Revisiting Folks Finance: The Potential Candidate in the DeFi Lending Protocol

Recently, I have conducted further research into @FolksFinance within the Algorand ecosystem and found that its core advantages as a lending protocol are becoming increasingly prominent, and it may currently be relatively undervalued in the DeFi space.

The core innovation lies in that Folks Finance @FolksFinance does not simply transplant the Aave or Compound model to Algorand, but deeply integrates liquid staking (xALGO/gALGO) with the lending mechanism. Users can earn native staking rewards and MEV returns from the underlying assets while depositing ASAs for lending, which is a rare design of "earning rewards while lending" on other chains, achieving a compound APY of 8-12% with no impermanent loss risk.

In terms of cross-chain layout: the lending pool has been expanded to multiple networks such as Base, Polygon, Arbitrum, and Ethereum, using a hybrid solution of State Proof and Chainlink CCIP. This architecture is superior in security to most LayerZero or Hyperlane bridging solutions.

The current cross-chain debt position TVL has exceeded 120 million USD, with a bad debt rate close to zero. Its governance token FOLKS has a FDV of 250 million USD, which still shows a significant gap compared to Aave (market cap approximately 2.3-2.7 billion USD), but Folks has captured over 70% of the lending market share in the Algorand ecosystem and is continuously expanding its share on chains like Base and Arbitrum.

Overall, Folks Finance @FolksFinance at its current stage is similar to Aave in mid-2021: technologically advanced, with solid key metrics, but its valuation has yet to fully reflect its potential. It is recommended to pay attention to its subsequent developments.

#Algorand #Decentralized Finance #FolksFinance