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Multifunctional “Expansion” of DeFi Mainstream Lending

In DeFi’s “Big Three”, “decentralized lending” acts as a hub between various roles, connecting DEX (Decentralized Exchanges), stablecoins, lending and other sectors.

The expansion of DeFi is still driving a large number of new assets to appear on the market, and causes users’ lending demands to change with the development of the industry. In addition to established lending platforms such as Maker and Compound, a number of mainstream DeFi lending platforms such as AAVE, ForTube and Venus are entering the market through improvements and innovations to jointly improve the new financial lending system in the cryptocurrency market.

Aave launched V2 in August 2020, conducting innovation from fixed interest rate deposits, stable lending rates, credit entrustment, collateral changes, batch flash loans, debt tokenization, community governance, etc. With those innovations, Aave directly exceeded $1 billion in TVL, with more than 79% increase.

Through the expansion and extension in the functions, the DeFi lending platform has effectively improved the platform’s TVL and market expectations: AAVE’s TVL is up to $3.329 billion in less than a year so far.

A fully upgraded version of ForTube V3 was officially launched last month, which is updated from the three dimensions of smart contracts, market risk and counterparty risk. It also launches the asset pooling to improve the utilization rate of funds. ForTube has made important improvements in four sections: asset security, platform governance, system risk control and community construction.

On April 20th, ForTube V3 launched the Yield Farming section. Depending on the high-quality lending assets of the platform, users can use ForTube Yield Farming to release the liquidity of LP Tokens that comply with the risk control rules, helping users to obtain higher aggregate profits.

(Data Sources: DeBank)

The above is the main flow of the DeFi lending market shown by DeBank. At present, the total borrowing volume of the DeFi lending market has reached $17.13 billion, and there is huge room for development.

It can be seen that among the DeFi lending platforms, all of them are eager to become the next “AAVE”.

Innovating DeFi Mainstream Lending Platforms

Among the majority of product update ideas, innovative models such as “Yield Farming”, “Flash Loans”, and “DAO Governance” have been generally accepted by the market.

Compound is the first one to conduct liquidity mining. After that, Aave grows fast with flash loans, multi-token support and unsecured lending. In the middle of 2020, after Curve launched liquidity mining and Yearn launched yield farming, both of them using Aave pool, increased Aave’s TVL high for several months, almost equal to Maker.

(Data Sources: Defipulse)

As the first batch of DeFi lending platform, ForTube is the same type as Compound, Aave and other platforms: over-collateralized encrypted assets, lending other types of encrypted assets, including stablecoins and cryptocurrencies.

At present, the market is still dominated by funding pool lending, and the business volume of bond platforms is limited. Platform upgrades and innovations can often effectively bring TVL changes. It can be seen from the V3, the platform has introduced a large number of effective functions that have been verified by the market.

The update logic of the V3: to solve the single funding pool problem that currently exists in DeFi lending, the issue of token economic models and platform governance, security issues, and community construction issues. This is also what every lending product needs to consider.

ForTube’s upcoming Earn section refers to Aave’s updated ideas. It will provide users with more flexible wealth management methods, including demand deposits with floating interest rates, time deposits, and fixed-rate lending products.

So, how to grow TVL?

The ForTube community has introduced a new governance structure, FDAO, to balance the issues of ForTube’s profit distribution, risk-taking, and governance decision. Through this model, users who hold $FOR can obtain 60% of the profit of the platform. Connecting personal benefits with the platform is aiming to increase the willingness and participation of the token holders in the governance of the platform.

According to public information, ForTube V3 has added a lending pool in different areas, which divides assets into stable zones and innovation zones based on asset ratings to distinguish asset sharing. At the same time, the FDAO model is introduced, and the stable zone and the innovation zone correspond to one FDAO for management and operation.

In the corresponding FDAO, platform profit will be rewarded to the corresponding FDAO token holder in the forms of $FOR. To ensure rationality, FDAO uses a new governance structure based on the Bonding Curve. Under rational design of this curve, the more the system reserves assets, the higher the number and proportion of guaranteed assets, and the safer the lending pool.

This function is used to balance ForTube’s profit distribution, risk-taking, and governance decisions. Under the FDAO governance model, each area of the platform decentralizes the impact of smart contracts and economic risks to a large extent.

Investors can obtain the financial risk exposure of ForTube’s future earnings by purchasing $fDAO Token. It is mainly divided into three aspects:

1) According to the risk preference, users pledge assets to selected FDAO pool and obtain the corresponding $FDAO Token;

2) FDAO manages its lending pool and covers partial risks;

3) $FDAO Token holders can share the platform’s profit.

