Summary: Algorand, created by Turing Award-winning cryptographer Silvio Micali, is a fast, secure, and scalable permissionless blockchain protocol that uses a pure proof-of-stake mechanism. It hosts an ecosystem of DeFi applications such as AlgoFi, Folks Finance, and Tinyman that offer various services like lending, borrowing, token swapping, and staking.

Algorand also features Algorand Standard Assets (ASAs), making it easy to launch and manage digital assets with near-zero transaction fees. Users can quickly onboard the Algorand DeFi ecosystem using a wallet like Pera Algo.

Table of Contents

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).

1. 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.

AlgoFi on Algorand.

2. 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
Folks Finance.

3. 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.

Tinyman DeFi.

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.

Final Thoughts

In conclusion, Algorand is a fast-growing blockchain protocol, created by Nobel Prize-winning cryptographer Silvio Micali, which offers a secure and scalable platform for DeFi applications. With Algorand Standard Assets (ASAs), it is easy to launch and represent real-world assets on the blockchain, with close to zero fees for transactions. The Algorand DeFi ecosystem is home to popular applications such as AlgoFi, Folks Finance, and Tinyman, which offer services such as lending, borrowing, token swapping, and staking.

Onboarding onto the Algorand DeFi ecosystem is a simple process, with the use of a wallet like Pera Algo. Whether you're a seasoned crypto user or new to DeFi, Algorand is a platform worth exploring for its fast and secure DeFi offerings.