Image Source: Mars Finance
DeFi 3.0 is gradually taking shape, with several cutting-edge projects leading this wave of technological innovation. Projects like $HYPE, $PENDLE, and $INST are bringing revolutionary changes to DeFi, enhancing liquidity, efficiency, and user experience. We are about to welcome a brand new decentralized finance world.
I. DeFi 1.0: Movement of Liquidity
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The core focus of DeFi 1.0 is the migration and management of liquidity, emphasizing how to move capital and liquidity in a decentralized environment. Here are some landmark projects:
Lending: Aave ($AAVE), Compound ($COMP)
Automated Market Makers (AMM): Curve ($CRV), Uniswap ($UNI), SushiSwap ($SUSHI)
Compound Interest: Yearn.Finance ($YFI)
These projects laid the foundation for the first wave of DeFi, driving widespread adoption of decentralized finance.
II. DeFi 2.0: Efficiency of Liquidity
DeFi 2.0 shifts the focus to enhancing liquidity efficiency, aiming to make capital utilization more efficient and incentive mechanisms more attractive through innovative mechanisms and protocols. Typical representative projects include:
Incentive Mechanisms: OlympusDAO ($OHM), Tokemak ($TOKE)
Composability: Abracadabra ($SPELL)
The emergence of DeFi 2.0 has helped solve the issues of capital efficiency and liquidity stagnation, driving the deep development of decentralized finance.
III. DeFi 3.0: Accessibility of Liquidity
DeFi 3.0 will focus on the accessibility of liquidity, emphasizing user experience (UX) and low transaction fees. The core idea of DeFi 3.0 is to allow users to more easily enter the world of decentralized finance, rather than just optimizing liquidity and efficiency.
Pioneering projects of DeFi 3.0 include:
HyperliquidX
Pendle
Ethena Labs
Fluid
Peapods Finance
Babylon Labs / Lombard Finance
Other innovative projects include: KaitoAI, Pumpdotfun
These projects are driving the growth of DeFi 3.0, optimizing the accessibility of decentralized finance, and providing users with lower transaction costs and more convenient operational experiences.
IV. HyperliquidX: Efficient Perpetual DEX and Layer 1
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HyperliquidX, led by Chameleon Jeff and King Julian, is an efficient perpetual trading DEX and Layer 1 platform. HyperliquidX offers extremely high capital efficiency (CPV), with the current annualized return rate (APR) close to 40%. This platform is not only an ideal place for capital arbitrage but also offers substantial returns to early investors through airdrops.
HyperliquidX is laying the foundation for the next phase of the decentralized finance market, becoming a focal point for investors.
V. Pendle: An Innovative Platform for Fixed Income
Pendle, founded by TN Pendle, is a yield platform that allows users to invest through fixed-rate and fixed-date yield products. Pendle offers leveraged yield exposure, providing users with more diversified investment options, especially for liquidity providers and long-term holders.
Pendle recently launched PendleSwap, a feature that further enhances its competitiveness in the DeFi market, making it a leader in the yield management industry.
VI. Ethena Labs: Expanding Functionality of Yield Stablecoins
Ethena Labs aims to expand its yield stablecoin $sUSDe to $5 billion, offering a 27% annual yield. This yield comes from funds and basis spread. Ethena Labs' stablecoin has already been launched on mainstream platforms like Bybit, symbolizing the breakthrough of decentralized stablecoins in traditional trading platforms.
This achievement demonstrates the potential of decentralized stablecoins and positions Ethena Labs as one of the leading projects in DeFi 3.0.
VII. Fluid Protocol: Optimizing Liquidity Utilization
Fluid Protocol, launched by Instadapp, allows users to earn an annualized return rate (APR) on liquidity collateral and debt. The protocol increases the utilization of liquidity, improving capital efficiency in lending and leveraged trading. Fluid's innovations not only bring new opportunities to the lending market but also further optimize the capital allocation of DeFi by transforming leveraged traders into liquidity providers.
Fluid is one of the key projects in DeFi 3.0, promoting the capital utilization efficiency of the decentralized financial system.
VIII. Peapods Finance: On-Chain Arbitrage Yield Generation
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Peapods Finance allows users to conduct on-chain arbitrage using a single asset by creating bi-directional liquidity pools and leveraging flash loans for this income. Peapods innovatively utilizes flash loan technology, enriching the arbitrage opportunities in decentralized finance and providing users with a new way to earn.
Peapods is a leader in DeFi 3.0, promoting further development of the decentralized finance market through innovative liquidity pools and arbitrage mechanisms.
IX. Babylon Labs / Lombard Finance: New Options for Fixed Income
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Babylon Labs and Lombard Finance are complementary in DeFi 3.0, akin to ‘bread and butter.’ Both offer fixed-rate returns and focus on yield generation from assets like Bitcoin. These yields are typically obtained through protocols like Pendle, providing users with more stable investment returns. The two companies will also launch airdrop events to further attract liquidity providers and investors.
The combined development of these two projects makes the yield management mechanisms of DeFi 3.0 more diversified, providing investors with more opportunities for fixed returns.
X. Virtuals.io: AI Agents and Cross-Platform Interaction
Virtuals.io, founded by Ethermage and Everythingempt0, aims to interact across multiple platforms through AI agents. These agents represent each agent as an on-chain entity through the ERC6551 protocol, with full control of the wallet. The goal of Virtuals is to enable AI agents to interact on platforms like X and TikTok while maintaining consistent memory and operations across different platforms.
The innovative design and modular architecture of Virtuals make it a highlight of DeFi 3.0. It opens up new horizons for the combination of decentralized finance and artificial intelligence.
XI. Other DeFi 3.0 Protocols Worth Watching
In addition to the aforementioned projects, there are other potential projects in DeFi 3.0 that investors should pay attention to:
KaitoAI
Pumpdotfun
ModeNetwork
Pear Protocol
GammaSwapLabs
EefiFinance
Asymmetryfin
MorphexBMX
BaselineMarkets
Solve3fi
These projects demonstrate the innovations of DeFi 3.0 across multiple industries, including artificial intelligence, liquidity pools, and yield optimization, which may further promote the development of the decentralized finance ecosystem in the future.
Summary
The arrival of DeFi 3.0 symbolizes a new round of revolution in the decentralized finance ecosystem. With the rise of projects like HyperliquidX, Pendle, and Ethena Labs, we see deep optimizations in liquidity, efficiency, and user experience in decentralized finance. These projects not only drive the development of DeFi but also provide new opportunities and choices for investors, opening a new chapter in decentralized finance.
Disclaimer: This article does not constitute investment advice. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances and comply with relevant laws and regulations in their countries and regions.
This article is authorized to be reprinted from: (MarsBit)
Original author: X, @belizardd
‘DeFi 3.0 is coming! The next generation of decentralized finance: 3 major projects bring amazing innovations’ was first published in ‘Crypto City’
