DeFi has had an insane coming out party over the last year and a half. Going from just under $700 million Total Value Locked (TVL) in January of 2020 to over $140 Billion TVL according to Defi Llama. However, this has not come without it's share of growing pains. Due to the popularity of DeFi applications, gas fees on Ethereum-based networks have skyrocketed. What used to cost in gas fees $2-3 to swap and $10-20 to perform smart contract interactions - has ballooned to $30-$500+ to perform the same interactions.
Not to mention the large knowledge barrier many of the most popular DeFi protocols face. Most newcomers to Crypto simply don't understand the purpose of DeFi or how it works. Not only do they have to setup an additional wallet (ie MetaMask), separate and away from the one that likely introduced them to Crypto (Coinbase, Robinhood, etc.), they also need to enable it with the exchange, pay the gas fees then finally get involved in either providing liquidity or swapping for the token they wanted. This is all a piece of cake for those of us that have been involved in Crypto for a long period of time, but newcomers can certainly struggle.
Well in comes Defibox and the EOS blockchain they're built on. Due to the way the EOS ecosystem has developed, many of the first wallets newcomers get introduced to when coming to EOS (Wombat, TokenPocket, etc.), are specifically designed with DApp browsing and ease of use in mind. Then due to how EOS operates and the feeless nature, it can certainly help ease many of the initial frustrations and misunderstandings newcomers have. But before I get too ahead of myself, let's get into Defibox, one of the DeFi applications I'm most excited about today.
What is Defibox?
You could probably guess by now but Defibox is an Automated Market Maker (AMM) based Decentralized Exchange built on EOS. Launched in July of 2020, Defibox is part of the Newdex Seed program, a program that is used to promote the incubation and development of EOS-based DeFi protocols. Despite it's young age, Defibox has already positioned itself as the top dawg of EOS-based DeFi protocols with $195 million TVL. Defibox operates similarly to how typical AMM's do with a few extra benefits.
- Decentralized Token Swap with Liquidity Provision
- Decentralized Stablecoin Generation with USN (more info here)
- Decentralized Lending
According to their V3.2 Whitepaper (found here), they are also working on launching a "satellite protocol" to help with the functionality of the three protocols I listed above as well as cross-chain compatibility and other protocols such as derivative trading and traditional financial asset trading.
Defibox, much like many AMM DEXs today have their own token, BOX, which can be used to vote on features/changes to the Defibox platform.
BOX can be mined by providing liquidity, USN mining and Decentralized Lending mining. I currently hold a small amount of BOX that I've mined from providing liquidity to the EOS-USN pair. I'm pretty happy with the returns so far and will likely increase my holdings there.
Why I Use Defibox
Several of my co-workers recently got involved in crypto. They asked me all the typical questions - what wallet to get, where should I buy my crypto, when should I jump in the market and how. I answered them all willingly but as soon as I tried to tell them about DeFi I could see their eyes start to glaze over. They already had a hard enough time understanding cryptocurrency as it were and the thought of applications being built on a blockchain was just too much.
I tried to show them the most popular AMM/DeFi platforms in Uniswap or SushiSwap but they just couldn't get it. There was already too much info getting thrown at them. That's where I believe the value of the EOS ecosystem and Defibox come into play. There are no extra steps to complete or seemingly complicated wallet to download. Once someone downloads either Wombat or TokenPocket they can navigate through the built-in dapp browser to explore the DeFi apps at their own leisure and test them out without getting completely burned by gas fees. The EOS ecosystem, whether purposefully or not, was built with newcomers in mind and that in and of itself is one of it's greatest strengths. That is why I'm very bullish on Defibox.
Now don't get me wrong, they also have a very strong whitepaper and roadmap. Interoperability and more types of asset trading I believe are the future of DeFi. But with rising crypto adoption rates and increased interest in crypto as a whole, the next wave of people to jump in are going to be looking for the easiest place to get a return on their investment. With the addition of the satellite protocol and additional types of asset trading, I believe that place could be Defibox.
Thanks for reading, if you enjoyed don't forget to drop a follow and like so I know to write more. And for the obligatory "I'm not a financial advisor", duh I'm not a financial advisor, please Do Your Own Research. Happy earnings!
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