DeFi

DeFi Hub: Lending, DEXs, Yield and Every Major Protocol Explained

17 min read
DeFi Hub: Lending, DEXs, Yield and Every Major Protocol Explained

DeFi is a stack of separate markets: lending pools, exchanges, yield wrappers and leveraged perpetual futures. Each one has its own costs and its own ways of going wrong. This hub maps every Shironeko DeFi guide. It shows what each activity involves, what it costs and where it usually fails, so you can pick the right protocol and open the right guide. If you are completely new, read the plain-English what is DeFi explainer first, then come back here to choose a route.

  • Most DeFi activity falls into four jobs: swapping on a DEX, lending or borrowing, earning yield, and trading leveraged perpetuals. Each job has a different main risk.
  • Sustainable returns come from people paying to borrow or trade. When a yield is far above that, it is usually paid in emissions, or it means you are carrying extra risk.
  • Most of the largest losses in 2025–26 came from compromised keys, signers, bridges and price feeds rather than simple coding bugs. Kelp DAO and Drift in April 2026 are the clearest examples.
  • The protocol landscape changes quickly. Balancer and Radiant are winding down, Drift is rebuilding after its hack, and Aave V4 and Uniswap’s fee switch have changed the two largest protocols.
  • Rates, TVL and fees move every block. Check live figures on the protocol’s own dashboard or DefiLlama, never on a screenshot.

Start here: which guide fits you?

New to the idea of finance run by smart contracts? What is DeFi explains the building blocks with a worked loan example. If you are unsure whether you need DeFi at all, CEX vs DEX sets out the trade-off: a regulated exchange is the easier way to turn dollars into crypto, while DeFi is for self-custody and on-chain tokens. To see which protocols have lasted, read the best DeFi projects. For the ideas that came after the 2020 liquidity-mining boom (protocol-owned liquidity, real yield, restaking, tokenized assets), see DeFi 2.0 projects. Our DeFi news roundup tracks exploits, upgrades and regulation as they happen.

DeFi assumes you already hold crypto in a self-custody wallet. If you don’t yet, start with how to buy crypto and wallets and security.

DeFi decision guide: what do you want to do?

Choose the row that matches your goal. The “main risk” column shows what most often goes wrong for that activity. Smart-contract risk applies to every row.

Your goal DeFi activity Where the return or benefit comes from Main cost Main risk Read next
Swap one token for another DEX or aggregator swap Access to on-chain tokens without an exchange account Gas, pool fee, price impact Fake tokens, phishing sites, sandwich bots What is a DEX
Earn interest on stablecoins or ETH Supplying to a lending market Interest paid by borrowers Gas; protocol’s reserve cut Bad debt, depeg of collateral, vault curator choices Best crypto lending
Borrow without selling Over-collateralized crypto loan Liquidity while keeping your exposure Variable borrow interest Liquidation if collateral falls Aave
Earn trading fees Providing liquidity Swap fees, sometimes incentives Gas, active range management Impermanent loss Liquidity pools
Lock a fixed rate Buying principal tokens Discount to face value at maturity Swap fees; capital tied up until maturity Underlying asset failing Pendle
Trade with leverage Perpetual futures Price exposure, long or short Trading fees, funding payments Liquidation; venue and admin-key risk Hyperliquid

Core concepts to understand first

Five ideas explain most DeFi outcomes. A decentralized exchange lets you trade against smart contracts instead of a company’s order book. Most DEXs are built on liquidity pools, where a formula sets the price and depositors earn the fees. Depositors also accept impermanent loss: when the two tokens move apart in price, a pool position ends up worth less than simply holding them. A 2x move costs about 5.7% against holding. Traders face slippage, the gap between the quoted price and the price they actually get, which grows when your trade is large relative to the pool. Yield farming combines these pieces to earn interest, fees or reward tokens. The guide shows how to work out where an advertised APY actually comes from.

Crypto lending and loan interest rates

No single “crypto loan interest rate” exists. On-chain lending markets reprice every block based on utilization, the share of each pool that is currently borrowed. Roughly, suppliers earn the borrow rate multiplied by utilization, minus the protocol’s reserve cut. That is why rates spike when leverage is popular and sag when markets are quiet. Stablecoin borrowing usually costs more than borrowing ETH or BTC, because stablecoins are what most people want to borrow. To compare 30–90 day averages instead of today’s number, and to compare DeFi with the custodial lenders that survived 2022, use our crypto lending comparison.

