Cryptographic Avalanche Protocols (AVAX)

avalanche (AVAX) was originally the home of DeFi and has hosted a number of projects that make the most of its faster and more efficient ecosystem. And the list goes on.

Avalanche is aptly named. With 364 projects launched in the last 14 months, the smart contracts platform for decentralized applications takes its role as a competitor to ETH seriously. As the PoS blockchain with the fastest speeds and the largest number of validators, it is uniquely positioned to serve its chosen niche as a DeFi destination of choice.

In addition to faster speeds, users benefit from lower costs to deploy smart contracts (currently one-tenth the cost on Ethereum). Avalanche virtual machines allow developers to launch custom blockchains. Users can easily transfer assets to and from Ethereum through the Avalanche Bridge.

The network is not resting on its laurels, but aggressively targets the growth of its ecosystem. She recently launched the Blizzard Fund, with $ 200 million will be allocated to projects in DeFi and NFT. This followed Avalanche Rush, a similar initiative involving $ 180 million to fund developers looking to launch projects on the platform.

In addition to its observable growth, the amount of energy behind the Avalanche Protocol is testament to its future potential to shape the future of DeFi. In this article, we are going to take a look at the projects that are currently worth knowing.

DeFi is at the heart of the attempt to recreate the traditional banking system using chain-based solutions, avoiding the endemic problems of waste and bureaucracy that tend to plague centralized institutions.

DeFi therefore covers many different areas. The 58 applications classified as DeFi in the avalanche ecosystem consist of a combination of applications developed in-house and integrations of existing solutions (Aave, Curve).

Below, we take a look at some of the major DeFi applications developed on and for the Avalanche network. Many of them are an answer to the question “What is [insert name of well-known dApp] looks like it was faster and cheaper to use? ”

Of course, there are also real innovations that add to the existing DeFi universe.

Fund raising

One of the first ways DeFi revolutionized finance was the methods by which new projects raise funds. The ICO boom of 2017 was one of the first big DeFi experiments, and it certainly provided some important data. The way projects are controlled and nurtured is fundamental to the future of DeFi.

avalanche (XAVA)

“Welcome to the future of fundraising”

Avalaunch is the native solution of the Avalanche network to help launch new projects and build communities. Essentially, it’s an Initial DEX Offering (IDO) platform that aims to solve common issues with decentralized funding, from basics like pricing and speed to user experience.

While not a new concept, it brings an extra layer of ease and reliability to the wild west of the decentralized roster. Signing up on a typical platform may require a certain level of patience and expertise. A natural step in the evolution of any new technology is that the processes require less effort and encounter fewer bugs.

If that sounds like a small innovation, remember that this is how Apple, in its heyday, made everything it touched into mass-adopted technology, without having to cut prices.

In a blog post published earlier this year, the company expressed a more inclusive approach to non-native avalanche projects. Assuming that the future is multi-channel, they argue, “a good team with a strong vision, no matter what their current channel of choice is, absolutely deserves our time and attention.”

Loans and borrowing

While Bitcoin laid the foundation for decentralized finance by introducing unlicensed payments, pioneers like Aave and Compound have laid another groundwork by solving the problem of decentralized borrowing. Avalanche’s own solution is in turn an important step in its work to move the DeFi field beyond Ethereum’s constraints.

Benqi (IQ)

“Unblocked liquidity”

Currently one of the most prominent projects in the network, Benqi is a decentralized, non-depository borrowing and lending protocol. Concretely, it offers users the basic functionalities of a bank: users can borrow and lend digital assets (WETH.e, WBTC.e, USDT.e, etc.) and earn interest. Since it also functions as a bridge to Ethereum, users of the latter can escape the limitations of the Ethereum network.

There are plans to add liquidity staking and launch an additional DeFi primitive to enhance the range of DeFi strategies open to Avalanche users. The roadmap also includes a series of subnets (similar to parachains) that will allow institutions to create networks without the limitations of virtual machines.

From a governance perspective, the development team is aiming for gradual decentralization towards an appropriate DAO status. Liquidity extraction incentives will ensure native QI tokens are distributed more widely, as well as governance.

As the majority of DeFi business still revolves around commerce, so do the most famous Avalanche projects. In addition to the following, these include Lydia Finance, Canary Exchange, Elk Finance, and Olive Cash (both multi-channel).

