Avalanche Defi Ecosystem Research

Understanding different Blockchains and their underlying ecosystem is quiet some work, this is why I’ve dedicated my time to feast your eyes with some deep-drive research on major blockchains and their Defi ecosystem.

In this research article I'll discuss:
- Avalanche blockchain overview
- Avalanche Defi ecosystem overview
- Lending/Liquid Protocol (Benqi)
- Decentralized Exchange (Platypus)
- CDP Protocol (Yeti Fiance)
- Research Summary

Let’s begin..

AVALANCHE BLOCKCHAIN OVERVIEW

Avalanche Defi ecosystem
Avalanche is a high performance, scalable, customizable, and secure blockchain that aim at 3 (three) broad use case;
- Building application-specific blockchain spanning from permissioned (private) and permissionless (public) deployment
- Building and launching highly scalable and decentralized (Daap)
- Building arbitrarily complex digital assets with custom rules, comments, and nodes (assets)

The avalanche network possesses the following properties;
- Scalable: it's designed to massively scale, robust & efficient
- Decentralized: It's designed to provide unprecedented decentralization
- Governable and democratic: it enables anyone to connect to its network and participate with the validation of transaction and first-hand governance.
- Interoperable and flexible: it's designed to be a universal and flexible infrastructure for a multitude of blockchain assets, where the base token AVAX is used for security and unit of exchange

The avalanche Defi ecosystem has a TVL of over $802m with over 150 protocols on the network.
Toptocol such as AAVE, GMX, TraderJoe, and Stargate has integration with the avalanche network.

Let's take a look at protocols that were built on the network

LENDING & LIQUID STAKING
BENQI
Benqi is a Decentralized finance protocol built in Avalanche. The protocol has two products/services it gives to its users;
Benqi liquidity market (BLM) and Benqi liquid staking (BLS).
Benqi liquidity market: enables users to effortlessly lend, borrow and earn interest with the digital asset. Depositors providing liquidity to the protocol earn yield, while borrowers can borrow in an overcollaterrized manner.
Benqi liquid staking: This is an avalanche liquid staking solution that tokenizes staked AVAX. Users are given the ability to use, swap, or collateralize the yield-bearing asset within decentralized finance applications

Benqi liquidity market features include:
- Depositing: The Protocol allows users to deposit the preferred asset that is accepted by the protocol
- Borrowing: The protocol allows users to gain exposure in the current asset appreciating (going long) while looking to enter another position with additional capital.
- Collaterize factor: The collateral factor varies across each asset.

Benqi liquid staking features: The benqi staking features include
- No locking period on staked asset
- Zero fees on depositing and withdrawing from BLS
- Full control over user asset
- The ability to seamlessly stake AVAX and provide earnings without needing to execute the cross-chain transfer.

Team
- The team ( founder & team) aren’t doxxed
- No information regarding any of their partnership/investors
- The sentiment across the Discord, telegram & Twitter channel is fairly okay

Financial metrics
The Protocol generates its revenue from the interest gotten from the borrowed assets. The revenue is shared between lenders in the protocol & the protocol itself

Tokenomics
Demand
The Protocol has a token called (QI) token. The token oversees the entire ecosystem of the BENQI protocol including BENQI Liquidity mining & liquid staking.
The QI token use case includes
- It can be used as a utility token, in the form rewards which grants avalanche delegation additional AVAX
- It can also be used for governance to vote and decide on the outcome of proposals through the benqi improvement proposal.

Supply
The total supply is 7, 200,000,000 tokens
Liquidity mining program 3, 240, 000, 000
Token sale 1.800,000,000
Treasury 1, 080, 000,000
Team 720,000,000
Exchange liquidity 360,000,000

Protocol Safety
- The smart contract is easy to find
- The Protocol has a well-documented whitepaper & technical software architecture.
- The code was sufficiently audited

DECENTRALIZED EXCHANGE
Platypus finance protocol was first designed as a single-side AMM (Decentralized Exchange) designed to exchange stable cryptocurrency (ERC-20 tokens) on the avalanche blockchain.
The protocol has upgraded its code to be a set of smart contracts designed to prioritize censorship resistance, security, self-custody, and maximum capital efficiency.

