Top 10 best defi projects to invest in, with the recent development going on in the digital world, Cryptocurrency has exploded into a massive trillion-dollar industry, sparking a wave of financial disruption.
Assets worth over billions of dollars are currently locked in the DeFi ecosystems, making it the fastest growing sector within the public blockchain space. With this, let’s move further on what DeFi simply entails.
Table Of Content
° What Is DeFi
° How Does DeFi Works
° How To Invest In DeFi
° How To Make Passive Income & Get Started with DeFi
° 10 Best DeFi Projects To Look Into
° What The Future Holds For DeFi
What Is Decentralized Finance(DeFi)
DeFi is an umbrella term for a category of projects & applications in the blockchain space heater towards disrupting the traditional finance world. It further refers to financial applications specifically built on blockchain technologies typically using smart contracts.
Smart Contracts are computer programs that are hosted & executed on a blockchain network by running on a Decentralized location instead of a centralized server. Smart Contracts allows multiple parties to come to a shared result in an accurate, timely & tamper-proof manner.
How Does DeFi Works
In today’s financial world, financial institutions act as guarantors of transactions giving these institutions immense power because your money flows through them. This brings the importance of DeFi using Cryptocurrency & Smart Contracts to help provide services that do not need intermediaries.
The system removes the control banks and financial institutions have on money, financial products & financial services. It sets the stage for a world without traditional brokers.
Now when it comes to Cryptocurrency & DeFi, there’s a slight difference which will be explained further. Let’s take for example the number one(1) Cryptocurrency at the moment – Bitcoin.
Bitcoin is a store of value, much like a fiat currency that operates on its own blockchain Whereas, DeFi allows you to lend, trade & borrow Cryptocurrencies like Bitcoin without banking/financial intermediaries.
How To Invest In DeFi: A Step-By-Step Guide
Having learnt about DeFi and how it works, I’ll be introducing to you a step-by-step process you could use in turning opportunities to realities with DeFi.
However, these processes can actually be quite achievable when you know which steps to take & which tools you can adopt for the job. Let’s go
- Prepare A Wallet:
Preparing a crypto wallet is the first step, entry & digital identity where you can store crypto coins & tokens that you’ll use in engaging with DeFi protocols.
When choosing a wallet though the internet could help you decide, but I’ll offer my opinion in choosing Trust Wallet which fortunately is approved and recognized by the world best trading platform – Binance.
This would help keep your coins & collectibles safe and secured.
- Purchase Crypto Coins:
Just in the case where you need cash to invest in stocks & exchanges, same as such when purchasing Cryptocurrencies.
N/B: When purchasing any coin or token of your choice, the best advice I can ever give is DYOR (Do Your Own Research). Before purchasing any coin, make sure you do a thorough underground research in order to detect and certify good coins with great potential.
Get Started With Your DeFi Investment With A Portfolio Tracker
With the vitality and fluctuations of the Cryptocurrency market since 2021 through 2022 with several coins and tokens reaching their All-time highs & All-time lows, it is essential to use a portfolio tracker like Coin-market Cap or Coinbase to stay up to date with crypto prices, following instructions in order to start trading, lending, staking(or lock up) crypto for a reward, yield farming or doing whatever else for which the protocol was built.
How To Make Passive Income & Get Started With DeFi
One of the most straightforward ways to make a passive income with DeFi is to deposit your cryptocurrency onto a platform or protocol that will pay you an APY (annual percentage yield) for it. This will be familiar to people who deposit money in a bank account and earn interest, but traditional interest rates on fiat currency deposits are dwindling, nearing zero, and sometimes even negative. In DeFi, the interest rates are substantially higher.
Getting started with DeFi: The simplest investment strategy, which provides only general exposure to DeFi, is to buy a coin popular in the DeFi space, with good trading volume, then find a trading platform or protocol where you can stake said coin. You can do it on most exchanges and usually with very low fees. This will lead to you gaining relatively high interest in the form of APY. The interest rate paid on your deposit can be either a fixed amount or variable and change with the market.
