Discover the Top-Rated Defi Tokens with High Liquidity and Promising Communities
The decentralized finance (defi) ecosystem is a rapidly growing market that offers investors greater control over their assets without relying on third-party intermediaries. The defi total value locked (TVL) reached an impressive $179 billion in November 2021, but it dropped to a local low of $35 billion in October 2023 due to the collapse of prominent crypto companies.
However, the recent market-wide rally has revitalized defi projects, and the total defi TVL has been steadily rising since mid-October 2023, reaching $52 billion. In this guide, we will explore the best performing defi crypto assets that have high liquidity and thriving communities. It’s important to conduct your own research and consider the risks before investing in these coins.
Ethereum: The Godfather
Although many believe that the defi ecosystem originated with Bitcoin, it was actually the Ethereum blockchain that provided a solid foundation for defi to flourish. Ethereum currently dominates more than 50% of the defi TVL, surpassing $29 billion. It’s worth noting that layer-2 networks built on Ethereum are not included in this TVL.
While Ethereum itself is not a defi protocol, its infrastructure has facilitated the smooth operation of numerous defi platforms and decentralized applications (dapps), attracting millions of users. Ethereum’s development also enabled the execution of defi apps through its smart contracts.
Liquid Staking Protocols
Lido Finance: Revolutionizing Liquid Staking
Lido Finance emerged as the first mainstream liquid staking protocol in December 2020, allowing users to stake Ethereum and supported assets while maintaining liquidity. With a TVL of over $22.5 billion, Lido is the largest defi protocol in the web3 scene. Lido’s native token, LDO, offers governance participation and potential growth.
Rocket Pool: Decentralized Staking
Rocket Pool simplifies the staking process for Ethereum by adopting a decentralized approach. Through resource pooling, individuals can stake with as little as 0.01 ETH, making staking accessible to a wider audience. Rocket Pool currently has a TVL of $2.9 billion and its native token, RPL, has gained attention following Coinbase’s investment.
Decentralized Exchanges (DEX)
Uniswap: Transforming Token Swaps
Uniswap is an automated market maker (AMM) that democratizes liquidity provision and enables anyone to become a liquidity provider and earn trading fees. With a TVL of over $3.8 billion, Uniswap plays a critical role in facilitating seamless token swaps with minimal slippage and fees. UNI token holders actively participate in governance decisions.
Balancer: Empowering Customizable Liquidity Pools
Balancer is a multi-token AMM that empowers users to create or add liquidity to customizable pools with up to eight tokens and custom weights. Balancer’s TVL has surged to over $993 million, positioning it among the top 20 defi protocols. BAL token holders play a role in governance and liquidity incentives.
GMX: Spot and Perpetual DEX
GMX is a decentralized spot and perpetual exchange on the Arbitrum network that offers low swap fees and zero price impact trades. With a TVL of over $600 million, GMX has experienced rapid growth and increasing interest from the defi community. The GMX token shows promise as the protocol expands.
Curve Finance: Efficiency in Stablecoin Trading
Curve Finance specializes in stablecoin trading by utilizing an AMM to minimize slippage and facilitate seamless trading between stable assets. Despite a reentrancy exploit in July 2023, Curve Finance maintains its influence in the defi market across multiple chains, including Ethereum, Arbitrum, Polygon, and Avalanche.
Lending Protocols
AAVE: Pioneering Defi Lending
AAVE operates as a decentralized money market protocol that allows users to lend, borrow, and earn interest on cryptocurrencies. AAVE’s integration of features like flash loans and collateral swaps has attracted investors, solidifying its position as one of the largest defi lending platforms. The AAVE token serves as a catalyst for advancements.
Compound Finance: Accessible Lending and Borrowing
Compound Finance stands out with offerings such as cToken for multiple asset support, absence of credit checks, and dynamic interest rates. Users can supply assets to the protocol’s liquidity pool, earn interest, or borrow against their collateral. Compound has experienced significant growth in TVL and its COMP token aligns participant interests.
Governance Protocols
MakerDAO: The Backbone of DAI Stablecoin
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