Immerse Yourself in Decentralized Finance: The 5 Best Lending Platforms

With decentralized exchanges or DEX, people can buy and sell cryptocurrencies directly with each other, without the interference of any middleman. In order to facilitate this crypto activity, people connect their crypto wallets to a DEX, choose their crypto trading pair of choice, enter the amount and trade their digital assets to generate profit.

In the first 3 editions of “DeFi Deep Dive”, we discovered “Valoring DeFi Blockchains”, the 5 best DeFi assets and the 5 best decentralized exchanges. In this edition, let’s discuss the top five lending platforms. These are:

  1. Aave
  2. Compound
  3. Anchor
  4. Abracadabra
  5. Venus

Aave (AAVE) is 2 things – a decentralized financial protocol as well as a crypto token. As a protocol, it allows the lending and borrowing of crypto. Lenders deposit digital assets into cash pools. Borrowers set up crypto collateral and take out “flash loans” using cash pools. As a token, it offers holders a reduced fee and also serves as a governance token by giving holders a vote on the development of the protocol.

  • Total value blocked: $ 14.13 billion
  • MCap / TVL ratio: 0.16

2 compound_lending_platform_defi

Compound (COMP) allows users to deposit crypto into pools and earn interest. Borrowers take out secured loans from compound pools by posting collateral. If this collateral falls below a threshold, the loan is automatically liquidated.

  • Total value blocked: $ 10 billion
  • MCap / TVL ratio: 0.12

three anchors anc_lending_protocol_defi

According to its white paper, Anchor aims to become “the gold standard of passive income on the blockchain”. Anchor is a Terra-based savings protocol that delivers a return fueled by block rewards from major Proof-of-Stake blockchains. ANC is the Anchor token, which grants holders of governance rights and a share of the protocol’s revenue.

  • Total value blocked: $ 6.2 billion
  • MCap / TVL ratio: 0.1

4 abracadabra abracadabra_lending_protocol_defi

Abracadabra is a cross-chain stablecoin lending protocol. It allows interest-bearing tokens, which users get from staking in vaults, to be used as collateral to strike Magic Internet Money (MIM) which are stable coins indexed to the USD.

TO SPELL is Abracadabra’s governance token that grants holders of voting rights and a share of the costs generated by the protocol.

  • Total value blocked: $ 4.8 billion
  • MCap / TVL ratio: 0.22

5 venus_lending_protocol_defi

Venus is an algorithmic money market based on Binance Smart Chain and a synthetic stablecoin protocol.

It allows users to borrow directly against collateral. It also allows users to hit VAI stablecoins (which are pegged to the USD) by posting at least 200% collateral. XVS Tokens are governance tokens of the Venus protocol.

  • Total value blocked: $ 2 billion
  • MCap / TVL ratio: 0.1

To note:

  • Figures are as of December 17, 2021 and are rounded.
  • Sources: DeFi Llama, CoinMarketCap, Messari, Future Money Wallet.
  • TVL = total value locked
  • Mcap = Market capitalization

Rohas Nagpal is the author of the Future Money Playbook and the chief blockchain architect at the Wrapped Asset Project. He is also a retired amateur boxer and hacker. You can follow him on LinkedIn.


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