Bitcoin (BTC) has helped to create a new world of opportunity in a wide variety of ways. The value present within bitcoin would compound and compound some more more before it would extend into more digital assets.
Now, we see that more financial services are coming into the picture to address the new world after the birth of bitcoin. From your DEX applications to the general ETH ecosystem, you are seeing a new paradigm that is trending.
While the US dollar has served as a critical foundation to the global financial system, it looks like crypto coins on applications like COMP and Bancor might be more beneficial. We could see an expansion of the crypto market via the defi market with defi protocols, ERC20 assets and various derivatives.
But while more are throwing around terms like the kyber network and the governance token, with MKR, sushiswap, synthetic (SNX), thorchain, WBTC, it is necessary to learn about the basic concepts before branching out.
Decentralized finance (DeFi) is a relatively new term in the cryptocurrency industry. By itself, the term refers to handling financial transactions over blockchain technology. But as opposed to executing simple funds transfers through cryptocurrency, these transactions take place in an automated manner to handle more complex financial agreements.
This opens blockchain technology’s use case for a variety of applications, where the role of intermediaries can be played by smart contracts or pre-arranged conditions. This makes DeFi an excellent way to execute loan agreements, actively trade cryptocurrencies, and participate in investments while ensuring fairness and preventing delays.
But before you can take part in a DeFi token investment, loan agreement, or trading programs, it is important to learn about the most important DeFi tokens that are currently available in the market. By learning what are the top DeFi coins and what their respective blockchains can do for you, you can know exactly how to benefit from this marvelous technology.
To help you through this learning curve, here are the top DeFi tokens that deserve your attention.
1. Aave
Widely known as the originator of flash loans in the cryptocurrency space, Aave stands apart with its innovative use of DeFi approaches. Through its uncollateralized flash loans that are entirely managed through smart contracts, the platform has practically redefined what DeFi can achieve for its users.
For those with sufficient finances, Aave presents an opportunity to lend their funds to other people for pre-agreed interest rates. For those who are looking for financing or loans, it carries the benefits of no collateral, faster approval, and low interest rates.
Instead of having a third-party to look after recovery or payments, Aave’s smart contracts also take care of these processes all on their own as a part of the flash loans mechanism. With its proven ability to lend, recover, and fulfill payments through its flash loans smart contracts, Aave has become one of the top DeFi tokens and lending solutions in the DeFi sector.
If you are looking for an answer to what are the top DeFi coins, Aave’s eponymous DeFi token stands out as one of the most logical responses to the inquiry. The token currently ranks within the top 50 cryptocurrencies by market cap. It is available through popular exchanges including but not limited to Binance, Coinbase Exchange, FTX, Huobi Global, and KuCoin.
2. Chainlink
Chainlink operates as an oracle network over blockchain technology, which allows different blockchain networks to get their hands on off-chain information and processes in a secure manner. This allows the platform to provide essential support to smart contracts, which paves the way for different DeFi processes to come to life.
In order to help smart contracts execute accurate processes, Chainlink connects with oracles or external data point providers to extract information that exists off the blockchain. From there, it helps smart contracts use this data in order to enable their targeted and automated actions. Due to its emphasis on making smart contracts actually smart enough to replace intermediaries, Chainlink has become a prominent player in the DeFi token investment space.
This also makes Chainlink different from many other funds-transfer or value-transfer based DeFi tokens. With that being said, the critical purpose that it serves for the DeFi sector makes it a strong presence within this category of cryptocurrency-based transactions.
Chainlink’s token LINK currently ranks within the top 15 cryptocurrencies by market cap and can be purchased through exchanges such as Binance, Coinbase Exchange, FTX, Huobi Global, and KuCoin.
3. Dai
While looking for top DeFi tokens, the discussion cannot be completed without the mention of Dai (DAI). As one of the first applications of blockchain’s DeFi use case, Dai makes its mark due to being a stablecoin, where each Dai’s value is equal to 1 USD. This becomes possible due to an automated value-retention system that is powered by smart contracts.
Dai’s smart contracts allow you to benefit from collateralized loans that are powered by cryptocurrencies. Instead of having to go through extensive fees and exchange procedures, you can turn your cryptocurrency into DAI through these collateralized loans.
Over the years, Dai has positioned itself as a prominent stablecoin that steers clear of volatility and provides its holders with a significantly reliable digital asset. This function is supported by MakerDAO, which is Dai’s decentralized system of governance and makes it a highly sought after DeFi token investment.
Dai’s eponymous token currently ranks as a top 40 cryptocurrency by market cap in the world. The token is available on different exchanges including Binance, Coinbase Exchange, Huobi Global, and Kraken.
4. Uniswap
When you are learning about what are top the DeFi coins, you cannot complete the process without looking into Uniswap. By itself, Uniswap works as an automated market maker (AMM) or a decentralized exchange. Through its operations, the exchange allows investors and traders to purchase cryptocurrency through liquidity pools.
These liquidity pools lets you trade different pairs of cryptocurrencies without having to connect with an exchange-based account. This enables you to complete faster trades at lower fees, while also adding to your overall convenience.
This method of trading cryptocurrency through liquidity pools also works better with higher usability, which means that the more active traders there are on the platform, the better they can benefit from low trading fees. On the other hand, those who bring this liquidity to the table can also earn profits against related purchases that are completed on the platform.
Uniswap has its own token on the market by the name of UNI. It currently ranks within the top 15 cryptocurrencies by market cap and stands out as one of the top DeFi tokens. The token is available on exchanges such as Binance, Coinbase Exchange, FTX, Huobi Global, and KuCoin.
