The Leading 5 DeFi Projects Making an Impact on Avalanche in 2025.

The potential to revolutionize the conventional banking sector has turned Decentralized Finance (DeFi) into a thriving landscape for both investment and innovation.

Throughout the years, DeFi initiatives have gained immense popularity, leading multiple blockchain networks such as Ethereum and Solana to host various offerings, each distinguished by its unique characteristics.

Avalanche stands out as a prominent DeFi hub in 2025, featuring a range of trending projects. Here are five noteworthy examples:

GMX

GMX serves as an autonomous marketplace for cryptocurrency trading, concentrating on perpetual futures contracts.

Its standout feature is the ability to reward liquidity providers with a portion of the trading fees generated by the exchange, ensuring attractive returns on investment.

Unlike standard DEXs that rely on two separate token pools, GMX employs a single liquidity pool comprising half stablecoins and half various tokens, including ETH and BTC. Traders utilize this pool, augmented by Chainlink oracles that provide precise valuations for each asset.

GMX also introduces two types of tokens. The first is GMX, which acts as a functional and governance token, granting holders voting rights over governance matters while participating in 30% of the platform's revenue as rewards. Participants can lock their GMX tokens to earn GLP, the second token, yielding 70% of the fees.

GMX Advantages

High leverage

With GMX, traders can leverage up to 50x, surpassing the options provided by most other platforms.

Multi-chain compatibility

In addition to Avalanche, GMX is also compatible with Arbitrum, offering seamless transactions with minimal fees when compared to other decentralized exchanges.

Single liquidity pool

GMX differentiates itself by utilizing a single liquidity pool model rather than the typical two-token setup.

Trader Joe

Taking cues from Uniswap, Trader Joe’s DEX has embraced the AMM framework, making it incredibly user-friendly for trading a variety of tokens native to Avalanche. Trader Joe not only facilitates basic trading but also incorporates advanced DeFi functionalities, such as yield farming, allowing JOE token holders and liquidity providers to earn rewards.

In addition to functioning as a medium of exchange, JOE also confers governance rights to its holders, enabling them to vote on pivotal decisions for the platform.

Next is the Liquidity Book, which implements a unique 'bin' structure to categorize different price points, allowing liquidity providers to focus their investments for optimal returns instead of spreading them thinly across a broad spectrum.

Trader Joe Advantages

Liquidity Book Model

The Liquidity Book enables liquidity providers to maximize the benefits of their staked assets rather than scattering them across an endless range of options.

Minimal slippage

By concentrating liquidity at specific intervals, the platform ensures that traders experience minimal slippage during trades, without impacting prices. This feature is particularly beneficial for institutional traders and large investors.

LayerZero partnership

The alliance with this omnichain protocol empowers traders to leverage their JOE tokens across multiple blockchain networks.

Stargate

Stargate Finance has established itself as a critical player in the DeFi ecosystem by facilitating liquidity flow across various networks and layers. Similar to other DeFi projects, STG functions as both a governance and utility token, providing holders with voting rights and staking incentives.

Stargate addresses the 'bridging trilemma' innovatively through its Delta Algorithm, which supports native assets, ensures unified liquidity, and guarantees instantaneous transaction finality.

What sets Stargate Finance apart is its use of Layer Zero technology, ensuring secure and rapid cross-chain communication. Layer Zero serves as the foundational layer, allowing different blockchain networks to engage directly with minimal trust required.

Stargate Advantages

Cross-chain pools

These pools enable users to store tokens on one blockchain and effortlessly transfer them to another, bypassing complicated and often costly bridging methods.

Layer Zero security

Through Layer Zero technology, Stargate enhances security and decentralization by spreading trust across various chains, reducing vulnerability to single-point failures.

Instant Guaranteed Finality

By declining swap orders that do not meet reserve balance requirements, the platform safeguards against liquidity issues and token incompatibilities that could lead to bridging malfunctions.

BENQI

BENQI offers services for lending and liquid staking, allowing users to generate returns on their assets and positioning itself as one of the leading projects on Avalanche.

The native token, QI, provides holders with staking incentives, and by staking QI in the liquid pool, users earn veQI, a governance token enabling them to influence the platform’s future.

The liquidity pool features a unique blend of order book mechanics combined with AMM benefits, ensuring minimal slippage while providing strong liquidity for trading larger assets.

With the BENQI Liquid Staking (BLS) solution, users can stake AVAX and receive sAVAX, a yield-bearing token that benefits from rewards distributed by Avalanche validators. Users are free to utilize sAVAX across various DeFi applications or exchange it.

BENQI Advantages

Multi-chain interoperability

BENQI is pioneering interoperability solutions, enabling token holders to extend the utility of their assets across different chains, thereby enhancing accessibility.

Composability

Built on the principle of composability, BENQI empowers users to create advanced financial solutions by integrating various protocols. By possessing QI tokens, users gain access to a versatile segment of the DeFi ecosystem, enhancing their earning potential and asset control through the integration of QI into their DeFi initiatives.

Democratic delegation

With veQI, users can influence which Avalanche validators receive additional delegations. They can utilize their votes to manage how much AVAX from the liquid staking pool is allocated to each validator.

WOOFi

Last but not least, WOOFi is making strides in the DeFi arena by utilizing synthetic assets and complex pricing models in innovative ways. It attracts both beginner and experienced traders by providing a seamless trading experience characterized by minimal slippage and tight spreads.

WOOFi’s main highlight is the Synthetic Proactive Market Making (sPMM) algorithm, complemented by its high-frequency on-chain oracles. This combination allows experienced market makers to effectively manage the spread and pricing in the on-chain order book akin to centralized exchanges.

WOOFi distinguishes itself further with its Supercharger Vaults. Users who stake tokens in these vaults grant liquidity control to the sPMM pool manager, limiting the risk to only the tokens they invest while alleviating concerns over temporary losses.

WOOFi Advantages

dApp rebates

As the only swap DEX that offers dApp rebates, WOOFi rewards brokers with 20% of the swap fees in stablecoins as an incentive for directing trades to its platform.

Multiplier Points (MP)

In a manner similar to GMX, this reward structure promotes long-term staking, with stakers receiving approximately 30% rewards. For example, if someone stakes 300 WOO, they can expect around 100 MPs as a reward.

Capital efficiency

Compared to traditional Automated Market Makers, WOOFi excels in execution quality, all while maintaining a significantly lower Total Value Locked, which enables traders to optimize their capital use.