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The Origin of DeFi Protocols: How Aave Compound Uniswap Launched

Yara Fernandez
Yara Fernandez
Crypto Regulation & Policy Press Release Expert
Published 2026-05-13
Updated 2026-05-13
The Origin of DeFi Protocols: How Aave Compound Uniswap Launched Article Image

The DeFi protocols that form crypto's financial infrastructure today — Uniswap, Aave, Compound, MakerDAO, Curve — all began as early-stage projects that went through some form of fundraising or token distribution before achieving their current scale. Understanding how these protocols launched, how their founders raised capital, and how they distributed governance tokens provides the clearest possible benchmark for evaluating new DeFi presales today.

MakerDAO: The OG (2017)

MakerDAO is the oldest continuously operating DeFi protocol. Rune Christensen founded the Maker Foundation in 2014, with the Dai stablecoin system launching in December 2017. Early fundraising included a 2017 token sale raising approximately $12 million from venture investors including a16z Crypto and Polychain Capital, with MKR tokens distributed to investors and founders. MakerDAO pioneered: over-collateralised borrowing, algorithmic stablecoin issuance, and decentralised governance — all foundational DeFi primitives.

Compound Finance: The COMP Governance Token (2020)

Compound was founded by Robert Leshner in 2017 and raised approximately $8.3 million from investors including Andreessen Horowitz and Coinbase Ventures. The protocol launched mainnet in 2019. The transformative moment: June 15, 2020 — the COMP governance token was launched via liquidity mining distribution. Users who supplied or borrowed from Compound automatically earned COMP tokens. This COMP farming incentive attracted billions in liquidity and triggered "DeFi Summer 2020" — with TVL across all DeFi protocols exploding from ~$1B to $15B in three months. COMP became the template for governance token distribution via protocol participation.

Uniswap: The V1 Launch and UNI Airdrop

Hayden Adams built Uniswap V1 with an Ethereum Foundation grant ($100,000 development grant, not a fundraising round) in 2018, launching in November 2018. Uniswap raised $1 million in seed funding from Paradigm in 2019. The UNI governance token was not launched until September 2020 — retroactively airdropping 400 UNI tokens (worth ~$1,200 at launch, later worth $16,000+ at peak) to every wallet that had ever used Uniswap. The retroactive airdrop model — rewarding past users without requiring forward-looking "investment" — became one of crypto's most influential token distribution innovations.

Aave: From ETHLend to DeFi Blue Chip

Aave began as ETHLend — a peer-to-peer crypto lending protocol founded by Stani Kulechov, which raised $16.2 million in an ICO in 2017 (LEND tokens). ETHLend pivoted to Aave's pool-based lending model in 2020, migrating from LEND to AAVE tokens in a 100:1 swap. Aave's protocol-controlled liquidity model, flash loans (uncollateralised single-transaction loans), and safety module staking created genuinely novel DeFi primitives. AAVE token migrated from the pre-launch LEND ICO in an orderly conversion.

Curve Finance: Vote-Locked Tokenomics (2020)

Curve Finance launched in January 2020 specifically for stablecoin-optimised AMM trading. Michael Egorov founded and self-funded initial development. The CRV governance token launched in August 2020 with a controversial anonymous launch (no official announcement). Curve introduced vote-locking (veCRV) — users lock CRV for up to 4 years to receive voting power over liquidity incentives. This "Curve Wars" model (protocols competing to acquire veCRV for directing liquidity) became a major DeFi governance narrative.

For how these DeFi ecosystem foundations affect presale evaluation today, see our Ethereum presale ecosystem guide. For understanding yield farming mechanics introduced by Compound and Curve, see our yield farming guide. For how DEXs like Uniswap work for presale token TGE listing, see our DEX guide.

Glossary

DeFi Summer
The Q2-Q3 2020 period when Compound's COMP liquidity mining launch triggered explosive growth across all DeFi protocols — TVL rising from ~$1B to $15B in three months.
Retroactive Airdrop
Distributing tokens to historical users based on past behaviour rather than requiring forward purchase — Uniswap's UNI airdrop to past users popularised this model.
veCRV (Vote-Escrowed CRV)
Curve's vote-locked governance token — users lock CRV for up to 4 years to receive proportional voting power over liquidity incentive distributions.
Flash Loan
Aave's innovation — uncollateralised loans that must be borrowed and repaid within a single transaction block, enabling arbitrage and liquidation strategies without capital requirements.

Disclaimer

Important: DeFi protocol launch histories show extraordinary returns that are not representative of average outcomes. This article is historical and educational only. CryptoPresaleNews.com is not a licensed financial advisor.

Yara Fernandez
Yara Fernandez Crypto Regulation & Policy Press Release Expert
521+ articles
1 Year experience
Regulation specialty

Yara Fernandez dives into NFT drops, Latin American crypto art, and GameFi projects that bridge culture and blockchain. As a respected name in crypto journalism, she delivers valuable insights on NFT and Web3 topics from around the world. Her work blends deep research with simplicity, making it easy for readers to understand the fast-moving world of crypto. She focuses on topics related to NFT and Web3 reporting and regularly covers emerging trends, technology updates, and community stories.