Ten(10) Best Trending DeFi Projects To Look Into
In order to pick the very best DeFi projects for your investment portfolio – you’ll need to consider metrics surrounding:
- Current market capitalization
- Growth potential
- Past performance
- Objectives and road map targets
- Token cost price
- Exchanges that list the token
10 Best Defi Projects To Look Into Now
The overall best coin to buy in 2022.
DeFi coins, as the name implies, is a Cryptocurrency token that is firmly ingrained within the fast-growing Decentralized Finance (DeFi) sector. The token is native to the new DeFi Swap Decentralized Exchange (DEX) which offers valuable swapping, staking & yield farming services.
The swap also have some of the best DeFi interest rates for those who hold DEFC tokens. The DeFi coin team has various plans in the works such as, DeFi Swap V2 which will feature technical analysis, news, webinars & more. Combining these plans with the growing numbers in the DeFi Coins Telegram group, it’s clear to see why DEFC is one of the best DeFi coins to consider adding to your portfolios.
The team behind DeFi coins also burned all their tokens at launch to highlight that this isn’t a “get rich quick” scheme.
With its past records, it has given rise to more trust & acknowledgement that this is a coin with worthy potentials.
Mainly known as the current leading cryptocurrency decentralized exchange space, it was built on the Ethereum network – founded by Hayden Adams in 2017. Uniswap allows for the exchange & trade of several DeFi tokens.
Aside from swapping, it also allows users to provide liquidity in existing pools or to create a new one. If you’re interested in trading in the Uniswap Exchange, you can pair & swap it for another crypto if you find its smart contract address.
Current Market Capitalization:
The Uni token has a Current Market Cap of around $3.8 billion with a total supply of 100million Uni.
Avalanche: The popular “Ethereum-Killer Blockchain
The Avalanche is a blockchain that promises to combine scaling capabilities & quick confirmation times through its Avalanche Consensus Protocol.
Coming into existence in September 2020 and has since become one of the largest blockchains with over $11billion total value locked in its protocol and a market cap of over $33billion (as at the time of writing) has in no doubt making it to the 3rd largest DeFi Supporting Blockchain after Terra & Binance smart chain.
Avalanche isn’t only for DeFi alone. Ava labs financially supports Metaverse investments in the network too with the idea being that a fast & cheap network could effortlessly support blockchain based games & virtual world.
Avalanche uses AVAX(a native token of Avalanche) to pay for transaction fees on the network. If you consider going for Avalanche and trying its DeFi protocols, you will need to buy AVAX on a centralized crypto exchange like Binance or Kraken. Then you will need to select “withdraw” on your exchange and transfer your AVAX tokens to a DeFi wallet, such as MetaMask.
Like other Cryptocurrencies, AVAX is a speculative & volatile crypto asset investors can buy and sell in the hopes of making good amounts of profit.
Decentraland is an Ethereum-based Metaverse game that encourages a global network of users to operate a shared virtual universe. Decentraland’s smart contract project created by two blockchain professionals – Ari Meilich & Esteben Ordano in 2020 is governed by a Decentralized Autonomous Organization (DAO).
Users of Decentraland can explore, engage & play games in this digital environment while buying & selling digital real estate. Fortunately, users may now use interactive applications, in-world payments & peer-to-peer interactions, all thanks to the platform’s evolution.
The Decentraland has 3 native tokens:
- Estate: An ERC-721 token representing merging pieces of digital lands.
- Land: An ERC-721 Non-Fungible Token representing parcels of digital lands.
- MANA: An ERC-20 token which is the official currency of Decentraland.
Extending to the crypto sector,you can also participate in the in-game economy by purchasing digital art, engaging in real estate parcels, etc.
In the case of buying Decentraland’s token – MANA, It is available on crypto platforms like Coinbase, Kraken, etc.
The Yearn.Finance is an Ethereum-based protocol focused on providing its users with access to the highest yields on deposits of stable coins & altcoins which was established by Andre Cronje – A South African financial technology developer in early 2020.
With the native of Cryptocurrency of the Yearn.Finance – YFI, it had become one of the largest Ethereum-based tokens due to the protocol’s focus on automated yield farming strategies.
Shortly after the launch, the community settled on a 30,000 coin maximum supply, opting to keep YFI relatively scarce instead of allowing it to inflate further. It has been argued that YFI’s launch was the “most fair launch since Bitcoin”.