Lending, stablecoin and yield protocols

For most people, Aave is the default lending market. It has the deepest liquidity and the longest track record, and its V4 hub-and-spoke design went live on Ethereum on March 30, 2026, alongside V3. The official app is app.aave.com; lookalike “my-aave” style domains that show up in search results are not affiliated with Aave. Compound pioneered pooled lending and liquidity mining, and its v3 markets keep things simple with one borrowable asset per market. Morpho splits lending into isolated markets plus curator-run vaults. The vaults can pay more, but the November 2025 Stream Finance collapse showed that a vault is only as safe as the curator’s choice of collateral.

On-chain dollars sit underneath much of this. MakerDAO, now rebranded as Sky, mints DAI and USDS against collateral. Ethena‘s USDe is a synthetic dollar backed by a hedged futures position, so its yield depends on funding rates. Both are covered in more depth in the stablecoin hub. Two yield layers sit on top of these protocols. Pendle splits yield-bearing tokens into fixed-rate and floating-rate parts. Convex pools Curve voting power to boost rewards for Curve liquidity providers. Read Radiant Capital as a cautionary case study, not as a place to deposit. After a roughly $50 million hack in 2024, its DAO began winding down in June 2026, and its contracts now exist only so users can repay and withdraw.

Protocol Model Best suited to Status note (October 2026)
Aave Pooled lending, V3 plus V4 Most lenders and borrowers Absorbed bad debt from the Kelp rsETH exploit; check how it was resolved
Compound Single-base-asset markets Simple USDC or ETH lending Active
Morpho Isolated markets plus curated vaults Users who can judge a curator’s risk Active; vault risk varies widely
Sky (MakerDAO) Collateralized stablecoin issuer Holding or borrowing DAI and USDS Active; MKR is migrating to SKY
Ethena Synthetic dollar Yield that depends on funding rates Active; supply shrank after October 2025
Radiant Capital Cross-chain lending Withdrawing only Wind-down since June 2026

DEXs and aggregators: where to swap

Which DEX you use depends mostly on which chain you are on. On Ethereum and its Layer 2s, Uniswap is the reference AMM. Its governance switched on protocol fees and burned 100 million UNI in December 2025. For a click-by-click walkthrough of a swap, including v4 pools and why swaps fail, follow how to use Uniswap. Curve is built for pegged pairs such as USDC/USDT, while SushiSwap trades breadth of chains for thinner liquidity. On BNB Chain the default venue is PancakeSwap, and on Base it is Aerodrome, which is now merging with Velodrome into a single platform called Aero. Read Balancer for its multi-token pool design, but note that BAL holders voted in September 2026 to wind it down, and pools move to withdrawal-only from October 30, 2026.

An aggregator often beats any single DEX. 1inch splits orders across EVM liquidity, and Jupiter does the same on Solana, routing through pools such as Raydium and Orca. Orca merged with Loopscale into a company called Formation in October 2026.

If you are on… Swapping volatile tokens Swapping stablecoins or pegged assets Best price across venues
Ethereum and L2s Uniswap Curve 1inch
Base Aerodrome or Uniswap Aerodrome stable pools 1inch
BNB Chain PancakeSwap PancakeSwap StableSwap 1inch
Solana Raydium or Orca Orca or Raydium stable pools Jupiter

Perpetuals and derivatives

On-chain perpetual futures carry the highest risk in DeFi, because leverage can wipe out your margin in minutes. Hyperliquid runs a full order book on its own chain and is now the largest on-chain perps venue. Its terms restrict US persons. Its points program ended with the November 2024 HYPE airdrop, so any “Season 2 claim” page you see is a scam. dYdX runs its order book on a Cosmos chain. GMX uses pools, so its liquidity providers act as the counterparty to traders. Drift lost around $285 million on April 1, 2026, when attackers obtained pre-signed admin transactions, and it is still working through recovery claims. Synthetix pioneered on-chain synthetic assets. For trading skills that apply on any venue, see the crypto trading guides.

DeFi by chain

Fees and the available protocols depend on the chain. Solana DeFi is fast and cheap, with Jupiter routing most trades. Arbitrum DeFi is strong for perps and yield farming (GMX, Pendle, Camelot). Base DeFi centres on Aerodrome, Morpho and Moonwell. Avalanche DeFi runs on LFJ, BENQI and Aave. Polygon DeFi covers QuickSwap and Aave’s Polygon market. Cardano DeFi is smaller and built around Minswap and Liqwid. Some of the chain guides predate this year’s changes, so confirm that a protocol is still active before you deposit. To move funds between chains, use the bridging hub, because bridges are where many of the largest losses happen.

