Choosing the Right Protocol
Learn about the Trade-off's on Summer.fi supported protocols
Every protocol on Summer.fi is excellent, but its good to know how they differ.
Currently, there are 2,932 protocols with a TVL >0 which you, as a DeFi user, can choose from. Right away, at Summer.fi, we do our best to curate the very best and highest quality for you.
Even though at Summer.fi you only have access to the best, there are still differences and tradeoffs within the protocols we offer. None better or worse, but different for different needs.
This guide will help you understand the tradeoffs between protocols and will help you answer the simple question:
Which protocol is right for me?
To answer that question, there are several protocol tradeoffs that you, as a user should be aware of.
| Protocol Tradeoff | Aave | Ajna | Spark | Maker | Morpho |
|---|---|---|---|---|---|
Protocol Governed by Token Holders | |||||
Uses price oracles | |||||
Long-tail collateral support | |||||
Ability to create your own borrow/lend pool | |||||
Potential for fast moving rates | |||||
Slow moving rates | |||||
Fast moving rates | |||||
Multi-collateral positions | |||||
Passive Earn strategy support | |||||
Active Earn strategy support | |||||
Lend’s assets out | |||||
Isolated pairs support | |||||
Receipt asset | |||||
Purely market driven risk parameters | |||||
Protocol risks managed by third party risk manager |
Protocol Snapshot
Even though you now have these protocol tradeoffs, it might still be hard for you to assess them against each other. The list below provides a snapshot of the key factors for each protocol we support, to help you decide which is best for you.
Ultimately, there are no high-level objective right or wrong answers. It's all about finding what is best for you and your needs.
*The list below is alphabetical*
Ajna
The Ajna Protocol is a noncustodial, peer-to-pool, permissionless lending, borrowing and trading system that requires no governance or external price feeds to function.
Core benefit
The protocol is NOT run by governance. Purely market-driven parameters.
End users can create a pool for any asset in a few clicks.
Existing markets to borrow and lend against the long tail, nonblue chip assets.
Best for:
Generally speaking, AJNA is best for those with non blue chip assets that they believe in who want to get liquidity, or lend against them.
An honest con:
It can be a bit difficult to manage AJNA positions, because of the protocols complexity.
Who controls the protocol?
Market participants.
The best deep dive
Relevant data
Aave
Aave is a decentralized non-custodial liquidity protocol where users can participate as depositors or borrowers. Depositors provide liquidity to the market to earn a passive income, while borrowers are able to borrow in an over collateralized way.
https://summer.fi/better-on-summer/aave
Core benefit
High liquidity markets for blue chip assets.
eMode (High-Efficiency Mode) helps enhance borrowers’ power by assessing the correlations between their collateral and borrowed assets.
Allows for multi-collateral borrowing.
Available on many different L2s, not just mainnet.
Best for:
Both new and existing DeFi users who want a simple place to borrow and earn, with deep liquidity and competitive rates.
An honest con:
AAVE borrow rates can sometimes be quite variable and jump around unpredictably.
Who controls the protocol?
AAVE Governance.
The best deep dive
Relevant data
Maker
Maker is a simple yet powerful protocol that enables the minting of DAI, a Top-3 stablecoin in the market. Maker allows borrowers to create Vaults, which is the only way to mint DAI. Depositers or DAI holders, on the other hand, can receive what is widely regarded in DeFi as the “risk-free rate,” Savings DAI. It is the longest-standing DeFi protocol.
https://summer.fi/better-on-summer/maker
Core benefit
Assets are not being lent out for borrowers, since they mint new DAI.
Dai Savings Rate is widely regarded as one of the safest ways to earn in DeFi.
Great for highly conservative DeFi borrowers and depositors.
Best for:
Highly consverative borrowers and depositor's who are generally using larger sizes.
An honest con:
Maker rates are generally higher because deposits do not receive a supply APY. Borrowing minimums can be high, in some cases >30k. No L2 support.
Who controls the protocol?
MKR token holders via Maker Governance.
The best deep dive
Coming soon!
Relevant data
Morpho
Morpho Blue’s narrow focus enables trustless and efficient asset lending and borrowing. It provides users with higher collateralization factors, improved interest rates, significantly reduced gas costs, and permissionless market creation.
By separating risk management from the immutable core protocol, Morpho Blue will serve as an open base layer capable of bringing a previously unimaginable level of flexibility to decentralized lending.
https://summer.fi/better-on-summer/morphoblue
Core benefit
Lenders have yields managed and optimized by “Risk curators”.
Isolated markets allow for low rates with higher LTVs. A highly advantageous combination for borrowers.
Gas efficient for core actions.
Best for:
DeFi users who want the cutting edge of DeFi. Low rates, high LTVs and managed risks.
An honest con:
Protocol does not offer great long tail asset markets. Not available on L2s.
Who controls the protocol?
Morpho Foundation.
The best deep dive
Coming soon!
Relevant data
Spark
SparkLend is a decentralized non-custodial liquidity protocol where users can participate as suppliers (lenders) and borrowers. Suppliers provide liquidity to a market and can earn interest on the crypto assets provided, while borrowers can borrow in an overcollateralized fashion.
https://summer.fi/better-on-summer/spark
Core benefit
Rates! Spark, as a part of the MakerDAO, has the ability to set rates at a level that are most competitive in DeFi. This also makes them more predicable.
Spark is an AAVE v3 fork so it also has the benefit of eMode (High-Efficiency Mode). Helping enhance borrowers’ power by assessing the correlations between their collateral and borrowed assets.
Access to MakerDAO liquidity.
Best for:
DeFi users who like Maker and DAI's conservative approach but want access to AAVE's new and innovative features. Low rates, high LTVs and managed risks.
An honest con:
Protocol not available on L2s. Protocol does not offer great long tail asset markets.
Who controls the protocol?
Currently MakerDAO goverance, soon to be
Isolated markets allow for low rates with higher LTVs. A highly advantageous combination for borrowers.
Gas efficient for core actions.
Who controls the protocol?
MakerDAO governance. In the future, Spark SubDAO governance and $SPK token holders.
The best deep dive
Coming soon!
Relevant data
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