Chances are if you watch the financial markets, you’re hearing the words “decentralized finance,” or “DeFi,” pop up with more and more frequency.
The thriving peer-to-peer crypto network is becoming a standard part of a diverse crypto portfolio, grabbing the attention of consumers and billionaire investors alike. It sounds exciting—and it is—but what is it exactly? And what makes DeFi different from every other sector of crypto that you know?
What is DeFi?
Well, it is a big umbrella under which lies various financial applications that are pushed and geared by blockchain. The inspiration behind this technology draws its roots from the all-time famous and the best cryptocurrency to invest in now, Bitcoin.
Just how Bitcoin allows various entities to carry a copy of their transaction history and is not controlled by a central source. Similarly, DeFi is distinct and is ever-expanding the usage of blockchain technology from easy to complex use cases of finance. It would not be an exaggeration to say that most crypto enthusiasts are on a constant lookout for the top defi tokens to invest in 2021. The defi token prices and the upcoming defi coins are also constantly looked upon by enthusiasts.
Many popular DeFi platforms have designed their native tokens to incentivize users and facilitate the operations performed. These tokens are the most popular defi coins in the market. Every crypto enthusiast who is keen on being a part of the innovative marketplace should learn more about the top DeFi tokens, defi token prices, and their utilities. Although, the sudden surge in the DeFi marketplace has led to the emergence of new tokens. While this blog is being read, the entire market cap of the DeFi industry is near about $115 billion. This is quite a huge number for young technology like DeFi.
Also read, the Best cryptocurrency projects from 2020-2022.
Top DeFi Project 2022
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One of the pioneers of the DeFi crypto projects is the Uniswap decentralized exchange. It is also one of the top 10 defi projects of 2021. It uses an Automated Market Marker system (AMM) to make sure that is enough liquidity for ERC20 tokens being traded on the site. This token allows investors to have complete control over the private keys and also allows them to integrate other external wallets that even lets them trade at lower fees.
It is considered one of the best-performing tokens in the industry with a surge in the price of over 1100% in just eight months. It has a market cap of $13 billion and is considered one of the best in terms of valuation. Once investors buy the defi token UNI, they are also eligible for discounts and incentives on the Uniswap protocol.
One of the top DeFi tokens of 2021 is ChainLink. It acts as the link between the enormous amount of information being exchanged between crypto DApps. It is used to feed real-time data to smart contracts present on the blockchain. There are several functional utilities of the native token LINK on the platform.
ChainLink just like any other top decentralized platform has gained remarkable growth since its launch in 2019. Chain link cryptocurrency prices are expected to grow in the coming years.
Any investor must be aware of the volatility and price fluctuations the crypto and DeFi market brings with it, just like any other traditional asset market. However, if one is in search of a less volatile token then one can consider DAI. It’s a DeFi crypto coin that has been built using the blockchain technology behind Ethereum and thus, has its value pegged to that of the US dollar.
DAI is one of the first of its kind. How? It is one of the first DeFi tokens backed by a collateral asset. It was developed by MarkerDAO Protocol, believed to be one of the best platforms to build other decentralized applications and create defi coins.
The exchange rate of this token reflects the value of the US dollar against the other fiat currencies. Usage of DAI also reduces the delays involved while trading other financial markets along with reducing the transaction costs.
Another DeFi governance token, developed by the MakerDAO Protocol is Maker (MKR). MKR serves as the utility token while DAI works in reducing volatility. This is a reason why the Maker coins can be destroyed as well as created depending upon the price fluctuations in the market.
The MKR holders are accountable for adjusting the guidelines concerned with DAI. Investors even get voting rights in the MakerDAO ecosystem. These Defi governance tokens provide incentives to the investor in exchange for the participation of the governance of the ecosystem such as low fees and good interest rates.
Aave acts as the crypto lending service and is an open DeFi platform. It uses a non-custodial liquidity protocol that does not allow one to borrow crypto assets but also earn interest on them. This platform was first known as ETHLend when introduced in 2017. LEND was the native defi token of this platform. It then matched lenders with the borrowers. Later, new functionalities were added in 2018.
Also, read about the Best crypto projects 2021.
Summing it Up!
DeFi platforms are having a moment and getting some much-deserved recognition from both consumers and investors. DeFi funds are raising millions of dollars each day to push initiatives, improve and build platforms, and grow the already thriving network. These advancements are paving the way toward financial equality by increasing accessibility to important and otherwise unattainable financial tools. DeFi eliminates the gap, making the roadblocks that gatekept economic advancement for the very wealthy few a thing of the past. The future of DeFi is already here, and it’s for everyone.
These projects are some of the best projects of 2021. They are must-be lookout projects for the upcoming fiscal year of 2022.
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Disclaimer: It is advisable to dive into an investment after conducting thorough research. The article is not aimed at any financial advice. *All prices are as of October 25th, 2021.