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Frequently Asked Questions

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MakerDAO is the oldest continuously operating DeFi protocol, with the Dai stablecoin system launching in December 2017. Rune Christensen founded Maker Foundation in 2014, raised ~$12M from a16z and Polychain Capital, and pioneered over-collateralised borrowing, algorithmic stablecoin issuance, and decentralised governance — all foundational DeFi primitives copied by hundreds of later protocols.
Compound launched COMP governance token on June 15, 2020 via liquidity mining: users who supplied or borrowed on Compound automatically earned COMP. This distribution mechanism attracted billions in new liquidity and triggered 'DeFi Summer 2020' — all DeFi TVL exploded from ~$1B to $15B in three months. COMP became the template for governance token distribution via protocol participation rather than traditional presale.
Hayden Adams built Uniswap V1 with an Ethereum Foundation $100,000 development grant (not investment) in 2018. Uniswap raised $1M seed round from Paradigm in 2019. In September 2020, Uniswap distributed the UNI governance token retroactively — airdropping 400 UNI to every historical user address without requiring forward purchase. This retroactive airdrop model became one of crypto's most influential distribution innovations.
In September 2020, Uniswap airdropped 400 UNI tokens to every wallet that had ever interacted with Uniswap (over 251,000 addresses). At launch, 400 UNI was worth ~$1,200. At UNI's 2021 peak, 400 UNI was worth over $16,000. Users who had made even a single Uniswap transaction received this retroactive reward — one of the largest and most celebrated airdrops in DeFi history.
ETHLend was a peer-to-peer crypto lending protocol founded by Stani Kulechov. It raised $16.2 million in a 2017 ICO (LEND tokens) for a P2P lending model requiring individual loan matching. In 2020, the protocol pivoted to Aave's pool-based lending model — depositors and borrowers using shared liquidity pools rather than direct matching. LEND tokens converted to AAVE at 100:1. Aave introduced flash loans and became a core DeFi blue chip.
Flash loans are Aave's innovation — uncollateralised loans that must be borrowed and repaid within a single Ethereum transaction block. Because the entire sequence (borrow → use → repay) happens atomically, there's no credit risk for the protocol. Flash loans enable: arbitrage across DEXs without capital, self-liquidation of underwater positions, and complex multi-step DeFi operations that would otherwise require large upfront capital.
Curve Finance's vote-escrowed CRV (veCRV) model requires users to lock CRV for 1-4 years to receive voting power. Voting power directs which Curve pools receive liquidity incentives (CRV emissions). This created the 'Curve Wars' — protocols competed to acquire veCRV (often by bribing CRV holders) to direct incentives to their own pools, creating a meta-protocol economy around Curve governance. Convex Finance emerged specifically to aggregate veCRV voting power.
DeFi Summer 2020 refers to the Q2-Q3 2020 period when Compound's COMP liquidity mining launch triggered a cascade: investors chased yield by supplying liquidity to Compound, then Balancer, then Curve, then other protocols. Total DeFi TVL exploded from approximately $1B in June 2020 to $15B by September 2020. This three-month period established the yield farming / liquidity mining model that defined DeFi for years afterward.
MakerDAO raised approximately $12 million in a 2017 private token sale from venture investors including Andreessen Horowitz and Polychain Capital. MKR tokens were distributed to investors and early contributors. The Maker Foundation also conducted subsequent MKR sales to Andreessen Horowitz in 2018 ($15M) and Paradigm ($2M). The Foundation's conservative, formal approach to fundraising contrasted with the ICO boom of the same era.
Liquidity mining (also called yield farming) is distributing governance tokens to users who provide liquidity to a protocol. Compound originated the model: users earning COMP by supplying/borrowing. The token distribution incentivises initial liquidity which enables the protocol to function, while distributing governance to actual users rather than just investors. The limitation: mercenary capital chases highest yield and leaves when incentives end.
Key lessons: (1) retroactive airdrops to actual users (UNI) create more aligned communities than purely forward-looking presales, (2) liquidity mining (COMP) bootstraps usage but attracts mercenary capital, (3) vesting schedules for team and investors (Aave/Compound) aligned long-term interests, (4) governance token utility (voting on protocol parameters) provides real use-case for token beyond speculation, (5) direct funding from reputable VCs (Paradigm, a16z) creates stronger fundamentals than anonymous raises.
Yearn Finance was created by Andre Cronje in 2020, launching the YFI governance token with a completely fair launch: no pre-mine, no VC allocation, no founder allocation — 100% of YFI was distributed via liquidity mining over one week. Despite starting at $3, YFI reached $43,000 at peak (a higher USD price than Bitcoin at the time). Yearn pioneered automated yield optimization (moving deposits between protocols for best yield) and the 'fair launch' concept.
SushiSwap was a 2020 Uniswap fork that launched with its own SUSHI governance token and offered higher yield to Uniswap LP providers who migrated their liquidity. By offering better token incentives, SushiSwap temporarily drained over $1B of Uniswap's liquidity in what became known as a 'vampire attack.' SushiSwap demonstrated both the composability of open-source DeFi (any protocol can fork another) and the fragility of liquidity incentive-dependent protocols.
Early DeFi protocols (2017-2020) raised much smaller amounts: MakerDAO ~$12M, Compound ~$8.3M, Uniswap $1M seed. Today's equivalent protocols might raise $20-50M. But early DeFi launches had massive upside because the total DeFi market grew from ~$100M to hundreds of billions. Today's new DeFi presales compete in a much larger, more mature market where genuine differentiation from incumbent protocols (Uniswap V4, Aave V3) is harder to achieve.
Foundational DeFi innovations still in active use: over-collateralised stablecoins (MakerDAO → Dai), liquidity pools and AMM pricing (Uniswap → x*y=k formula), pool-based lending and borrowing (Compound → Aave), flash loans (Aave), stablecoin-optimised AMM (Curve), vote-locked governance (Curve's veCRV), yield optimization automation (Yearn), and governance token liquidity mining (Compound → universal adoption). Every new DeFi protocol builds on these primitives.
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