How to earn passive income with DeFi? Rule #3: Choose the right chain

By Bfab | Good vibes | 2 Sep 2021

Altough DeFi seems the best way to earn passive income, some basic rules have to be respected:

1) Avoid the rug pulls and exit scams

3) Choose the right chain

Let's focus on the item #3 (figures in USD from Defi Llama)

Fantom:

Solana:

Avalanche

TVL: $2.2b
7 day change: +27%
Dominating AMM protocol: Trader Joe (Benqi is the first protocol, but not an AMM)
Is this protocol audited: No (a safer option is Pangolin, which is a fork of Uniswap and hence considered as audited)

Fantom has significantly grown over the 7 last days, and as its TVL is still much lower than Solana and Avalanche, could grow higher.

Let's look now at the fundamentals of these chains:

Fantom:

TPS: 300,000 (claimed by Fantom Foundation... seems very high, and not really true according to my user experience)
Decentralization level: should be high in theory, but is still low in practice, since setting up a node is expensive
Specificities: Andre Cronje, the creator of Yearn.Finance, is part of the team behind Fantom

Solana:

TPS: 50,000
Decentralization level: should be high in theory, but is still low in practice, since they still need more validators to deploy the network
Solana claims to offer the same transaction speed as a centralized network on a really decentralized blockchain, which could be true in the future

Avalanche:

TPS: 4,500
Decentralization level: "Thousands of nodes" (claimed by Avalanche, which seems to be true - Avalanche is a really decentralized network)
Avalanche uses several chains: as the C-Chain is an instance of the Ethereum Virtual Machine (EVM), it is quite convenient for Solidity developers

Conclusion:

In the short term, Fantom chain is a good bet, since the TVL is still low and could go much higher, leading the FTM coin to grow too
Avalanche and Solana are both excellent long term options, although they might face competition from ETH 2.0, Cardano, Polkadot, Harmony...

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