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The Top Base Chain DeFi Projects of 2024 - A Farmer's Guide

Daniel Urbánek
Daniel Urbánek
April 06 at 02:32
Education, Project Spotlights, Base

Uncover the forefront of DeFi innovation on Base Chain with a deep dive into its best projects. Explore what makes these initiatives the top picks for crypto enthusiasts.

The Base L2 network created by Coinbase has been one of the fastest-growing EVM ecosystems of 2024. This article aims to shed light on the best projects in each category on Base Chain, providing crypto degens and enthusiasts with detailed insights into the unique features and propositions that set these initiatives apart. We will cover every major DeFi service category ranging from DEXs to leveraged farming platforms.

TL;DR:

  • Coinbases Base chain is one of the fastest growing Ethereum ecosystems and home to a plethora of innovative DeFi applications.
  • To create a thriving DeFi ecosystem it is often necessary to host the following core categories of services: DEXs, Lending, CDP, and Crosschain.
  • An expanding ecosystem might benefit from: farming platforms, derivatives exchange, RWA tokenization platforms, and social services.
  • Below you will find a list of these apps that are getting traction right now on Base.

A Simple and User-Friendly DEX: Aerodrome Finance

Aerodrome Finance ($AERO) positions itself as a next-generation Automated Market Maker (AMM) on the Base chain, envisioned to be the central liquidity marketplace. It integrates the best aspects of prominent DeFi protocols such as Curve, Convex, and Uniswap, aiming to offer an innovative trading and liquidity provision experience.

Core Features and Mechanics:

  • Low Slippage & Fees - Tailored to provide low slippage for traders, coupled with competitive fee structures to enhance user experience. 
  • AERO Emissions - Utilizes its ERC-20 utility token, $AERO, to incentivize liquidity providers (LPs) through token emissions, awarded proportionally based on votes accumulated by pools.
  • Vote-lock Governance - Implements a vote-lock governance model, allowing $AERO holders to lock their tokens in exchange for $veAERO (ERC-721 governance token).

Dynamic CDP Protocol - Overnight Finance

Overnight Finance ($USD+) stands out as the most popular CDP (Collateralized Debt Position) platform on Base. It is focused on offering a variety of yield-generating opportunities through its core product offerings. It's designed to evolve continuously, adjusting its services and features to meet the needs of its users in the dynamic DeFi landscape.

Unique Propositions and Core Products:

  • Money Markets - Features an array of “tokens+” including USD+, DAI+, wUSD+, USDT+, ETH+, wETH+ or USDC+. This allows users to explore multiple avenues for earning yields on their digital assets.
  • Pools - Supports a variety of pools with the aforementioned tokens, facilitating liquidity provision and yield farming activities within a unified ecosystem.
  • Insurance - Offers a safeguard for the collateral of rebase tokens against minor losses, enhancing the security and reliability of investments on the platform.
  • Exposure to Delta-Neutral Yield - Notably, USD+ can allocate a portion of its portfolio to Ethereum Trading Strategies, providing users with access to delta-neutral yield opportunities.

A Secure and Robust Lending Platform: Moonwell Finance

Moonwell ($WELL) is an innovative lending and borrowing protocol that operates across Base, Moonbeam, and Moonriver networks. It's designed to simplify the often complex DeFi lending and borrowing landscape, making it more accessible and user-friendly.

Core Features and Mechanics:

  • Simplicity in Lending and Borrowing - Moonwell aims to remove the barriers typically associated with decentralized finance tools by offering a straightforward and intuitive platform.
  • Security and Transparency - Security is a foundational element of Moonwell, with robust measures in place to protect the protocol and its users. Additionally, the protocol’s operations are fully transparent and visible on-chain.

The Most Popular SocialFi Platform: Friend.tech 

Friend.tech probably does not need an introduction. It emerged in August 2023 as a notable platform within the social crypto space, boasting rapid growth to over 100,000 users and generating approximately $25 million shortly after its launch. This platform, built on the newly launched Base network, integrates social tokens to allow for the creation and monetization of online communities via blockchain technology.

What Makes Friend.tech Unique:

  • Social-Token Integration - Utilizes social tokens to merge traditional cryptocurrency features with patronage systems, enabling influencers, creators, and brands to monetize their fan base through exclusive offers and content.
  • X Account Linking - Friend.tech facilitates the tokenization of Twitter accounts into “keys,” providing access to private chat groups and exclusive content to key holders, enhancing user engagement and content exclusivity.
  • Airdropped Rewards and Fee Sharing -  Incorporates standard crypto platform features such as airdropped rewards and fee sharing, promoting an inclusive and rewarding community environment.

Friend.tech's model has sparked discussions about its long-term viability and comparisons to Ponzi schemes due to its reliance on the continuous acquisition of new users to sustain key value appreciation. Despite these concerns, the platform's novel approach to social networking and community monetization has marked it as a significant player in the intersection of social media and blockchain.

