33 types of DeFi Protocols (Part 1)

Decentralized Finance (DeFi) is an umbrella term for financial services powered by blockchain technology. There are 33 types of DeFi Protocols.

Decentralized Finance (DeFi) is an umbrella term for financial services powered by blockchain technology.

There are 33 types of DeFi Protocols:

1. Liquid Staking

2. Lending

3. Decentralized Exchanges

4. Bridges

5. Collateralized Debt Position

6. Services

7. Yield

8. Tokenization of Real World Assets

9. Derivatives

10. Yield Aggregators

11. Cross Chain

12. Synthetics

13. Launchpads

14. Indexes

15. Liquidity managers

16. Insurance

17. Privacy

18. Algorithmic Stablecoins

19. Payments

20. Leveraged Farming

21. NFT Marketplace

22. NFT Lending

23. Staking Pools

24. Options

25. Options Vault

26. Prediction Markets

27. Decentralized Stablecoins

28. Farms

29. Uncollateralized Lending

30. Reserve Currency

31. Real World Assets Lending

32. Gaming

33. Oracles

Over the next few posts, we will be covering these 33 types of protocols.

1. Liquid Staking Protocols

Liquid staking is a mechanism allowing cryptocurrency holders to participate in network security and consensus, while also providing liquidity.

It involves tokenizing staked assets and creating liquid tokens that represent the staked assets and can be traded or used in other protocols.

This solves the issue of staked assets being illiquid, giving holders more flexibility and encouraging more participation in staking.

Benefits include increased liquidity, enhanced yield opportunities, and broader protocol engagement.

• No. of protocols: 118

• Combined TVL: $20.4 billion

The Top 3 protocols by TVL are:

• Lido ($13.9 billion)

• Coinbase Wrapped Staked ETH ($2.1 billion)

• Rocket Post ($1.7 billion)

2. Lending Protocols

Lending protocols in the DeFi ecosystem allow users to borrow and lend assets without the need for traditional financial intermediaries.

They operate on smart contracts on blockchain platforms. Borrowers provide collateral, often exceeding the borrowed amount, ensuring security for lenders.

Interest rates are usually algorithmically determined based on supply and demand dynamics.

• No. of protocols: 299

• Combined TVL: $ 13.3 billion

The Top 3 protocols by TVL are:

• AAVE ($4.5 billion)

• JustLend ($3.7 billion)

• Compound Finance ($1.9 billion)

3. Decentralized Exchanges

Decentralized Exchanges (DEXs) facilitate peer-to-peer trading of cryptocurrencies without relying on a centralized authority or intermediary.

DEXs utilize smart contracts to automate and manage trades, providing users with custody of their funds.

This structure enhances security as users are not required to transfer their assets to the exchange.

• No. of protocols: 1005

• Combined TVL: $ 11.6 billion

The Top 3 protocols by TVL are:

• Uniswap ($3.2 billion)

• Curve DEX ($2 billion)

• PancakeSwap ($1.35 billion)