4 Top Money-Making Decentralized Finance Applications


Today we’ll discuss some of the top Decentralized Finance (DeFi) applications that exist, serving people in a trustless manner around the world.

What do I mean by trustless? Given Ether’s immutable (cannot change) smart contracts, the behavior of the money moved around DeFi cannot be stolen, hacked, lost or misappropriated. Moreover, to earn the word ‘trustless,’ I don’t have to put my trust into a given person or organization — instead, I trust the underlying technology of the contracts they’ve devised. It’s trustless!

I’ve separated the following doc into four sections, comparing the platforms in each: Trading, Borrowing, WBTC Borrowing, and Lending.

With up to 5x leverage available to traders, dydxprotocol at dydx.exchange and folks like Antonio Juliano and Zhuoxun Yin bring you a beautiful night-mode interface that allows you to trade some of your favorite assets. Some people — especially those burned by Mt. Gox or other exit scams — are risk-averse to what we call ‘counterparty risk.’ What this means is that some people would much rather have less single points of failure when it comes to the custody of their money — and now we can even trade with leverage on platforms like dydx, so who needs centralized exchanges and their bankster owners?

Dydx lets you borrow, too, but we’ll discuss that more in detail in a future section of this article.

I do like how the people at fulcrum.trade (their parent org: bZx) separated their trading interface from their borrowing interface. We’ll have a closer look at their not-for-margin-trading borrowing interface in a later section, but the fulcrum.trade interface lacks some of the leverage available to dydx — although that negative is helped by having a broader selection of coins.

With a resounding set of achieved milestones and growth, compound.finance and some of the team Robert Leshner, Calvin Liu and Jayson Hobby have been building another Ether unicorn to add to our growing list.

With millions under management, and a wide variety of coins to choose from to use as collateral, Compound provides a unique opportunity in traditional financial history. It’s apparent that we can over-collateralize loans in crypto against stablecoins and be long those cryptos while getting spending money for the time being — the bullish attitude we have towards these cryptos says that their underlying growth in equity value will outperform the interest rates we’re paying on our stablecoin loans. Boom, we’ve just earned ‘free-ish’ crypto!

Wait, though, this really only applies to Ether and the Ethereum tokens listed on Compound At Time of Writing, and doesn’t appear to apply to WBTC? I really had hoped to diversify my collateral I’m holding to maximize the upwards potential of both DeFi and The King of Coins, $BTC!

(See, a ‘Collateral Factor’ of 0% means we can’t use Wrapped BTC as a collateral coin).

Whatever are we to do?

Like I’d mentioned above, bzx.network has the tools fulcrum.trade and torque.loans, and some of the people working wonders like Nick Sawinyh, Kyle J Kistner or their team account here bZx Team. We discussed fulcrum.trade above and hinted at the existence of torque.loans — as a flipside of the same coin, instead of lending and borrowing under-collateralized loans for the purpose of margin trading (a la dydx) we can lend and borrow over-collateralized loans for the purpose of hedging, or whatever other purpose you had in mind (a la compound)!

Simply load up your MetaMask or other wallet, select the token to receive, change your collateral to WBTC and — oh, spoke too soon! Found an error among all tokens when selecting WBTC as collateral.

Wonder if there’s a bug bounty…

Soon! You’ll be able to achieve all that diversification and goodness I was speaking about earlier.

What do diversified assets and Albert Einstein have in common?

Einstein knew that being on the winning side of compound interest would free people — and diversifying your portfolio is step #1 to earning consistent returns. All our moms (or indeed dads, or indeed people-y people) told us ‘don’t put all your eggs in one basket,’ right?

Here’s where stuff gets interesting. Because the three solutions noted above are all open-source and allow and encourage people to develop tools to add to their utility, staked.us of course at Staked developed their tool Robo Advisor for Yield.

What’s it do?

At present, it indexes Compound, dydx, and fulcrum.trade and gives you the best rate among each of them — meaning that if you were to have Robo Advisors for Eth, USDC, DAI and SAI, you’d be earning the best yields for four different assets (one might moon! And: eth staking, coming soon!) — maybe more different assets in the future: https://github.com/Stakedllc/robo-advisor-yield/issues/5 at any given point.

They’ve used on-chain, open-source solutions in the keeping with crypto spirit and in order to bolster the offerings of the participant protocols. This means that they add a layer to the tech without adding a party to be considered when thinking about counterparty risk — the trust is still in the tech (which has all been thoroughly audited, be sure)!

So head on over to staked.us, check out their platform where you can earn returns on staking PoS coins, but more importantly check out their Robo Advisor for Yield today. You can mint your own RAYs and begin the journey to doubling your crypto, too!

Looking to trade undercollateralized loans, on the blockchain and without a third party? Check out some of the other solutions, like dydx.exchange and fulcrum.trade.

Looking to borrow funds against your crypto? I’d recommend compound.finance or torque.loans.

DeFi is here to stay — banking the unbanked — let the games commence!

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