The Top 13 DeFi Tools on EOS
Decentralized Finance on a powerful blockchain
DeFi or Decentralized Finance is the name that defines the megatrend that has emerged around blockchain technology in recent years.
Decentralized finance is a set of financial applications based on blockchain networks that, in principle, do not need intermediaries to function. The rise of these financial products, which have characteristics similar to traditional products, could change the finance sector to some extent and brings with it opportunities and challenges.
DeFi seeks to develop traditional financial products, but with a higher degree of transparency and decentralization. These products are like lego bricks and can be combined with each other to develop an entire ecosystem of solutions that together form a great financial solution, making centralized and opaque financial institutions obsolete.
This is the idea that drove the term “DeFi” and the idea that led to its evolution to what it is today. In fact, it is impossible to ignore the huge impact of DeFi on the world of cryptocurrencies right now. For this reason, we have opened a space to understand what DeFi is and how this idea can change the world of finance.
The main reason to talk about Decentralized Finance on EOS is because of its technology. The EOS blockchain is capable of processing thousands and even tens of thousands of transactions per second, while other networks suffer from congestion with a maximum of 15 transactions per second.
Another fundamental and very prominent reason is that Dapps that are developed on EOS provide the user with free transactions. Compared to other networks where users pay high fees to transact, users on EOS do not have to pay network fees and in the case they do, the network fees are very close to 0.
Another cool addition is that two teams of Latin American developers from the EOS blockchain joined forces to boost the DeFi ecosystem within the network. EOS Costa Rica and EOS Argentina partnered up to continue promoting the DeFi ecosystem on the EOS network. They seek to support the development of DeFi applications and foster their growth within EOSIO, the base protocol of EOS.
Top Decentralized Finance Dapps on EOS.
DEX - Decentralized Exchanges
Let's start with DefiBox because it is practically the largest of the decentralized finance DApps within EOS due to its volume, liquidity, number of daily users and the variety of finance protocols it offers.
In the Swap section we are going to find a fairly busy market, with access to practically all the tokens that are traded on the EOS network. You can come here and quickly “swap” or exchange one token for another.
You can also obtain some earnings with DefiBox Swaps by providing liquidity of a pair of tokens (for example 50% EOS and 50% pBTC) and everyone who makes a swap between that pair will pay a commission from which you will earn a share. In addition, you will earn a portion of the platform's own BOX token every second for being a liquidity provider (LP).
Also, to promote the use of the platform, some pairs like EOS/USDT reward you with a portion of BOX each time you make a swap between that pair of tokens.
Defis Network (Swap)
Defis Network is another platform available to swap tokens. It is one of the DeFi platforms with the highest volume within the EOS network. It has a similar user interface with DefiBox. However, its main target audience seems to be focused on the Chinese community.
Defis Network has its native token DFS and has been home of several yield farming projects that at the time, generated a lot of movement during what is known as the DeFi Summer of 2020, when all this yield farming theme had its explosion of fame in the media.
You can earn some profit on the platform the same way as described above when we explained DefiBox. All things considered, they are quite similar.
A Swap is a useful protocol when you simply want to acquire or exchange one asset for another. But, what if you want to do more professional trading operations using an order book, and an interface that allows you to make more informed decisions taking into account the prices action on the chart, liquidity and volume of buy/sell orders, etc. This is where decentralized exchanges with orderbook come in handy.
NewDex is a professional-type decentralized exchange, similar to the ones you find on well-known platforms like Binance, Bitfinex, etc. It allows you to create, buy or sell orders at a specific price determined by you, which is known as limit orders. You can see the price action on the chart, the volume of the orders and have a variety of tools you might need to operate in a professional manner.
To yield some earnings on NewDex will depend on your skills as a trader, as long as you meet the objective of buying cheap to sell high, you will be able to make a profit. The main intrinsic benefit of using a DEX like NewDex is that your tokens will always be under your control as it is a decentralized protocol.
Alcor Exchange (Swap and Orderbook)
The most recent competitor to NewDex is Alcor Exchange, with a professional interface that allows you to do your trading operations like a pro. Although it does not yet have the same volume and liquidity as NewDex, it has a fairly clean interface to operate while remaining professional.
In addition, it integrates a Swap section just in case you are only interested in quickly swapping from one token to another.
