Deep Dive Into Decentralised Finance: Top 5 Lending Platforms

With decentralised exchanges or DEX, people can buy and sell cryptocurrencies directly with each other, without the interference of any intermediary  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 swap their digital assets minting profits. 

In the first 3 editions of “DeFi Deep Dive”, we learned about “Valuing DeFi Blockchains“, the Top 5 DeFi Assets, and the top 5 Decentralised Exchanges. In this edition, let’s discuss the top five lending platforms. These are:

  1. Aave
  2. Compound
  3. Anchor
  4. Abracadabra
  5. Venus1 aave aave_lending_platform_defi

Aave (AAVE) is 2 things – a decentralised finance protocol as well as a crypto token. As a protocol, it enables the lending and borrowing of crypto. Lenders deposit digital assets into liquidity pools. Borrowers put up crypto collateral and take “flash loans” using the liquidity pools. As a token, it gives holders discounted fees and also serves as a governance token by giving holders a vote in the protocol’s development.

  • Total Value Locked: $14.13 billion
  • MCap / TVL ratio: 0.16

2 compound compound_lending_platform_defi

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

  • Total Value Locked: $10 billion
  • MCap / TVL ratio: 0.12

three anchor anc_lending_protocol_defi

According to its whitepaper, Anchor aims to become “the gold standard for passive income on the blockchain”. Anchor is a Terra-based savings protocol that offers yield powered by block rewards of major Proof-of-Stake blockchainsANC is Anchor’s token, which offers holders governance rights and a share of the protocol’s earnings.

  • Total Value Locked: $6.2 billion
  • MCap / TVL ratio: 0.1

4 abracadabra abracadabra_lending_protocol_defi

Abracadabra is a cross-chain stablecoin lending protocol. It enables interest-bearing tokens, that users get from staking in vaults, to be used as collateral to mint Magic Internet Money (MIM) which is USD-pegged stablecoins.

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

  • Total Value Locked: $4.8 billion
  • MCap / TVL ratio: 0.22

5 venus venus_lending_protocol_defi

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

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

  • Total Value Locked: $2 billion
  • MCap / TVL ratio: 0.1


  • The figures are as of 17 December 2021 and are rounded off.
  • Sources: DeFi Llama, CoinMarketCap, Messari, Future Money Wallet.
  • TVL = Total Value Locked
  • Mcap = Market Capitalisation

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

Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

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