Pangolin (PNG)

“Develop your DeFi trading”

Pangolin is a decentralized exchange (DEX) for Avalanche and Ethereum assets. Originally a fork of the Uniswap DEX, it uses the Automated Market Maker (AMM) model to offer P2P trading – only faster and cheaper. It is unusual to prioritize fiat integration, offering users the option to purchase the native AVAX Avalanche token using Apple Pay or Credit Credit. This reflects its strategy to reach a wider audience of users.

The project emphasizes that it is community owned and community led. The original intention was to distribute 100% of the native PNG tokens to the community (cash mining and airdrops).

The community recently voted to reduce PNG’s supply by 57% (from 538 million to 230 million) to improve the underlying tokenomics and to allocate 30 million tokens to a foundation to fund the “long-term sustainability” of the. network.

Trader Joe (JOE)

“One-stop-shop decentralized trading on Avalanche”

While Pangolin may have been the original DEX Avalanche, Trader Joe has emerged as the biggest in recent months with an TVL of $ 2.49 billion at the time of writing (up from Pangolin’s 419 million).

It promotes itself as a “one-stop-shop” trading platform for the Avalanche user base. It also plans to expand into the lending space (through its “Banker Joe” branch), and potentially aims to become a long-term end-to-end DeFi provider.

Unlike Pangolin, its tokenomics are more traditional, with 40% split between the developer team and treasury, and 10% reserved for strategic investors (a group that already includes Defiance Capital). The rewards are focused on the holders of the JOE token (rather than the liquidity providers) who share the costs of trading.

Interestingly, neither Trader Joe nor Pangolin waives trading fees (as some other DEXs do), but seeks to differentiate themselves through functionality and user experience.

Avalanche investment tools

Avalanche’s DeFi focus naturally attracts projects that aim to solve very specific problems with the financial system, like Verso Finance (which aims to connect traditional finance to decentralized finance). The majority of specialist projects exist to help DeFi-specific investment strategies, such as yield farming.

Finance Penguin (PEFI)

“The next generation of DeFi”

Penguin Finance is based on PancakeSwap, and its stated goal is to bring yield farming, staking, and other features to the Avalanche network. Leveraging the Pangolin platform for trading, it presents users with a gamified design to entice them and enable them to pursue various DeFi investment strategies.

The platform includes real-life games (Penguin Emperor, Penguin Arena), charity events, NFTs, and “the cheapest and most profitable autodial protocol on the Avalanche network”.

PEFI token holders can Yield-Farm in “Igloos”, wager in “Nests” and earn additional rewards from partners in “Club Penguin”. Users have various incentives to invest for the long term. The coin is built on a deflationary mechanism so that the value increases over time, and there is a 6% “paper hand penalty” for unstated PEFI.

Deflationary tokens and “paper hand” penalties encourage users to invest for the long term. While it seeks a stable base, it is a frenetically evolving platform that is worth following.

Yak yield (YAK)

“Gain more output and save time”

Yield Yak is a self-compounding agricultural platform for the Avalanche network. It allows users to deposit LP tokens they have received from other Avalanche DEXs such as Pangolin and maximize their return.

While gasoline costs are cheaper on Avalanche, they are not negligible. Yield Yak bundles user-deposited LPs into a smart contract and leverages economies of scale to reinvest rewards more efficiently.

Automatic compounding saves users time, and dividing capital and compounding costs maximizes crop yield. Ultimately, users will also be rewarded for their activity with YAK tokens (not yet released), which give holders a share in the governance of the platform and its trading costs.

Although the concept seems sound and there is no evidence of suspicious behavior, questions remain about the security of the protocol and its audit status. He currently holds a score of 2.74 on isthiscoinascam.com.

The avalanche has only just begun. This preview was like a snapshot of a sprinter about 5 yards from the starting block, and is not intended to be definitive or complete. It is intended to give an idea of ​​the pace of innovation on this (relatively) young platform.

The cleaner and faster ecosystem that AVAX provides will undoubtedly be a source of many more innovative projects in the future. With his open attitude and willingness to collaborate, it is likely that many future Avalanche projects will begin outside the network.

While we have focused on native Avalanche applications, the future envisioned by Avalanche is one of interoperability rather than tribal loyalty. This is a big point in its favor, as the market globally shifts from the old question of Flippening to the Grand Convergence.


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