To generate some earnings you can provide liquidity in their Swap protocol and earn commissions for each swap. Or if you prefer using the order book, you can earn a profit based on your trading skills.
Pizza Finance (Aggregator)
At the user level, an Aggregator works the same as a Swap, however, the main difference is that it takes your order and searches among many other decentralized exchanges to find which one(s) offer the best prices and directs your order through them.
This is the service that Pizza Swap offers. You simply place the pair of tokens that you want to exchange and the smart contract will take care of finding the best option for you among several that are available.
AIR is a decentralized exchange but optimized for the exchange of stablecoins. It is based on the same mathematical algorithms used in platforms such as Curve in Ethereum, which allow you to make exchanges between stable currencies with minimum slippage.
Slippage is when the price you want to sell/buy an asset does not have a buyer/seller who wants it at that same price. The further the price that the counterparty wants is from your price, the larger the slippage.
For the end users, minimum slippage translates into competitively low fees and allows you to exchange considerably larger amounts for a better price.
Stablecoins - Decentralized Stable Currencies
USN - Defibox
The USN stablecoin has a target value pegged to the US dollar, i.e. 1 USN should be worth 1 USD. It is created by depositing various valuable tokens such as EOS, pBTC, pETH, BOX and DEX. This ensures their value despite market fluctuations..
The protocol that supports VIGOR could take us an entire chapter to explain, or more. Like most stablecoins, the value of the VIGOR token is pegged 1:1 to the dollar. To generate VIGOR you must deposit other tokens as collateral such as EOS, pBTC, pETH, USDT, VIG which ensure their value in the market.
By depositing collateral and generating VIGOR, the platform rewards you with its VIG token which has various uses within its ecosystem.
USDE - Pizza Finance
USDE is the Stablecoin developed by Pizza Finance. Its concept is the same as in the previous ones, with the difference that it only accepts EOS as collateral.
By generating USDE, the protocol automatically begins to reward you with its PIZZA token.
EOSDT - Equilibrium
Although the Equilibrium team has its sights set on other skies, its EOSDT platform is still running on EOS. One point in favor of this platform is that its code is public on GitHub. It accepts EOS, pBTC and pETH as collateral to generate the EOSDT stablecoin.
You can earn some APY by simply depositing EOS as collateral. Then if you generate EOSDT and stake them within its platform you can generate an additional percentage.
Lending / Borrowing - Decentralized Loans
In the DefiBox lending protocol, depositors provide liquidity to the market and obtain passive income, while borrowers can borrow tokens for which they pay interest.
You can generate passive income in DefiBox Lend if you deposit tokens as a loan. This way you can generate an annual interest in the same token that you have deposited, and you will also automatically receive the native BOX token of the platform. If you borrow, you will pay an annual interest, but you will also receive the BOX token as a reward.
Watch a video on how to borrow crypto and pay it back on Defibox.
To generate passive income with Pizza Lend you can deposit your tokens. These tokens, when used by others in the form of a loan, will generate an annual interest. Also, if you deposit or borrow the platform rewards you with its native PIZZA token.
The VIGOR protocol is completely decentralized and open source, anyone has the ability to lock EOS and other tokens as collateral and issue VIGOR against them, or vice versa. Vigor tokens are issued by the smart contract when a loan is taken. This happens when a borrower locks tokens as collateral. The VIGOR protocol currently supports EOS and other tokens are added regularly, with the exception of security tokens and asset-backed stablecoins of any kind.
VIGOR users are rewarded by using EOS as the insurance backing leveraged VIGOR. You can use up to 10x leverage by taking secured collateralized VIGOR loans and then sell them for EOS. You can reduce exposure to price volatility by taking collateralized loans on any user in the EOS blockchain without fees.
Investing in assets will always carry high risk, and may even result in the total loss of your assets. We recommend researching and learning about each investment you wish to make and not to invest more than you can afford to lose.
The EOS ecosystem is constantly evolving for a variety of reasons. First, developers need to own EOS tokens (instead of spending them) to use network resources to build and run Dapps. Second, EOS is developing its blockchain technology with a focus on scalability, attracting commercial-scale Dapps that don’t want to face performance bottlenecks. We believe that the EOS DeFi ecosystem is poised to explode because of this scalability factor and we can’t wait to see it grow.