Author: Monad Eco
Compiled by: Tim, PANews
On the first day of the Monad public chain mainnet launch, this article will help you quickly grasp representative projects in its DeFi ecosystem, such as the lending market, yield products, and liquidity staking.
Built specifically for the influx of millions of users into DeFi, Monad is capable of supporting massive daily transaction volumes for large financial applications. With a processing capacity of 10,000 transactions per second, a block generation speed of 400 milliseconds, and high finality, Monad aims to eliminate common problems in DeFi, such as transaction failures, high slippage, oracle data latency, and exorbitant gas fees. DeFi applications running on Monad will operate at speeds comparable to centralized exchanges, while maintaining fully on-chain operations based on a decentralized network.
Lending Protocols: Asset Lending and Borrowing in the DeFi Ecosystem
DeFi lending transforms existing assets into usable liquidity. On Monad, it becomes a crucial way to amplify risk exposure: users can borrow stablecoins by staking the liquidity staking token LST, earning higher returns through cyclical holding, or employing various staking strategies depending on their level of participation. Lending protocols within the Monad ecosystem offer differentiated product solutions for different user groups.
Curvance
Curvance allows users to convert interest-bearing assets such as MON, LSTs, and stablecoins into leveraged positions in a single transaction. The product interface eliminates traditional cyclical operation steps: there is no need to repeatedly perform deposit, borrowing, or resupply operations.
Curvance's core strength lies in its high capital efficiency, offering market-leading loan-to-value ratios and supporting a variety of collateral types: liquidity-backed tokens, interest-bearing stablecoins, yield derivatives, and vault tokens. The Curvance roadmap also includes support for more alternative assets.
The Curvance protocol employs a scalable clearing mechanism: it improves efficiency through bulk clearing, uses auction-style settlement to increase fund recovery rates, and launches a points program to incentivize both depositors and borrowers.
TownSquare
TownSquare employs a more modular approach, suitable for users who prefer proactive position management: enabling risk isolation, mixed collateral use, and customization of each loan. Users can open multiple independent lending positions within a single account, each with its own proprietary collateral portfolio and loan targets.
you can:
- Borrow stablecoins using liquidity-collateralized tokens as collateral.
- Borrow MON using stablecoins
- Use a mix of liquidity-staking tokens and stablecoins to achieve diversified portfolio allocation
All of the above operations can be managed through a single wallet, eliminating the need to switch between different user interfaces.
TownSquare employs a unified liquidity pool model, where lenders share the same pool, while borrowers can construct personalized positions. For correlated assets (such as MON and MON-LST), TownSquare also offers an "efficiency mode," allowing traders seeking to increase their directional exposure to obtain a higher loan-to-value ratio.
TownSquare plans to support a variety of Monad liquidity staking tokens and more mature assets, and will also integrate with WLFI's USD1 stablecoin and issue sUSD1 interest-bearing tokens, which are designed to be directly integrated into a revolving strategy.
Other lending protocols that will be launched on Monad:
Income Products: Exploring Income Opportunities
In addition to lending services, the Monad ecosystem offers yield-generating products that allow users to easily capture ecosystem opportunities. These products encapsulate investment strategies, active management features, and liquidity into holdable assets that users can trade or use within the DeFi ecosystem. This makes yield generation feasible and composable from day one. This section focuses on two yield-generating vaults that will be launched at the Monad mainnet launch.
MON Vault: Actively Managed Asset Allocation
Built by Mellow and operated by Steakhouse, MON Vault offers an active management strategy for users who want to earn rewards but don't want to manually manage them.
You don't need to deposit into separate liquidity pools or strategies; simply deposit MON tokens, and the MON Vault will automatically allocate funds to the optimal options, including liquidity staking tokens, lending markets, or ecosystem incentive programs.
MON Vault primarily focuses on:
- Actively allocate various MON profit opportunities
- Dynamically adjust strategies with the launch of liquidity platforms and LSTs.
- Efficient routing to various staking strategies
Ultimately, a low-intervention MON yield strategy was developed, which accurately captures yield opportunities with controllable risk while maintaining liquidity, composability, and portability across the Monad ecosystem.
earnAUSD Vault: A yield-enhancing solution for highly liquid stablecoins.
The earnAUSD vault, jointly created by Agora and Upshift, provides Monad ecosystem users with a one-stop stablecoin yield solution. Users simply deposit Agora's USD stablecoin AUSD to receive freely tradable interest-bearing token earnAUSD, without needing to manage their own investment strategies.
The earnAUSD vault will distribute AUSD assets across multiple yield channels within the Monad ecosystem. As the ecosystem develops, future strategies are expected to incorporate more diversified value-added opportunities such as basis trading and structured yield strategies.
earnAUSD is designed based on three core functionalities:
- Optimized allocation: Automatically allocate funds to markets that offer risk-adjusted returns.
- Deep composability: Supports cross-lending protocols, DEXs, and perpetual contract exchanges.
- Liquidity-first design: earnAUSD can still be used as collateral, traded in liquidity pools, and supported by the entire ecosystem.
In addition, earnAUSD vault integrates the native incentive layers of Agora and Upshift, creating a unified yield product for stablecoin users entering the Monad ecosystem.
MON Pledge and Liquidity Pledge
In addition to lending protocols and yield products, the Monad DeFi ecosystem also includes MON staking and liquidity staking services. By staking MON, users can earn staking rewards for maintaining network security. Users can stake directly with validators through Gmonads or the MonadVision staking panel.
Liquidity staking is an alternative to traditional staking, allowing users to earn corresponding liquidity staking tokens (LST) by staking assets. LST tokens can be used in combination within the DeFi ecosystem, enabling stakers to earn staking rewards while simultaneously participating in other DeFi activities. By maintaining the liquidity of LST tokens, users can realize various application scenarios across the entire DeFi ecosystem, including asset trading, lending, and liquidity provision.
There are currently several protocols providing LST in the Monad ecosystem:
These LST tokens, through their extensive integration within the ecosystem, enable MON stakers to earn additional rewards beyond the base staking rewards.
In addition to the protocols mentioned above, the Monad mainnet launch will also feature a wide range of DeFi protocols across various categories. The Monad mainnet launch is just the beginning: these foundational protocols will enable users to start experiencing, optimizing, and deploying, thereby fully unleashing the potential of a full-chain, high-performance DeFi environment.
