The decentralized financial sector (DeFi) was in the shadows from the summer of 2020 to the first quarter of 2021. Investors are currently discussing whether the crypto sector is in a bull or bear market. Now is a good time to check the status of DeFi and identify protocols that can be the driving force for new trends.

Here is an overview of the best ranked DeFi protocols and an overview of the strategies used by users of these protocols.

Stablecoins are the backbone of DeFi
DeFi protocols related to stack coins are the cornerstone of the DeFi ecosystem, and Curve is still the go-to protocol when it comes to setting up stack coins.

Top 5 protocols secured by total cost. Source: Devi Lama
Data from Defi Llama shows that four of the five best protocols after total cost of lock (TVL) are associated with the creation and administration of stack coins.

It is important to note that although these protocols have come to the fore when it comes to TVL, the value of original tokens is mostly well below the 2021 all-time high.

The main idea is that participation in stack coins in the DeFi market through staking and farming has provided a stable return, in addition to providing management tokens for these platforms as an added bonus to reduce the depreciation of tokens.

Currently, stack coins play a key role in the overall stable operation of DeFi, which continues to expand with new protocols such as Frax Share and Neutrino rising to TVL rankings among a growing number of interconnected blockchain networks.

Lending and loans are the core of the DeFi value.
Lending platforms are another important component of the DeFi ecosystem and one of the key features that investors can interact with even during a bear market. AAVE and Compound are the current leaders with their TVLs valued at $ 12.09B and $ 6.65B.

Like other stablecoin protocols, AAVE and Compound experienced a peak in the value of the original token in 2021, and both have been in long-term stagnation for several months.

AAVE / USDT vs COMP / USDT on the 1-day chart. Source: Trading View
TVL AAVE’s growth has largely surpassed Compound due to its integration into the Polygon and Avalanche chains, increasing the number of collateral and allowing users to avoid high gas charges on the Ethereum network.

Long-term, risk-averse cryptocurrency users can benefit from lending their tokens for modest returns.

Aave compared to stablecoin making a comeback. Source: DeFi Prime
Related topics: Altcoin briefing: JunoSwap, Solidly, VVS Finance give DeFi a much needed update

Liquid stacking provides several DeFi benefits
The growing popularity of floating efforts also provides a new advantage to decentralized finance. Floating effort protocols such as Lido Finance, which was originally launched as an Ethereum exchange solution, but which has since expanded its support to Terra (LUNA), Solana (SOL), Kusama (KSM) and Polygon (MATIC).

Data from Defi Llama shows that TVL on Lido reached a new all-time high of $ 14.96 billion on March 10 as the addition of new assets continues to attract more value to the protocol.

The total cost is locked for Lido. Source: DeFi Lama.
At Lido, users can swap Ether and Solana and receive stETH or stSOL, which can then be used as collateral on AAVE to borrow stack coins. These assets can then be used to trade or grow a crop, thus increasing the total income generated from the original stacked asset.

Other notable Liquid Staking protocols include the StakeWise Eth2 provider, the Cosmos-based pStake protocol, and Stader Labs.

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Source: CoinTelegraph

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