The Yearn.Finance is an interesting protocol that is building unique decentralized finance products which suggests that those who have a monetary/emotional stake in an investment will do what they can to enable it to succeed.
Terra is an algorithmically-governed blockchain protocol that offers a collection of stablecoins. It maintains the prices by using Terra miners to burn or mint Terra stablecoins and LUNA.
One of the major challenges of the
adoption of Cryptocurrency in the real world, is its price instabilities. Therefore, to facilitate mass adoption of cryptocurrencies we need a stabilizing mechanism. This mechanism should be price stable and provide a safe store of value.
With the help of Terra, it sets out the vision to facilitate larger adoption of Cryptocurrencies.
Additionally, it provides a growing array of decentralized finance applications. It has a collection of fiat-pegged tokens (Terra stablecoins) and a stabilising crypto asset, LUNA. The protocol stabilizes Terra stablecoins’ price by balancing supply and demand. LUNA pool and Terra pool execute instantaneous swaps to obtain price stability.
SushiSwap is a software running on Ethereum that seeks to incentivize a network of users to operate a platform where users can buy and sell crypto assets.
Similar to platforms like Uniswap and Balancer, SushiSwap uses a collection of liquidity pools to achieve this goal. Users first lock up assets into smart contracts, and traders then buy and sell cryptocurrencies from those pools, swapping out one token for another.
The project was created by a group called Chef Nomi along with Co-founders SushiSwap & OcMaki in 2020.
SushiSwap’s cryptocurrency, SUSHI, plays a key role in maintaining and operating its network. SushiSwap’s core function is to mirror a traditional exchange by facilitating the buying and selling of different crypto assets between users.
Rather than being supported by one central entity, tokens traded on SushiSwap are maintained by smart contracts, and users lock crypto on the software that can then be accessed by traders.
With a Market Cap of over $278billion (as at the time of writing).
Cosmos, which bills itself as the internet of blockchains, is a decentralized network of independent yet interoperable blockchains that are able to exchange information and tokens between each other permission less.
With ATOM as the native Cryptocurrency of the Cosmos hub, Cosmos aims to address some of the issues faced by other blockchains — such as scalability, usability and governance — by providing the tools to help developers quickly build independent blockchains for a variety of use cases and enabling blockchains in the network to communicate with each other.
ATOM is currently ranked as the 27th largest cryptocurrency with a market cap of US$7.8 billion, according to CoinGecko. The price of ATOM reached an all-time high of US$44.42 on Sept. 20, 2021 and ATOM is trading at US$27.39 as of publishing time, according to CoinGecko.
The Lucky Block is a blockchain-based platform for decentralised gaming apps based on random number generation, transparent gameplay, payout mechanisms, and cross-game asset exchange.
The Lucky Block platform uses a decentralised smart contract framework to ensure that random number generation, calculations, rewards, and fund distribution are all done fairly.
Lucky Block coin promises to solve many problems that plague the present lottery systems, by creating a crypto lottery.
This will undoubtedly attract many lottery players buying into this coin leading to an increase in the value.
The Graph is basically a search engine for blockchain data from networks like Ethereum and Filecoin. Developers can create subgraphs and define how different blockchain data are structured for anybody to refer to.
The Graph was founded by Yaniv Tal, Brandon Ramirez and Jannis Pohlmann with GRT as the native token of The Graph and is used to pay for viewing subgraphs.
Though the coin is one with a good potential, following the fluctuations of the coin recently, The coin has lost significant value over the past year but is showing some signs of recovering in the short-term. That said, significant backing from major investors – as evidenced by the recent successful funding round and subgraph migration – suggests notable support for the crypto’s offering.
What The Future Holds For DeFi
Decentralised Finance (DeFi) has experienced tremendous growth since mid-2020. While it is still in its early days, there’s a great tendency that DeFi will have a huge and promising future/impact in years to come.
You can start now in making the opportunities you have a reality.
Remember, investing is a highly personal endeavor so it is expected you do your own research on whatever coin it is you want to buy. Trading Cryptocurrencies can be very risky & volatile – it is important you invest money that you can afford to lose.