(Image Sources: ForTube Website)

Where Compound and Aave have built a “base” through “DeFi Lego”, the lending platform that enters later needs to explore new paths.

ForTube took another approach, placing the breakthrough point on the BSC track. Currently, there are few lending projects on the Binance Smart Chain (BSC), ForTube is one of the first lending projects to deploy on the BSC, avoiding fierce competition on Ethereum to a certain extent. By capturing the value of the tokens on the BSC and the exchange of the Binance ecosystem, there is a certain potential for the development of new markets.

In ForTube V3, Yield Farming facilitates the in-depth cooperation with the Binance ecosystem. This section supports single token mining. Users can deposit LPs which are supported by the platform, including a large number of currencies in the Binance ecosystem (such as BNB-BUSD) to obtain additional ForTube lending amounts while obtaining profits, thereby increasing the utilization rate of funds.

While Yield Farming protects the user’s original expected profit, provides an additional flexible lending amount, which releases the liquidity of some locked assets, thereby increasing the utilization rate of funds. Through this, users can implement other profit strategies, such as trading with leverage and other financial derivatives.

In addition, after users deposit LP Tokens into ForTube Farming, they can still obtain the expected APY mining rewards and a certain pledge position vLP at the same time.

Here, ForTube takes the BSC innovation zone as an example, based on the vLP in this zone, users can lend specific tokens (such as $FOR and $BUSD).

With more projects in the BSC ecosystem launching on the ForTube, more and more mining pools will be launched on the platform, so that can attract more BSC users to use ForTube. According to ForTube official website data, as of April 20, 2021, the market size of the ForTube BSC version has exceeded $62 million.

Binance Smart Chain (BSC) is one of the important development directions for Binance, as one of the projects built on BSC, ForTube has the first-mover advantage to obtain more resources. ForTube and BSC may have more other opportunities to cooperate with each other to bring more benefits for users. On the contrary, if ForTube does not update its products in time, it will face more intense competition.

According to the roadmap, ForTube has now launched the ForTube Farming section. In the future, the platform token FOR will be deflated based on the results of the community voting. ForTube will launch the Wealth Management and NFT sections to bring more traffic for the platform. In terms of security, ForTube V3 has passed the security audit by the PeckShield.

What is the next boom in the DeFi lending field?

As we can see that other projects have begun to learn the development strategies from the top lending platform in the DeFi field to customize their own innovative strategies.

When users’ new transaction needs can be met by a new generation of DeFi lending, what is the next boom in the DeFi lending field?

(Data Sources: Defipulse)

According to the latest data from Defipulse, the value of liquid assets locked in DeFi lending platforms reached $27.7 billion. Compound, MakerDAO and Aave still occupy the top three. The TVL (Total Value Locked) of Compound has accounted for 38%, AAVE is close to Compound. Other lending platforms, including including InstaDapp, Cream.Finance, ForTube, etc., share the remaining liquidity.

In terms of price performance, AAVE has already exceeded COMP. In the early this year, the value of COMP was around $145, while the value of AAVE was around $88. In recent times, the value of COMP and AAVE has remained around $500 for a long time.

With the improvement of DeFi lending platform functions such as Venus and ForTube, the second-mover advantage has appeared. According to public data, ForTube has obtained more than $77 million in liquidity on Ethereum (ETH) and Binance Smart Chain (BSC), which occupies a certain market share. In the past month, there has been a clear growth trend.

Taking AAVE as a benchmark, FOR still has a lot of room for development. Compared with other lending platforms in the same period, ForTube V3 has relatively complete functions. The change in TVL (Total Value Locked) after ForTube V3 launches will be the focus of the market in the future.

(Data Sources: Defipulse)

In the expansion and innovation of DeFi lending platforms, the financial lending system of the entire industry is already meeting more needs of new transactions.

Looking back at the development path of DeFi lending, this field has achieved great success. The scale of decentralized lending continues to expand. In the past year, the total volume has increased by nearly a hundred times. It forms a development trend through the unique “Lego” of the crypto community. The concept of open finance is also trying to build a new field parallel to the traditional financial industry, and at the same time, it is constantly combining and trying with traditional finance. With the influx of more funds and traffic, Blocklike will continue to pay attention to the long-term development of DeFi lending platforms in the market.

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ForTube is the world’s top DeFi lending platform launched by The Force Protocol.