
Supported Assets:
- Stablecoins (USDC, USDT, DAI)
- Major coins (ETH, BTC)
- Various tokens
Features:
- Flexible interest rate model
- Multiple collateral types
- Innovative features (e.g., aTokens)
Yield:
- USDC: 3-10% annualized
- ETH: 1-5% annualized
- Varies with market
Risks:
- Smart contract risk
- Liquidation risk
- Interest rate risk
Suitable for:
- Want stable returns
- Need borrowing function
- Have some experience
2. Compound
Introduction:
- Established lending protocol
- Algorithmic interest rate model
- Community governance
Main Functions:
- Deposit to earn interest
- Collateralized borrowing
- Governance token (COMP)
Supported Assets:
- Major stablecoins
- ETH, WBTC
- Other tokens
Features:
- Algorithmic interest rates
- Auto-compounding
- Governance token rewards
Yield:
- USDC: 2-8% annualized
- Varies with market
Risks:
- Smart contract risk
- Liquidation risk
Suitable for:
- Seek stable returns
- Believe in algorithmic model
- Long-term holding
3. MakerDAO
Introduction:
- DAI stablecoin issuer
- Over-collateralization mechanism
- Decentralized governance
Main Functions:
- Mint DAI
- Collateralized borrowing
- Stablecoin issuance
Supported Assets:
- ETH
- WBTC
- Other collateral
Features:
- Over-collateralization
- Stablecoin mechanism
- Decentralized
Yield:
- DAI deposits: 1-5% annualized
- Relatively stable
Risks:
- Liquidation risk
- Stablecoin depegging risk
Suitable for:
- Need stablecoins
- Long-term ETH holders
- Believe in decentralization
DEX Protocols
1. Uniswap
Introduction:
- Largest decentralized exchange
- AMM model
- Multiple version iterations
Main Functions:
- Token swapping
- Liquidity provision
- NFT trading (V3)
Versions:
- V2: Classic AMM
- V3: Concentrated liquidity
- Latest version has richest features
Features:
- Best liquidity
- Supports multiple tokens
- Innovative features
Fees:
- 0.05% - 1% (depends on pool)
- Distributed to liquidity providers
Suitable for:
- Need to trade tokens
- Provide liquidity
- All DeFi users
2. Curve
Introduction:
- Designed for stablecoins
- Low slippage
- Yield optimization
Main Functions:
- Stablecoin swapping
- Liquidity provision
- Yield optimization
Features:
- Extremely low slippage
- Suitable for large transactions
- Multiple stablecoin pools
Fees:
- 0.04% - 0.4%
- Relatively low
Suitable for:
- Stablecoin trading
- Large swaps
- Seek low slippage
3. PancakeSwap
Introduction:
- Largest DEX on BSC
- Low gas fees
- Rich yield farms
Main Functions:
- Token swapping
- Liquidity provision
- Yield farming
Features:
- Very low gas fees
- Fast trading
- Many yield farms
Fees:
- 0.25%
- Relatively fixed
Suitable for:
- BSC ecosystem users
- Seek low fees
- Yield farming
Yield Optimization Protocols
1. Yearn Finance
Introduction:
- Automatic yield optimization
- Multiple strategies
- Professional management
Main Functions:
- Automatically find highest yields
- Strategy execution
- Yield optimization
Features:
- Fully automated
- Multiple strategies
- Professional team
Yield:
- 5-20%+ annualized
- Depends on strategy
Suitable for:
- Seek automation
- Don't want frequent operations
- Trust professional management
2. Convex Finance
Introduction:
- Curve yield optimization
- High yield rates
- Professional strategies
Main Functions:
- Curve yield optimization
- Auto-compounding
- Strategy execution
Features:
- Focused on Curve
- High yield rates
- Professional optimization
Yield:
- 10-30%+ annualized
- Relatively high
Suitable for:
- Curve users
- Seek high returns
- Experienced users
How to Choose Protocols
1. Choose Based on Needs
Need Lending:
- Aave: Rich features
- Compound: Stable and reliable
- MakerDAO: Need DAI
Need Trading:
- Uniswap: Best liquidity
- Curve: Stablecoin-specific
- PancakeSwap: Low fees
Need Yield Optimization:
- Yearn Finance: Automation
- Convex Finance: High returns
2. Considerations
Security:
- Audit reports
- Historical record
- Community trust
Yield:
- Current yield rate
- Historical performance
- Sustainability
Liquidity:
- TVL size
- Trading volume
- Depth
User Experience:
- Friendly interface
- Simple operations
- Complete documentation
Protocol Usage Recommendations
1. Start Small
Recommendations:
- Test with small amounts first
- Familiarize with operations
- Understand risks
2. Diversify Investments
Strategy:
- Don't use only one protocol
- Diversify across multiple protocols
- Reduce single risk
3. Continuous Learning
Recommendations:
- Follow protocol updates
- Learn new features
- Participate in community
4. Risk Management
Recommendations:
- Understand various risks
- Set stop-loss
- Regular checks
Summary
DeFi protocols provide rich functions and services:
- Lending Protocols: Deposit to earn interest, collateralized borrowing
- DEX Protocols: Token swapping, liquidity provision
- Yield Optimization: Automatic optimization, maximize returns
When Using Protocols:
- Choose based on needs
- Consider security
- Diversify investments
- Manage risks properly
- Continuous learning
Remember: Each protocol has its features and risks. Understanding protocols and managing them properly is essential for safe usage.
Next Steps:
- 🌱 Basics - Back to basics
- 💱 DEX Trading - Learn trading
- 💧 Liquidity Pools - Understand liquidity