Algorand DeFi Guide

Algorand DeFi Guide

Adrian Graham
Fact Checked
Oct 14, 2022

In this guide, we overview the best and most popular DeFi applications on the Algorand blockchain and how to onboard onto their ecosystem.

Find out why the network built by Nobel prize-winning cryptographer Silvio Micali is one of the fastest growing by Total Value Locked during the bear market in 2022.

Table of Contents

Platform Highlights

What is Algorand?

Algorand is a permissionless, pure proof-of-stake (Pure POS) blockchain protocol that enables anyone to securely and quickly send payments or build new financial applications on its decentralized platform. With Algorand, there are close to zero fees to transact and users can be up and running in minutes. The Algorand Standard Assets (ASA) framework also makes it easy to launch new assets and represent real-world assets on the blockchain.

Algorand was created by Silvio Micali, a Turing Award-winning cryptographer, and his team with the goal of building a better blockchain platform that could scale to meet the needs of billions of users.

A scaleable Pure Proof of Stake blockchain.

Best Algorand DeFi Applications

There are a number of popular DeFi applications built on the Algorand blockchain that offer different services and features. Below, we overview some of the best and most popular Algorand DeFi applications that are sorted by the highest in Total Value Locked (TVL).

AlgoFi - $128m TVL

AlgoFi is currently the largest DeFi application on the Algorand blockchain with over $120 million locked on the platform. The platform position's itself as a complete DeFi hub built on ALGO, which allows users to earn interest, borrow, swap, stake and farm tokens. It is a complete all-in-one lending protocol and DEX with a native stablecoin that boasts the most liquidity on Algorand.


Folks Finance - $82m TVL

Folks Finance is the second largest DeFi application on Algorand with a TVL of over $82 million. The protocol is a pure lending and borrowing platform that is aimed toward onboarding institutional investors. It is backed by leading crypto investors like ParaFi, Coinbase Ventures, Jump Crypto and the Algorand Foundation. It offers yields as high as 8% for USDC deposits and borrow rates as low as 4%.

Folks Finance

Tinyman - $11m TVL

Tinyman is a next-generation DeFi AMM and DEX that is built uzing the fast and secure framework of the Algorand blockchain.  The protocol is designed to offer the best possible rates for users when swapping or converting tokens. It also allows users to stake their tokens and earn rewards in the form of TMN, the native token of Tinyman. It is a relatively simple application and functions like Uniswap, Sushiswap and other DEX's on different networks.


How do I use Algorand DeFi?

Wondering how to get started with Algorand DeFi? Luckily, the process is fairly straightforward and can be done in a few easy steps.

  1. Download an Algorand Wallet - we recommend the Pera Algo Wallet
  2. Install the wallet and save your seed phrase (don't forget this step!)
  3. Send funds to your Pera Algo Wallet from a centralized exchange like Binance or FTX
  4. Visit the application you want to use and connect your wallet
  5. You will now be able to interact with the application and earn yields in ALGO DeFi!
Pera: The largest Algorand DeFi Wallet.

What is DeFi?

DeFi, or decentralized finance, is a catch-all term for the various ways in which crypto users can interact with financial protocols and instruments that exist on blockchain platforms. These protocols and instruments are often open source and permissionless, meaning anyone can use them without having to go through an intermediary.

There are a wide variety of DeFi protocols and applications, but they can broadly be categorized into three main categories: lending and borrowing, payments, and trading.

What is an Algorand Standard Assets (ASA)?

Algorand Standard Assets (ASAs) are a type of blockchain asset that is native to the Algorand network. ASAs are programmable assets that can represent anything from traditional fiat currencies to more exotic assets like loyalty points or carbon credits.

ASAs are easy to create and manage, and they offer a number of benefits over other types of assets. For one, ASAs can be easily divided into fractional units, which makes them well-suited for use in a wide variety of applications. Additionally, ASAs can be transferred quickly and easily on the Algorand network with close to zero fees.

There are currently over 50 different ASAs that have been created on the Algorand network, with more being added all the time.

Algorand DeFi: The Bottom Line

Algorand DeFi is a rapidly growing ecosystem of protocols and applications that are built on the Algorand blockchain. The ecosystem offers a wide variety of services, including lending and borrowing, payments, and trading.

With over $200 million locked in DeFi protocols, Algorand is one of the leading blockchains for DeFi. The ecosystem is expected to continue growing in the coming months and years, as more developers build on Algorand and more users adopt DeFi applications.

If you're looking to get started in DeFi, Algorand is a great place to start. The ecosystem is easy to use and offers a wide variety of services that can be accessed through a simple wallet connection. So what are you waiting for? Get started with Algorand DeFi today!

Adrian Graham

Co-Founder & former banker turned Full-Time DeFi analyst and researcher. Left traditional finance to pursue my interest in digital assets and decentralized finance.

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