Currently, decentralised finance is inseparable from Ethereum. This network became the primary environment for DeFi development and changed the way millions of people think about crypto asset management. But Ethereum also has limitations that require solutions related to scalability and efficiency issues. This is where polygons come into play.
Polygon Network was launched in 2017. Polygon Network aims to solve the blockchain scalability problem thanks to Layer2 solutions and sidechains. Layer 2 solutions are deployed on the underlying blockchain, which can process large numbers of transactions and reduce the load on the underlying network. Sidechains allow digital assets to be used securely on another blockchain. All this ensures the scalability of the network by interacting with other blockchains and helps reduce transaction costs.
In this article, we will be discussing what Polygon (MATIC) is and the top five DeFi projects on the Polygon network.
Top Five (5) DeFi Projects on Polygon
Polygon is an open-source project and proof-of-stake blockchain protocol for developing/connecting Ethereum-compatible blockchain networks and combining the Ethereum blockchain into a full multi-chain system. Polygon is a blockchain platform built by developers for developers, running on a multi-chain system and offering significant transaction gas fees, fast connections and network security.
Polygon is characterised by being secure, open and high-performing, fully benefiting from the Ethereum network effect. These fundamental properties further contribute to its scalability, Ethereum compatibility, sovereignty, user-developer experience, interoperability, and modularity, which have earned it a reputation for mitigating ecosystem fragmentation.
The platform has a decentralised team from different parts of the world and has built more than 7000 DApps on its blockchain. Here is a list of the top five Defi projects on the Polygon network:
Aave is a DeFi project that was recently built in the polygon network. Aave probably needs no introduction as it is one of the leading protocols in the whole DeFi ecosystem – according to DeFi Pulse, it currently has over $10 billion in TVL. The project was first started in 2017 under the name ETHLend.
Aave is a decentralised money market where users can borrow or lend tokens to earn interest. Aave also supports flash loans, where users can get loans without posting any collateral as long as they repay within the same block.
AAVE tokens are used to facilitate the governance of the protocol. It is currently one of the top 20 largest DeFi tokens by market cap.
DinoSwap is a multi-chain infrastructure project that builds liquidity for layer 1 blockchains, AMMs and collaborative projects. DinoSwap’s ultimate goal is to be a hub for cross-chain liquidity by taking the liquidity of many blockchains and then bundling them on a central platform. This allows users of any blockchain to benefit from the increased liquidity generated by DinoSwap.
DinoSwap chose Polygon as the first blockchain to launch, which can benefit from Polygon’s high liquidity and near-zero transaction costs. DinoSwap aims to leverage the above benefits of Polygon and act as a “launchpad” to help crypto projects rapidly increase the liquidity of their tokens while also becoming the Polygon network’s leading liquidity aggregator.
Dfyn is a multi-chain AMM DEX currently rolling out on the Polygon Network. Its network consists of Dfyn nodes spread across multiple Layer 1 and Layer 2 blockchains. This allows Dfyn to plug into each chain’s liquidity pools, allowing users to seamlessly trade their assets across multiple blockchains from a single interface.
Dfyn DEX works very similar to Uniswap on Ethereum. However, compared to Uniswap, Dfyn has the following advantages:
- Ultra-Fast Speed: Dfyn is built on a layer 2 blockchain (polygon) and ensures transaction speeds at least ten times faster than the Ethereum network.
- Negligible Costs: Dfyn offers zero-gas transactions and the best transaction prices via Smart Order Routing.
- Cross-Chain Transactions: Users can exchange assets on multiple blockchains, not just Ethereum-based assets.
ZED RUN is also a unique polygon-based gaming dApp. Players can breed, buy and sell NFT racehorses to prepare them for competition. These horses have different “blooms” that determine their rarities, such as Nakamoto, Szabo and Buterin’s bloodlines.
Winning races also increases the horse’s value, and successful players can later become “professional” breeders or track owners in the ecosystem.
ZED RUN’s onboarding mechanism between Ethereum and Polygon has recently been enhanced, with Web 3 architect Biconomy building a native cross-chain asset bridge for the platform.
The growth of other popular NFTs and gaming applications on Polygon, such as Chainguardians, CryptowarriorZ and Battle Racers, shows that gaming projects are attracted to Polygon’s scalable blockchain solutions and increasingly simple onboarding process.
EasyFi is a decentralised lending platform that aims to accelerate the growth of DeFi by providing liquidity (enough assets to close all orders traders wish to place) across the space at low cost and lightning-fast.
The app is built on Polygon, Ethereum, and Binance, and its “killer use case” is unsecured (and under collateralised) lending. This is new to crypto, as most lending platforms use an over-collateralised lending mechanism requiring users to have already more funds than they wish to borrow.
Unsecured loans on EasyFi are secured by TrustScore – you can think of it as a kind of “credit scoring system” on DeFi. Once an ERC-20 address is whitelisted on the EasyFi platform, Trustscore’s built-in algorithm can automatically assess its “reputation”.
A key difference between credit scoring systems in traditional finance and DeFi is that customer data on DeFi is protected by the blockchain and is less vulnerable to leaks and corporate exploitation.
EasyFi also offers flexible multi-asset yield farming services, traditional over-collateralization and airdrops to native EZ token holders.