After having hesitated for a while, you have finally decided to put your coins into a DeFi (Decentralized Finance) AMM (Automated Market Maker) protocol in order to earn farming yield rewards.
However, you still do not know where to go. There are so many blockchains availalable now for DeFi:
- 36 blockchains are listed on Defi Llama
- Among them, Ethereum is by far the first one in TVL (Total Value Locked), with $131 billion, followed by Binance with only $19b, and then the growing outsiders: Terra, Polygon, Solana, Avalanche, Klaytn, Fantom...
Let's focus on the outsiders of which the TVL has grown over the last 7 days:
- Fantom got the biggest TVL growth: +60% over the last 7 days, wheras the FTM coin has grown by +134% at the same time... Despite this spectacular growth, their TVL is only $1.21 billion, i.e. less than 1% of Ethereum TVL. As they are promoted by Andre Cronje himself and have been developed by a team who previously worked on Ethereum, with similar functionalities but much lower gas fees, there is still room for growth
- Solana has grown by +57% in the same time frame. Quite spectacular as well. Their TVL is $5.04 billion. Therefore, there is theoritically less room for growth than on Fantom
- Avalanche has only grown by 13% in the same timeframe, despite very attractive yields on Pangolin and Trader Joe, and their lending platform Benqi, which allows to get attractive rewards by lending, borrowing, lending again... As the TVL of Avalanche is $2.32 billion, i.e. less than half of Solana, there is still room for growth. Furthermore, it is more decentralized...
- Polygon has only grown by 9% with a TVL of $5.24 billion i.e. similar to Solana. They are probably suffering from an erosion of the interest, and it might be challenging for them to compete vs the other options
What's next:
- Tezos TVL has grown by +195% over the last 7 days but is still very low compared to the other ones: only $116.87 million. Therefore, it might be a good bet for the future, for instance with the Plenty DeFi AMM (still Beta)
- Cardano smart contracts and DeFi protocols are expected by everyone with the Alonzo update... However, the recent launch of Minswap (that I have tried myself... unsuccessfully) has been confusing and hence there is now some FUD...
In summary, it might be worth playing with the following chains: Avalanche, Solana, Fantom... and Tezos for the longer term. However, please DYOR and be aware that everything can crash if Gensler and his colleagues from the SEC suddenly decide to stop the music.
