Categorization Of DEFI Blockchains
Every week, new blockchains are built and a large number of new DEFI applications running on them are launched. As in other areas of crypto, there is an exciting dynamism.
The first blockchain to be considered by someone who wants to map the DEFI world will undoubtedly be Ethereum. After all, the DEFI concept was developed on the Ethereum network, and in the early days of 2021, 97% of all DEFI assets were located on the Ethereum network. Later, the BSC and Polygon networks using the Ethereum Virtual Machine (EVM) came into play. The Avalanche and Fantom networks followed. Currently, EVM compatible networks constitute the largest category in the DEFI field. Ethereum's share of total value locked in the DEFI field is 54%. BSC, Avalanche, Fantom and Polygon hold 6%, 5%, 3% and 2% respectively.
Photo by Clément Hélardot on Unsplash
The fact that a network is EVM compatible provides the user with the convenience of using all of these networks with a single Web3 wallet. In addition, money can be transferred between more than 20 EVM compatible blockchains using the Multichain application. Transfers are finalized in like 10 minutes and cost around $1. The liquidity is limited and it is not the safest way to transfer money, but it is fine.
The Cosmos ecosystem is another group. Terra is currently the largest in this ecosystem with a 13% total value locked(TVL) market share. Specializing in algorithmic stable coins, Terra is second in all blockchains. Other notable Cosmos-based DEFI blockchains are Cronos, Osmosis, Kava, and Thorchain. Coin transfers between Cosmos blockchains are handled via IBC. Unlike transfers between EVM blockchains, these transfers result in a few seconds and I suppose it is safer.
Polkadot, another Layer 0 blockchain similar to Cosmos, has recently started to make its presence felt in the field of DEFI. Primer and Parallel stand out among Polkadot-based blockchains. Moonbeam is a blockchain that claims to bring together the Ethereum ecosystem and the Polkadot ecosystem. On the Cosmos side, Kava has a similar mission. If a blockchain that brings Kava and Moonbeam together is produced, the crypto world will become largely interconnected :)
Apart from Ethereum, Cosmos, and Polkadot, blockchains with their own unique infrastructures are of course not missing. The most popular of these is Solana, with a 3.4% TVL market share. The downside of Solana, which I like to use because of its fast and low-cost transactions, is that it is not part of a blockchain family. Using Solana requires setting up a separate wallet and transferring funds to other blockchains is impractical.
With its unique infrastructure, Tron is one of the DEFI blockchains with a significant market share. Tron's transaction fees are well above average.
Although not widely known outside the community, Hive is also one of the important DEFI chains. Beeswap operating on Hive is a viable alternative with its free transactions, satisfactory returns, and access to major coins such as Eth, BSC, BNB, LTC, SPS, Leo, and Matic.
Apart from the ones I mentioned above, there are many blockchains that host DEFI transactions. Defillama currently lists 85 DEFI blockchains.
In addition to Hive, I use BSC, Polygon, Thorchain, and Osmosis blockchains in my investments. But if I come across an attractive value proposition, I can use other blockchains. Popular chains in DEFI change every three months, maybe Hive will join the popular DEFI chains in the coming months.
Thank you for reading.
Posted Using LeoFinance Beta