DeFi Protocols Cheat Sheet
Decentralized Exchanges (DEXs)
| Protocol | Chain(s) | Model | Key Feature |
|---|---|---|---|
| Uniswap | Ethereum, Polygon, Arbitrum, others | AMM (Automated Market Maker) | Largest DEX by volume; concentrated liquidity in V3 |
| Curve Finance | Ethereum, multi-chain | StableSwap AMM | Optimized for stablecoin and pegged-asset swaps with minimal slippage |
| SushiSwap | Multi-chain | AMM | Uniswap fork with added yield farming incentives and cross-chain support |
| dYdX | Own L1 (Cosmos-based) | Order Book | Perpetual futures trading with up to 20x leverage |
| PancakeSwap | BNB Chain, Ethereum | AMM | Leading DEX on BNB Chain; lower gas fees than Ethereum-native DEXs |
Lending and Borrowing
| Protocol | Chain(s) | Model | Key Feature |
|---|---|---|---|
| Aave | Ethereum, Polygon, Arbitrum, others | Pooled Lending | Flash loans, variable/stable rates, governance via AAVE token |
| Compound | Ethereum | Pooled Lending | Pioneer of algorithmic interest rates; cTokens represent deposits |
| MakerDAO | Ethereum | CDP (Collateralized Debt Position) | Issues DAI stablecoin against crypto collateral; the original DeFi protocol |
| Morpho | Ethereum | Peer-to-Peer Matching | Sits on top of Aave/Compound; matches lenders and borrowers for better rates |
| Spark (by MakerDAO) | Ethereum | Pooled Lending | Maker’s lending arm focused on DAI-centric borrowing at low rates |
Liquid Staking
| Protocol | Chain(s) | Staked Asset | Key Feature |
|---|---|---|---|
| Lido | Ethereum | stETH | Largest liquid staking protocol; stETH is widely accepted as DeFi collateral |
| Rocket Pool | Ethereum | rETH | Decentralized validator network; anyone can run a node with 8 ETH |
| Coinbase (cbETH) | Ethereum | cbETH | Centralized but highly liquid; popular with institutional investors |
| Jito | Solana | JitoSOL | Liquid staking on Solana with MEV rewards passed to stakers |
Yield Aggregators
| Protocol | Chain(s) | Strategy | Key Feature |
|---|---|---|---|
| Yearn Finance | Ethereum, multi-chain | Automated Vaults | Auto-compounds yields across lending and LP strategies; “set and forget” |
| Convex Finance | Ethereum | Curve LP Boosting | Boosts Curve LP rewards without locking CRV yourself; earns CVX rewards |
| Beefy Finance | Multi-chain | Automated Vaults | Multi-chain yield optimizer; auto-compounds farm rewards across 20+ chains |
Bridges and Cross-Chain
| Protocol | Supported Chains | Key Feature |
|---|---|---|
| Wormhole | 20+ chains | Generic message passing; broad chain support for tokens and NFTs |
| LayerZero | 30+ chains | Omnichain messaging protocol; enables cross-chain token standards (OFT) |
| Stargate | 15+ chains | Unified liquidity bridge built on LayerZero; instant finality transfers |
| Across Protocol | Ethereum L2s | Optimistic bridge with fast finality; relayers front capital for speed |
Key Takeaways
- DeFi protocols fall into clear categories: DEXs, lending, staking, yield, and bridges
- TVL is the primary adoption metric — but always compare TVL-to-market-cap ratios
- Liquid staking (Lido, Rocket Pool) lets you earn staking yield while keeping capital deployable in DeFi
- Yield aggregators auto-compound strategies but add another layer of smart contract risk
- Cross-chain bridges are among the highest-risk DeFi primitives — billions have been lost to bridge exploits
Frequently Asked Questions
What is Total Value Locked (TVL) and why does it matter?
TVL measures the total dollar value of crypto assets deposited in a protocol’s smart contracts. Think of it as the DeFi equivalent of assets under management. Higher TVL generally indicates stronger adoption and deeper liquidity, but it can be inflated by recursive borrowing and should be cross-referenced with unique user counts.
What is the difference between an AMM and an order book DEX?
AMMs like Uniswap use liquidity pools and mathematical formulas to set prices automatically. Order book DEXs like dYdX match buyers and sellers at specific prices, similar to a traditional exchange. AMMs work better for long-tail tokens with fewer traders; order books offer tighter spreads for high-volume pairs.
How does liquid staking work?
You deposit ETH (or SOL, etc.) into a liquid staking protocol and receive a derivative token (stETH, rETH) in return. The protocol stakes your tokens and earns validator rewards. Your derivative token appreciates in value over time and can be used as collateral in DeFi — giving you staking yield plus DeFi composability.
Are DeFi yields sustainable?
Sustainable yields come from real economic activity: trading fees (DEXs), interest from borrowers (lending), and network staking rewards. Token emission rewards (governance token farming) are temporary and inflationary. Focus on protocols where the majority of yield comes from fees, not emissions.
What is the biggest risk in DeFi?
Smart contract risk — a bug or exploit in the protocol’s code can drain all deposited funds. Cross-chain bridges have been particularly vulnerable, with over $2 billion lost to bridge exploits since 2021. Other risks include oracle manipulation, governance attacks, and regulatory uncertainty. Diversification across protocols and chains is essential.