6. PancakeSwap
PancakeSwap is another popular DeFi platform that is specifically known for its decentralized exchange or automated market maker (AMM) solutions. Similar to Uniswap, PancakeSwap also allows its users to trade through liquidity pools and without the need for order books.
The main difference between both platforms is that PancakeSwap is based on the Binance Smart Chain, while Uniswap runs over the Ethereum blockchain. This makes PancakeSwap a more affordable DeFi token investment and platform in terms of transaction execution as well as related fees. For now, this also makes PancakeSwap faster than Uniswap.
Through PancakeSwap, you can easily trade your cryptocurrency pairs without having to pay sky high fees or putting up with delays to connect with another trader. The AMM or liquidity pool system also works better when more traders are actively using it. The ability to trade non-fungible tokens (NFTs) further adds to the platform’s reliability as a long-term trading solution and a potentially successful investment.
PancakeSwap’s native token is CAKE, which currently ranks as one of the top 45 cryptocurrencies by market cap. CAKE is available to trade on popular cryptocurrency exchanges including but not limited to Binance, Bithumb, KuCoin, and Gate.io.
6. Terra
If you continue to wonder what are the top DeFi coins apart from the ones mentioned above, Terra would be the perfect addition to your learning journey. The DeFi platform has carved its niche in the cryptocurrency industry by offering stablecoins that are tied to fiat currency.
Apart from its main utility coin that is labeled LUNA, Terra also offers a host of stablecoins such as the TerraUSD (UST) that is tied to USD. By using a stablecoin for your trading and value transfer purposes, you can save yourself from the overall volatility of the cryptocurrency market.
If you want to hold cryptocurrency but don’t want to go through the experience of unprecedented price hikes and risk of massive price drops, Terra and its stablecoins provide you with an easy way to achieve this feat.
This lowers the risk of volatility while also providing you with more reliable value transfer mechanisms. These features make LUNA and UST some of the top DeFi tokens that are currently in circulation.
If you are interested in making a DeFi token investment in LUNA, you would be delighted to know that the token currently ranks as one of the top 15 cryptocurrencies by market cap. It is available on exchanges including but not limited to Binance, Bitfinex, Huobi Global, KuCoin, and Gate.io.
7. Avalanche
In your quest to learn what are the top DeFi coins, you may stumble upon Avalanche sooner or later. Avalanche is a smart contract-based blockchain development platform. Through its system, it gives its users all the tools and resources they need to create their own blockchains and decentralized applications (DApps).
This makes Avalanche similar to Ethereum, which is known for hosting Aave, UniSwap, and Dai on its blockchain platform. While Avalanche is not the first competitor for Ethereum and may not certainly be the last, its ability to support smart contract based applications makes it quite sought after for DeFi tokens and application development.
Within just a year of its launch, Avalanche has attracted various DeFi projects to its platform that range from yielding solutions to lending services. This makes Avalanche a highly prominent player in the DeFi segment.
As one of the top DeFi tokens, Avalanche’s AVAX currently stands within the top 15 cryptocurrencies by market cap. It can be traded on popular exchanges that include but are not limited to Binance, Coinbase Exchange, Huobi Digital, KuCoin, and Bitfinex.
8. Fantom
While looking for an exciting DeFi token investment, you may also come face to face with Fantom. As one of many so-called Ethereum rivals, Fantom is taking up a challenge that has been tried by many blockchains that came before it. But to its credit, the platform holds fast transaction speeds and low transaction costs for actions executed over its platform.
Despite being a competitor to Ethereum, Fantom also stays compatible with the Ethereum blockchain through its Opera mainnet. With the ability to connect to Ethereum and vice versa, developers on the Ethereum blockchain can easily connect their DApps to Fantom and reap the rewards of its DeFi-centric support.
This mechanism as well as its asynchronous processing makes Fantom a compelling competitor and peer for Ethereum. This has given the platform quite some buzz. That is why, if you ask around about what are the top DeFi coins in the market at the moment, you may get Fantom as a surefire answer by many.
The Fantom token FTM currently stands within the top 35 cryptocurrencies by market cap. It is also one of the top DeFi tokens overall. The token is available at popular exchanges such as Binance, KuCoin, FTX, and Gemini.
9. The Graph
The Graph may seem like the name of an old-world newspaper. But it is actually a modern and robust blockchain that allows for easy delivery of data and information. In simple words, the platform lets you inquire current data points from popular blockchains such as Ethereum and networks such as the InterPlanetary File System (IPFS).
By making these mechanisms possible, The Graph allows developers to obtain crucial information and details to power their own applications. This makes sure that those who want to develop new applications or create connections through an application programming interface (API) have the necessary information at hand.
With The Graph’s feature to create subgraphs, you can also organize and develop streamlined sections of information that can be shared publicly and across different applications. This facility by The Graph makes it a sought after solution for DeFi token investment. This is especially true for those applications that are still finding their footing in the sector and need up to date information to improve their solutions.
The Graph’s GRT token currently ranks as one of the top 40 cryptocurrencies and one of the most prominent DeFi tokens. It is available for trading through exchanges such as Binance, Coinbase Exchange, Huobi Global, and KuCoin.
The Quest to Find What Are the Top DeFi Coins May Continue Into the Future
While projects such as Aave, Uniswap, and Avalanche have made their presence known in quite an astonishing manner, the DeFi segment still remains in its infancy. This means that even though you can easily spot emerging stars within the sector, it is important that you keep an eye out for additional projects that are yet to break through the surface.
By paying attention to market movements and diversifying your investments, you can easily reap the rewards that modern DeFi solutions bring to the table. This ensures that you are not putting all your eggs in one basket, while also keeping an open mind to using new technologies and platforms without unnecessary hesitancy.