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Algorand DeFi - The 3 Pillars
The Algorand DeFi ecosystem is sustained and bolstered by the three DeFi Pillars of Algorand. Fundamentally, it's about assuring the sustainable growth of the ecosystem in the long-term, which is why the Algorand Foundation have invested heavily in supporting the main actors of each 'pillar'. In this article we cover the 3 most important DeFi projects on Algorand.
The 3 Algorand DeFi Pillars are defined by the the Algorand Foundations in Aeneas Program, which goal is to set the base for a flourishing Algorand DeFi ecosystem. The pillars and their main contributors are the following:
- Robust Bridges for Newcomers - Algomint
- Automated Market Maker DEXs for Traders & Merchants - Tinyman
- Borrowing & Lending Platform for Capital & Commerce - AlgoFi
💡Pro Tip 💡
You'll need to have an Algorand Wallet installed on your phone in order to engage with the Algorand DeFi ecosystem (including Tinyman, AlgoFi and Algomint). Check out the AlgoDaddy Pera Algo Wallet Guide to read more about it and learn how to set it up.
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Website - Algomint
2. Tinyman
Tinyman is the first decentralized exchange (DEX) created for ASA tokens on Algorand. It launched on 7th of October 2021. They've excelled at what they do and delivered an all around great application (apart from a bit of a hiccup in beginning). The Tinyman launch definitely lead to a more accessible ecosystem and a more engaged Algorand community overall. It's without a doubt that Tinyman is one of the most important tools in the Algorands ecosystem. It allows liquidity pools to be formed between Algorand and different ASAs, or even between the ASAs themselves. As a result you don't really need a token to be listed on an exchange in order to trade it.
In addition, users and developers can set up their own liquidity pools for token pairs previously not existing. Not only that, but all of this is provided by Algorands underlying secure, cheap and fast protocol. Due to this, those using the Algorand blockchain were now able to freely trade the popular Algorand tokens (HDL, DEFLY, USDC and others) as well as bolstering the creations of community tokens, some which rose in popularity very quickly (for example the Akita Inu Token).
Tinyman is the first decentralized exchange (DEX) created for ASA tokens on Algorand. It launched on 7th of October 2021. They've excelled at what they do and delivered an all around great application (apart from a bit of a hiccup in beginning). The Tinyman launch definitely lead to a more accessible ecosystem and a more engaged Algorand community overall.
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Website - AlgoFi
AlgoFi was one of the most anticipated additions to the Algorand ecosystem of 2021. It have had a similar impact to what Tinyman have had on the Algorand ecosystem, but of course in it's own unique way. It is the first borrowing and lending platform on Algorand. Additionally it provides an Algorand-native stable coin, known as STBL.
AlgoFi went live on the Algorand mainnet December 17th 2021 after several months on the test-net. It was audited by Runtime Verification for security purposes. Tinyman raised over $2.8 million USD before launch, having financial backing from Arrington XRP Capital, Union Square Ventures, and others. It was founded by Owen Colegrove & John Clarke.
In the future AlgoFi is planning to offer more classical banking services, such as credit cards and savings accounts, which would be powered through Algorands rapidly growing ecosystem.
Lending is especially important for the Algorand ecosystem, as it allows leveraging of investment and accessibility of funds to key-players and everyday users alike. Thus you can potentiate your investments, or contribute to the TVL by lending your Algorand on AlgoFi.
During 2022 a fresh contestant showed up, namely Folks Finance, which turned out to be AlgoFi's top rival in the Algorand lending game at the moment.
During 2022 a fresh contestant showed up, namely Folks Finance, which turned out to be AlgoFi's top rival in the Algorand lending game at the moment.
💡 Algorand DeFi Utility💡
Learn more about the vast ecosystem of Algorand over in this article, where I have listed most of the available Algorand apps, networks, games and other utilities.