Trader Joe and a huddle of penguins bring hoardes of DeFi users to Avalanche

The rise of high-yield, low-cost DeFi on Avalanche is bringing a new wave of capital ahead of the much-anticipated second phase of Avalanche Rush

Layer-1 blockchain Avalanche has become the latest destination for DeFi enthusiasts seeking high yields and low costs, thanks to the emergence of an array of DeFi platforms taking advantage of $180m incentive program Avalanche Rush.

The Layer-1 solution, which is seeking to tackle the issue of scalability whilst maintaining a decentralised nature, was launched in September 2020 by the Ava Labs team and has since gone from strength to strength in its pursuit of eating into Ethereum’s considerable market share of the DeFi markets.

Avalanche has since emerged as a leading DeFi provider in the crypto space due to its minimal fees, instant transaction finality and an array of DeFi platforms including Trader Joe, Penguin.Finance, BENQI and Pangolin to provide high yields and asset gamification.

The blockchain has benefitted greatly from Avalanche Rush incentives and provided a bullish catalyst for AVAX  as it reached a recent high of $64. The incentive program also prompted a surge in the Total Value locked (TVL) on Avalanche. According to data from DeFiLlama, The Avalanche DeFi ecosystem currently has $2.35bn in Total Value Locked (TVL) – more than a 700% increase since the introduction of the incentive program.

Easy access for everyone

Avalanche has recently introduced a number of tools to help users easily bridge and withdraw their AVAX from exchanges and Web3 wallets including the native Avalanche bridge and integration with Binance that allows users to withdraw their AVAX tokens directly to a Web3 wallet address on the C-Chain.

The appeal of high yields is enough to attract even the most novice crypto user to a DeFi platform, but the experienced have ‘bridged’ over and fully exploited the first wave of Avalanche Rush incentives.

The introduction of the bridges, which has spawned a number of memes from the Avalanche community, provided DeFi users with a quick and easy way to bridge their Ethereum and stablecoins to use on the AVAX ecosystem.

Early ‘bridgers’ have even been rewarded in the form of an airdropped token named Good Bridging, much to the delight of the community as, when it was distributed, the drop was worth more than $2,000.

The appeal of Avalanche is further compounded by its innovative user interfaces that feature on the majority of projects, making the blockchain the ideal place to start learning the intricacies of DeFi and yield-farming. Low fees and a pleasant user experience also accompany Avalanche projects – a far cry from the higher fees and slower speeds that plague some Ethereum-based projects.

Interestingly, Avalanche doesn’t view its blockchain as a competitor to Ethereum or other Layer-1 platforms. Bosses noted that they view the project internally as “the Internet of Finance”, with competing virtual machines being a component of the network.

This makes Avalanche a useful starter platform for both beginner and experienced DeFi users seeking a cleaner, more intuitive user experience.

The rise of DeFi on Avalanche

The spate of DeFi platforms that reside on the Avalanche ecosystem all offer novel DeFi products including yield farming, liquidity pools, single-sided staking, NFTs and launchpad offerings for newly-released tokens. Many of the platforms have already benefitted from Avalanche Rush incentives that can offer desirable yields and incentivised participation in pools.

The most popular DeFi platforms on Avalanche, according to DeFiLlama, are BENQI, Trader Joe and Pangolin.

In homage to Ethereum-based DeFi and Aave’s dominance, the superiority lies with the lending and borrowing platform BENQI, which benefitted from $3m worth of Rush Incentives. The platform offers simple, high-yield lending and borrowing services for assets such as AVAX, WBTC, WETH and an array of stablecoins. The protocol currently secures $1.14b in assets, with further growth expected during the second phase of Avalanche Rush.

Trader Joe and Pangolin can be compared to the UniSwap and SushiSwap of Avalanche, with both offering DEX services alongside an array of yield farming and liquidity mining products. Pangolin was the first major DEX to be launched on Avalanche and has since been dubbed the “UniSwap of Avalanche” due to its familiar user interface and first-mover status.

Conversely, Trader Joe features a brighter, more appealing user interface and similar products to SushiSwap. It comes with the tagline “One-Stop Decentralised Trading on Avalanche” and boasts an array of products that enables users to access high yield farms, liquidity pools and staking options from its native token, JOE.

Trader Joe remains an integral part of the burgeoning AVAX ecosystem and regularly hosts collaborations with other platforms to form ‘friendships’, bolstering its reputation as a leading community token on Avalanche.

Trader Joe also recently secured $5 million in a private token sale, with the funds being allocated to staff expansion and further growth of the platform.

Another notable mention is Penguin.Finance, a platform offering high-yield pools, farms and gamification in the form of the ‘Arena’. The Arena will be a novel “Penguin Emperor” game with fully customisable characters and different game modes, a fun and friendly alternative to simply farming your assets.

Leading DeFi platforms Aave and Curve are the next in line for incentives on Avalanche during the second phase of the Rush event, which is rumoured to be released on September 22 according to tweets from co-founder Kevin Sekniqi.

Avalanche has allocated up to $20M AVAX for Aave users and $7M AVAX for Curve users, providing a real incentive for users to bridge over and use their AVAX to earn from the generous liquidity incentives.

Additionally, leading DEX Sushiswap has plans to launch its version of incentives on Avalanche soon. Looking to be part of the second wave of Avalanche Rush, both SushiSwap and the Avalanche foundation will allocate $7.5M of liquidity mining incentives over a three-month period. Another DEX, Paraswap, also recently announced its involvement in the incentive program.

Catering to all audiences

Avalanche also has its fair share of meme tokens and NFTs for those disinterested in DeFi platforms in the form of apes, dogs and various other colourful characters.

Meme tokens Ape-X, Husky AVAX and ShibavaX all fit the bill for those interested in the fun communities on Discord and Telegram and the topsy-turvy price action that accompanies meme tokens. The draw of incredible profits in these tokens is often intoxicating, leading to rampant interest from first-time ‘retail’ DeFi users of the Avalanche ecosystem.

Aspiring “jpeg” collectors and NFT fans can choose from AVAX Apes, AVAX CatsAVAX Punks and card-game HeroesOfNFT alongside an array of other fun and “innovative” NFT projects. NFT platform Kalao – a VR metaverse platform that will enable NFT galleries and displays – is also being launched soon.

Despite its tender age and relative infancy in the crypto ecosystem, Avalanche has proven itself as a viable platform for DeFi enthusiasts to sharpen their skills and learn the ins and outs of the ever-expanding DeFi ecosystem.

With further incentives in the pipeline and consistent growth and development from the team, Avalanche is on the right path to becoming the go-to blockchain for affordable, innovative and user-friendly DeFi platforms.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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