Feature & Product
- Coverage Ratio: Coverage ratio is a concept that defines the system equilibrium state since the platypus code encourages convergence towards equilibrium. The need for price slippage which functions as a coverage ratio is required
- Swap slippage: The swap slippage in Platypus is designed in such a way that a marginal slippage occurs when a user is performing a small amount of swap at the coverage ratio which makes the user benefit from the swap.
- Fees: platypus uses a transparent fees model such that when a user is using the protocol, the user is notified of the fees he/she will incur.
- Interest rate model: The interest rate model opens new opportunities for users to receive, more PTP from their staked assets.

Team
- The name of the founder is Duckbill
- Partnership/investment: platypus protocol has received capital from the following VC defiance Capital, Ox Ventures, Avalanche, Benqi, GMS, Colony, Hailstone Ventures, mechanism Capital, keychain Capital, TPC Capital, and Valhalla Capital
- The sentiment of the community members across ord, telegram, and Twitter channelselsokay.

Financial metrics
The protocol gets its revenue from trading fees attached to every swap

Tokenomics
Demand
PTP is the native token of Platypus finance, users who stake through the platform or lock their PTP receive vePTP which serves as a yield to maximize earnings & serves as a governance token to give users the right to vote and decide PTP emissions

Supply
Total supply 300,00,000
Distribution
Liquidity incentives -12,000,000
Treasury - 60,000,000
Sales (private and public) - 50, 000,000
Team 45, 000,0000
Exchange liquidity 10, 500,000
Advisory - 6,000,000
Foundation 6,000,000

Protocol Safety
- The smart contract is easy to find
- platypus has a well-documented whitepaper and software architecture
- The code was sufficiently audited

CDP
Yeti finance is a cross-margin lending protocol on Avalanche that allows users to borrow up to 21x against their portfolio of LP tokens, a staked asset such as sJOE and sAVAX, and yield-bearing stablecoin in a single debt position.

Farming and staking rewards are autos compound interest-bearings such as staked assets or LP tokens sited intge platform.

Borrowers receive YUSD, which is an overcollaterized stablecoin that can be swapped for additional assets and subsequently re-deposited into yeti finance to build a leverage position.

Features
- Borrowing: with yeti finance, users can borrow against their portfoasseassetst with a single loan. Depositor don't only keep their farming and staking rewards in yield-bearing assets but also borrow YUSD to either stake, provide liquidity of leverage up to 11x
- Farming: The stability pool is the first line of defense in maintaining system insolvency. Users can stake their YUSD in the stability pool to help repay the debts of liquidated Troves that fall under the minimum 110% collateral ratio.

Team
- The founder & team aren’t doxxed
- The Protocol has a partnership with Avalanche, TraderJoe & Genesis block
- The sentiment across Twitter, telegram, and Discord is very okay

Tokenomics

Demand
Yeti finance utilizes a two-token system - $YETI and $YUSD

- $YUSD is an ovovercollaterized USD-pegged stablecoin issued by Yeti Finance. It has multiple mechanisms to keep its price stable and pegged to $1
- YETI is the protocol token, it's designed to transition into a governance token.

It can be used for 3 things
- Boosting $YETI rewards for stability pool staking
- Boosting YETI rewards liquidity providing yield
- Exchange veYETI to get access to borrowing against high-demand collates

Supply (Distribution)
50% goes to community incentives
5% current & future team
15% foundation
17% strategic partners
8.83% Future strategic partners

Protocol Safety
- The smart contract for the protocol is easy to find
- The protocol has a well-documented white paper & technical architecture
- The smart contract was audited by @Dedaub @Threesigmalabs @Haechi @Codeavenue @watchpug

CLOSING (SUMMARY)
Avalanche is a blockchain that is among the top blockchain network, the Defi ecosystem of the avalanche ecosystem keeps growing with the deployment of different category protocols.
A major Protocol category building on the avalanche network is decentralized exchange, more and more protocols keep building on the network.
We expect to see more better features on decentralized exchange and lending protocols building on avalanche network.