DeFi infrastructure on high performance chains is under developed, and structurally different from the Eth ecosystem.

Here’s research on the path forward, and top opportunities for DeFi builders:

DeFi infrastructure on high performance chains is under developed, and structurally different from the Eth ecosystem.

Here’s research on the path forward, and top opportunities for DeFi builders:

https://variant.fund/articles/defi-opportunities-high-performance-chains/

The recent success of Solana, Aptos, and other chains - along with future launches of new ecosystems like Monad - paint an exciting picture. These chains seem poised to become hotbeds of trading activity and memecoin launches - creating fertile ground for new DeFi protocols.

In this article, I discuss how four technical components of high performance chains impact DeFi: throughput, low gas fees, validator selection, and block building.

2/ Low gas fees - gas fees are substantially lower on high-performance chains, often even compared to L2s.

Opportunities: DEX aggregators, cross-chain aggregators.

3/ Validator selection - many high-performance chains use some form of DPoS or leader selection for consensus.

Opportunities: higher yield LSTs, staking providers, restaking.

4/ Block building - some chains have no public mempool, and most consensus protocols use a leader schedule for block building.

Opportunities: block-building auctions, new MEV infra.

While the majority of DeFi certainly resides around the Eth ecosystem, there remain highly emergent, developing greenfield opportunities on high performance L1s. 

These will likely be some of the largest new DeFi protocols of this cycle.

1/ Throughput - high-performance chains can support much higher TPS. 

Opportunities: fully onchain orderbooks (spot and derivatives), low latency oracles.