Since its launch in late 2021, the Cardano DeFi ecosystem has undergone significant evolution, establishing a robust and dynamic landscape. It has bootstrapped its own liquidity and advanced from the early days of Plutus V1 to the cutting-edge Aiken, enhancing transaction efficiency and throughput. With the impending arrival of Plutus V3, Cardano’s DeFi capabilities are set to expand even further. This article examines a variety of protocols within Cardanos Decentralized Finance ecosystem, including DEXs, synthetic assets, and lending platforms, as well as some promising upcoming protocols.

Decentralized Exchanges

Cardano’s decentralized exchanges (DEXs) have been pivotal in driving the ecosystem’s growth, offering secure and efficient trading platforms. In this section, we’ll delve into the unique features and innovations of these DEXs.

Minswap

Minswap, the first multi-pool DEX on Cardano, launched on March 8, 2022. As a community-driven platform, it has significantly contributed to the ecosystem’s development by enhancing trading capabilities. With Minswap V2 on the horizon, written in Aiken, users can look forward to substantial speed and throughput improvements. Additionally, the new version will introduce advanced pro features, a revamped UI, and more enhancements.

You can find out more about Minswap here.

Splash

Splash, one of the most recent decentralized exchanges (DEXs) to launch on Cardano, is known for its next-generation approach to market-making and trading. It combines various AMM liquidity pools with its unique Temporal Liquidity Book (TLB), offering traders the best prices and market makers the flexibility to provide liquidity efficiently. Recently, Splash introduced a new UI and onboarded Splash partner liquidity, marking the launch of stablepools with the OADA/ADA pool.

You can visit the Splash DEX and check out the project’s new UI here: https://app.splash.trade/

SundaeSwap

SundaeSwap, launched on January 20, 2022, is the first automated market maker (AMM) style DEX on Cardano. Recently, SundaeSwap introduced V3, which brings enhanced throughput and a wealth of new features. This upgrade has significantly boosted its performance, making it responsible for a large portion of the daily trading volume on Cardano.

You can find out more about Sundaeswap at the following link: https://sundae.fi/products/sundaeswap

Yield Protocols

Yield products in the Cardano ecosystem offer lenders the opportunity to earn higher returns compared to native staking. Borrowers, on the other hand, can gain staking power to earn rewards and participate in ISPOs.

Fluid Tokens

FluidTokens is a DeFi platform on Cardano, offering a variety of innovative financial services. These include boosted staking, lending, and renting. Boosted Stake allows users to maximize their ADA staking rewards and participate in ISPOs by lending or borrowing ADA delegation rights.

You can visit the FluidTokens website at the following link: https://fluidtokens.com/

Optim Finance

Optim Finance is a yield protocol on Cardano, offering innovative products designed to optimize capital allocation. Its initial offerings include Liquidity Bonds and Strategy Vaults, which enable users to lend and borrow ADA staking rights and participate in automated investment strategies. In July 2024, Optim Finance launched OADA, an ADA derivative, and SOADA, a staked ADA derivative.

More information about Optim Finance can be found here: https://www.optim.finance/

Lending Protocols

Lending protocols in the Cardano ecosystem come in various forms, such as pooled and peer-to-peer, offering flexible options for both lenders and borrowers.

LenFi

LenFi, initially launched as Aada Finance on September 13, 2022, was the first lending protocol on Cardano. It introduced peer-to-peer lending to the ecosystem. Recently, LenFi launched V2, which brings pooled lending and borrowing, written in Aiken for higher throughput.

The LenFi website can be found here: https://lenfi.io/

Levvy Finance

Levvy Finance, a peer-to-peer lending protocol on Cardano, launched on June 23, 2023. The protocol allows NFT and fungible token owners to access instant liquidity by using their assets as collateral. Recently, Levvy Finance was acquired by Angel Finance, a decentralized venture capital entity within the Cardano ecosystem.

You can visit Levvy Finance at the following link: https://levvy.fi/

Liqwid Finance

Liqwid Finance, the first pooled lending protocol on Cardano, initially launched in Q4 2021. The recent launch of Liqwid V2 introduced significant enhancements, including Aqueduct for improved liquidity management, Tap for optimized transaction building, a new API for better developer integration, and a more user-friendly interface

Find out more about Liqwid here: https://liqwid.finance/

Yamfore

Yamfore is a decentralized non-custodial lending protocol on Cardano. It allows users to borrow ADA by depositing collateral without the risk of liquidations or ongoing interest payments. Yamfore uses over-collateralization and provides flexible loan terms, making it a user-friendly option for crypto-backed loans on the Cardano blockchain.

After the recent launch of Optim with the OADA — sOADA mechanism, and the upcoming launch of Butane, we believe that Yamfore, with its particular characteristics, comes to join this new wave of DeFi protocols that will improve and complement what already exists in Cardano. — Diegomac | Yamfore Community Advisor

You can visit the Yamfore website at the following link: https://www.yamfore.com/

Synthetic Protocols

Synthetic assets in the Cardano ecosystem offer exposure to various financial instruments without direct ownership. This section delves into the platforms providing synthetic assets on Cardano.

Butane

Butane is a next-generation, multi-collateral synthetic protocol on Cardano. Designed for high efficiency and throughput, it leverages the Aiken programming language to allow users to create multiple Collateralized Debt Positions (CDPs) within a single transaction. Currently, Butane is on testnet, with a mainnet launch anticipated soon.

“I’m excited to have the community using Butane soon and hope together to usher in a new era of synthetics on Cardano” — Dubbleu | Butane Community Manger

More information about Butane Synthetics can be found here:

https://butane.dev/

Indigo

Indigo Protocol, launched in November 2022, is the first synthetic assets protocol on Cardano. It allows users to create and trade synthetic assets, known as iAssets, which mimic the value of real-world assets such as iUSD (a stablecoin), iBTC (Bitcoin), and iETH (Ethereum). By using Collateralized Debt Positions (CDPs), users can mint these iAssets by collateralizing ADA, enabling them to engage in DeFi activities without losing out on staking rewards

The Indigo Protocol website can be found here: https://app.indigoprotocol.io/

Stablecoins

Stablecoins in the Cardano ecosystem provide price stability, crucial for transactions and DeFi activities.

Djed

Djed is an overcollateralized algorithmic stablecoin on Cardano, issued by COTI. It maintains stability by holding a reserve of ADA and using SHEN as the reserve currency, ensuring a reliable stable value for DeFi applications on Cardano.

More info on Djed can be found here: https://www.djed.xyz/

MyUSD

MyUSD is a decentralized stablecoin on Cardano, created by the Mynth team. It maintains its peg through various strategies, including the minting and burning of MyUSD, providing a secure and stable cryptocurrency option for participants in the Cardano ecosystem.

You can read more about MyUSD here: https://www.mynth.ai/

USDM

USDM is a fiat-backed stablecoin on the Cardano blockchain, developed and issued by Moneta, previously known as Mehen. Pegged to the US dollar, it provides a stable value for transactions and savings within the Cardano ecosystem.

You can read more about USDM at the following link: https://mehen.io/

Conclusion

Cardano’s DeFi ecosystem has grown remarkably since its inception, showcasing a wide array of protocols from DEXs to synthetic assets and lending platforms. With continuous advancements and the introduction of new protocols, the ecosystem is becoming more robust and dynamic. It will be fascinating to observe how Cardano’s Decentralized Finance landscape continues to evolve and innovate in the weeks and months ahead.