Real World Assets (RWA) Tokenization Protocol: Cygnus Finance

Cygnus Finance is positioned at the intersection of real-world assets (RWA) and decentralized finance (DeFi), aiming to drive mass adoption of Web3 by bridging the gap between tangible, real-world yields and the composability, globalization, and cost-efficiency of DeFi.

Core Features and Mechanics:

  • RWA and DeFi Combo - Cygnus emphasizes the mutual benefits of integrating RWAs with DeFi’s innovative financial mechanisms.
  • cgUSD with native yield - Users can convert their USDC into proprietary cgUSD, which tokenizes the yield from treasury bills and automatically passes it to the users.
  • Yield enhancement - cgUSD can further be wrapped and used in other DeFi protocols to earn additional yield.

Decentralized Trading Protocol: Avantis

Avantis introduces itself as an on-chain decentralized exchange (DEX) with CEX-like front-end, specialized in trading and market-making across cryptocurrencies, forex, and commodities. Users of Avantis can access yield from sophisticated financial derivatives, such as perpetuals, and even leverage this yield up to 100X.

Core Features and Mechanics:

  • Advanced Onchain DEX: Avantis is designed for onchain leverage-based derivatives trading, including perpetuals and options, offering a suite of tools for both traders and market-makers.
  • High Capital Efficiency and Risk Management: By combining synthetic leverage with a USDC stablecoin liquidity pool, Avantis boosts capital efficiency, enabling high leverage (up to 100x) and a broad selection of tradeable assets. It introduces fine-grained risk management for liquidity providers (LPs) through time and risk controls, allowing anyone to act as a sophisticated market-maker.

Leveraged Yield Farming Protocol: Extra Finance 

Extra Finance ($EXTRA) is a leveraged yield farming (LYF) protocol built on Optimism, distinctively offering up to 7x leverage to amplify the yield farming capabilities of its users. Besides leveraged yield farming, it also incorporates lending functionalities, allowing users to deposit funds and earn interest, thereby serving as a comprehensive DeFi platform.

Core Features and Mechanics:

  • Leveraged Yield Farming - Offers flexible and powerful options for leveraged liquidity provision, enabling users to tailor their farming strategies to fit their risk profiles and investment goals. With leverage options starting at 3x, users can engage in reinvestment, market-neutral strategies, or adopt long/short perspectives on their farming endeavors.
  • Customized Asset Pairing and Borrowing - Users have the liberty to select any paired asset for deposit or borrow a customized ratio of the paired asset to execute leveraged strategies, supported by real-time position simulation for informed decision-making.
  • Passive Income through Lending - The platform allows users to deposit assets into lending pools, earning interest on those assets and providing a straightforward avenue for passive income generation.
  • Optimized Stablecoin & LST Yield Farming - By implementing an innovative interest rate model, Extra Finance aims to optimize earnings for its users by minimizing borrowing costs and mitigating interest rate volatility.

The Most Accessible Bridging and Crosschain Protocol: Stargate finance

Stargate Finance ($STG) emerges as a pioneering force in the DeFi space, building the first fully composable native asset bridge. Operating as the debut dApp on LayerZero, Stargate's mission centers on revolutionizing cross-chain liquidity transfers to facilitate seamless, single-transaction processes.

Core Features and Mechanics:

  • Fully Composable Native Asset Bridge - Stargate is distinguished by its approach to bridging, allowing for the direct transfer of native assets across chains without the need for wrapping, thereby simplifying the user experience and reducing transaction costs.
  • Seamless Cross-chain Swaps - Users can perform cross-chain swaps in a single transaction, such as exchanging USDC on Ethereum for USDT on BNB.
  • Integration with DeFi Applications: Stargate's infrastructure enables other DeFi applications, like DEXs and yield aggregators, to incorporate native cross-chain transactions directly into their platforms, expanding the potential for new APY opportunities and enhancing liquidity.
  • A solution to the Bridging Trilemma: Stargate addresses the core challenges faced by existing bridges—achieving instant guaranteed finality, enabling swaps in native assets, and maintaining unified liquidity across multiple chains.

The Bottom Line

The base chain definitely has a lot to offer with its inherited ecosystem based on EVM L2. Sticking with these dApp choices is not a 100% guarantee of security or profits, but it is a good start judging by their popularity (market cap). 

Many of these projects are able to provide a high yield on your assets, however, be careful how you allocate your capital, as these yields can be quite volatile and the underlying technology might not be as sound as it seems. 

This list was constructed using the data from Defillama.

Disclaimer: The content of this piece reflects the writer's opinion. This article is not intended to provide financial advice and is meant solely for entertainment and educational purposes. Investing in cryptocurrency involves significant risk. Capital is at risk, and returns are not guaranteed. Always conduct your own research.

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