What DeFi really costs

Each action has visible and hidden costs. Visible: network gas (fractions of a cent on Solana and most L2s, sometimes dollars on Ethereum mainnet), pool or trading fees, and borrow interest. Hidden: price impact, impermanent loss, funding payments on perps, liquidation penalties, and the token-approval transactions you sign before your first swap. On a small position, gas and price impact can eat a whole year of yield. Run the numbers before you chase a rate. Staking is a separate route with no impermanent loss; compare it in the staking hub.

DeFi risks to weigh first

Smart-contract risk

Code can have bugs, and audits reduce that risk without removing it. Balancer’s v2 stable pools lost about $128 million to a rounding bug in November 2025, years after launch.

Oracle and collateral risk

Lending markets trust price feeds and the assets they accept as collateral. In April 2026, an attacker used a bridge configured with a single verifier to mint unbacked Kelp DAO rsETH, about $292 million of it, then borrowed against it on Aave. Published estimates of Aave’s bad debt ranged from about $177 million to more than $230 million. The Stream Finance xUSD collapse in November 2025 hit Morpho and Euler vaults that had accepted it as collateral.

Depeg risk

Stablecoins and staked tokens can trade below their target. During the October 10, 2025 crash, USDe briefly printed $0.65 on one exchange’s order book while staying close to $1 on-chain.

Governance and key risk

Admin keys, multisigs and DAO votes can change, pause or drain a protocol. Drift’s April 2026 loss came from signers approving transactions they had not fully verified. Governance can also decide to shut a protocol down, as Balancer’s and Radiant’s DAOs did.

User-side risk

Fake front-ends, malicious approvals and lookalike tokens drain more retail wallets than protocol hacks do. Bookmark official URLs, get token contract addresses from the project itself, and revoke unlimited approvals you no longer use.

Incident Date Approx. loss Failure type
GMX V1 GLP pool July 2025 ~$42M (most returned) Contract logic
Balancer v2 stable pools November 2025 ~$128M Rounding bug
Stream Finance (xUSD) November 2025 ~$93M disclosed External fund manager loss, spread through collateral
Drift Protocol April 2026 ~$280–285M Social engineering of multisig signers
Kelp DAO rsETH bridge April 2026 ~$292M Bridge verifier misconfiguration

Loss figures are often revised. Check DefiLlama’s hacks dashboard or the protocol’s post-mortem for current numbers.

Browse every defi guide

Start here

Step-by-step DeFi guides

Core concepts

Lending and stablecoin protocols

DEXs and aggregators

Businessman using laptop in office analyzing stock market charts. Professional finance and investment concept.

What Is 1inch? The DEX Aggregator

1inch is a decentralized exchange aggregator: instead of trading on a single DEX, it searches liquidity across many (Uniswap, Curve,…

Perps and derivatives

DeFi by chain

Tools, safety and tax

FAQ

What is DeFi in crypto?

DeFi, short for decentralized finance, means financial services such as trading, lending and earning yield, run by smart contracts on public blockchains instead of by banks or brokers. You connect a self-custody wallet and deal with the code directly. There is no account application, but there is also no support desk or deposit insurance. Our what is DeFi guide covers the basics.

What are crypto loan interest rates?

On DeFi lending markets, rates are variable and depend on utilization, the share of a pool that is borrowed. Rates climb steeply once utilization passes a “kink” point, often around 80–90% for stablecoins. Custodial lenders may offer fixed terms instead. Rates change constantly, so compare 30–90 day averages on each protocol’s dashboard or DefiLlama, and treat any rate far above the market as a warning sign. Our crypto lending comparison explains the maths.

What is a DEX in crypto?

A DEX is a decentralized exchange: smart contracts that let you swap tokens directly from your wallet, with no account and usually no identity check. Most DEXs price trades with liquidity pools, while aggregators route an order across many pools to find the best price. The main risks are fake tokens, phishing sites and slippage. See what is a DEX.

Is the Crypto.com DeFi Wallet the same thing as DeFi?

No. A “DeFi wallet” is a self-custody wallet that can connect to DeFi apps. Crypto.com’s version has since been renamed Crypto.com Onchain, and it is separate from the Crypto.com exchange app. Any self-custody wallet that supports the right chain can do the same job. The protocols themselves are separate. Learn to secure a wallet in our wallets and security hub.

How do I swap tokens on Uniswap?

Open app.uniswap.org from a bookmark, connect a self-custody wallet that holds the network’s gas token, and pick the network. Paste the contract address of the token you want, then check the price impact and the minimum received. Approve the token if asked, then confirm. Swapping on Layer 2 networks usually costs far less than on Ethereum mainnet. Full steps are in how to use Uniswap.

Crypto is volatile and risky; this is education, not financial advice. Do your own research.

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