The DeFi sector remains a prominent component within the crypto industry. DeFi, also known as decentralized finance, offers alternative ways of carrying out financial operations with no central entities involved.
These emerging blockchain-based financial tools and incentives have sparked interest among users from all parts of the world. In this guide, we will focus on how developers could benefit from DeFi solutions on NEAR Protocol and identify the top five DeFi projects on NEAR.
What is DeFi?
DeFi enables global, peer-to-peer financial services (trading, borrowing, lending, earning interest, and more). Currently majorly reliant on the Ethereum network, decentralized finance is based on blockchain technology, therefore it is built on a distributed open ledger and is pseudonymous. These financial services are faster and less expensive due to the absence of third parties (ex. banks). Not to mention, DeFi platforms offer extra functionality, such as algorithmic stablecoins, yield farming, and other instruments that cannot be implemented through TradFi.
Blockchain technology allows recording transactions in blocks and lets users verify them via a specific consensus algorithm. If the transactions are verified, the block is then encrypted and added to the chain of blocks containing previously recorded data.
In general, blockchain technology gets its security from the fact that recorded information in each proceeded block cannot be altered. This model enables a drastically different approach to traditional finance, where the control over money is appointed to central entities.
N.B. Learn more about DeFi here.
Why do developers build on NEAR?
The recent innovations in DeFi development have boosted the growth and adoption of blockchain technology. As the demand grows, new user-friendly platforms emerge.
Launched in 2020, NEAR Protocol is a Layer 1 blockchain and a sharded Proof-of-Stake network. NEAR offers high-level scalability for lower prices and faster finality time by splitting the blockchain into shards (‘sub-blockchains’).
Via NEAR’s Rainbow Bridge, developers can seamlessly transfer Ethereum assets to NEAR and pay lower fees, benefitting from high throughput and speed at the same time. The Rainbow Bridge connects NEAR and EVM-compatible scaling solution Aurora.
NEAR Ecosystem growth: 2022 overview and results
For many crypto projects, 2022 has been a year of extreme volatility and uncertainty. However, the NEAR Ecosystem has continued to expand, making it a step closer to creating an open and accessible Web3 for everyone.
This year alone, more than 800 projects have been awarded monetary NEAR grants, amounting to more than $45 million in total. One of these platforms is GetBlock. The grant was used on supercharging the research and development of the blockchain explorer for NEAR. Via a user-friendly dashboard, NEAR blockchain explorer is able to provide detailed statistics about the state of the blockchain, including and not limited to block data, transactions, and accounts.
N.B. Learn more information about NEAR blockchain explorer here.
5 DeFi Projects to Check Out
Now, let’s talk about the top five DeFi projects built within the NEAR ecosystem, that we think you might find interesting.
Ref Finance is an open-source and community-led DeFi platform designed specifically for NEAR native tokens. Ref Finance is the first Automated Market Maker (AMM) and DEX on NEAR Protocol, which facilitates NEAR’s low fees, lightning-fast transaction finality, and WebAssembly-based runtime.
With the help of Ref Finance, users can trade tokens, stake LP tokens into farms, and provide liquidity.
Additionally, Ref Finance enables multiple pools in one contract, customizable pool fees, and atomic transactions. The platform is ideal for NEAR projects looking for ways to showcase their tokens on the market.
Meta Pool App is a liquid staking solution for $NEAR and wNEAR token holders. Meta Pool users can earn staking rewards and take advantage of multiple different DeFi protocols.
When a user is liquid staking $NEAR tokens, they are distributed across 80+ validator nodes, which builds the foundation for high-level decentralization and security for NEAR Protocol.
Source: Liquid Staking with Meta Pool
Meta Pool smart contracts are able to automatically rebalance allocations to validators, based on a few key parameters, such as % of the staked funds with each validator. Meta Pool users can stake and unstake NEAR at any time. Additionally, owners of $META tokens can earn the right to participate in the platform’s governance processes.
Jump DeFi App is a one-stop decentralized finance platform, which provides accessible DeFi services to users and developers. Essentially, Jump DeFi is an automated market maker and a decentralized exchange platform designed specifically for NEAR-based tokens.
Jump DeFi allows users to implement several protocols without having to learn how they work to perform basic tasks. Hence, the platform’s mission of making NEAR’s mass adoption a reality.
In addition to a plethora of financial services, Jump DeFi also paves the way for NFT staking and lets users create their own NEP-141 token for free, and more.
Launched in July 2021, Spin.fi is the first NEAR-based platform to provide DeFi users with a CEX-competitive trading experience by offering an on-chain order book solution, which includes flexible liquidity, easy access for institutional traders, transparent on-chain verification, trading robots interoperability, and much more.
The on-chain order book allows developers to build different complexity types of derivatives, such as perpetual and spot trading. This 360° decentralized trading platform is a trendsetter amid other order book and derivatives platforms in the NEAR ecosystem.
Tonic is a fast-speed and permissionless DEX built on top of NEAR L1. Tonic guarantees one-second block time finality alongside low fees. This community-powered and led platform’s services bring the benefits of centralized exchanges to NEAR users.
Similar to the previous platform, Tonic is an on-chain order book-based platform, which effectively utilizes NEAR’s EVM-compatible Aurora to let users create markets for a wide range of assets.
DeFi, undoubtedly, is an important sector in the cryproverse, with the total value locked amounting to over $41 billion at the time of writing. Despite the market’s volatility, NEAR Protocol remains one of the few projects to allocate huge amounts of grants to various platforms (GetBlock’s NEAR blockchain explorer), including DeFi applications. In this guide, we have put together a list of the top DeFi projects built on NEAR, that we feel have shown their dedication and significance throughout this year.
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