In today’s generation, technology is the helmsman in the current waves of life. It has now become one of the vital elements for people in their daily life. In the world of Crypto, DeFi or Decentralized Finance is a new way to handle and execute financial transactions using applications. And, people are loving how DeFi tokens and apps influence our lives. Here are the Top 10 DeFi tokens by Market Capitalization:
In the rank of DeFi crypto, UNISWAP is the leading DeFi token. Uniswap is a cryptocurrency designed to be a tool for the community. It was developed on the Ethereum platform. It is used to automate liquidity provision on Ethereum and is described as an automated market maker (AMM). This protocol allows its users to exchange a token with another user by interacting directly with the smart contracts, with no intermediaries in between.
Recently, Uniswap funded 1 million UNI ($20m) to the proposed “Defi Education Fund” for students at Harvard Law School, and many DeFi enthusiasts seem to be inspired by the deal.
Chainlink is a decentralized oracle network, and a great tool that enables users to universally connect smart contracts. Chainlink securely connects the world’s existing infrastructure to the emerging blockchain that aims to redefine it.
Hundreds of integrations and partnerships started using Chainlink last year. The latest one was an app associated with Mark Cuban, by the name of dClimate. This app uses Chainlink to retrieve the data that dClimate uses. This app is one of many that have seen its utility and benefit, potentially contributing to Chainlink’s ranking.
Wrapped Bitcoin (WBTC)
Some people are more familiar with this token because it is a tokenized version of Bitcoin (BTC) that is in the Ethereum blockchain. Through this token, you can convert Bitcoin to WBTC, or vise versa at a ratio of 1:1. WBTC functions as a link between Bitcoin and the Ethereum blockchain.
With Wrapped Bitcoin, transactions are way cheaper and faster. This has made WBTC the top tokenized BTC asset. WBTC is being traded on 66 crypto exchanges and this could still increase in the future.
Dai is a stable decentralized cryptocurrency that does not require a custodian or any other authorities to regulate the currency. It operates using Ethereum smart contracts to handle the collateral. The stablecoins can be split into 3 types: Fiat-collateralized, Crypto-collateralized, and Non-collateralized. Dai is considered Fiat-collateralized and it also works in the MakerDAO system.
This week, Buenbit plans to expand to several countries and offers returns on DAI. According to Matias Bari, CEO of SatoshiTango “We have a relationship with the dollar that is typical of 70 years without a strong local currency. DAI is an alternative to the dollar”.
Aave is an open-source DeFi protocol that safely allows users to lend, earn and borrow crypto. Aave holders can earn interest by lending in about 20 cryptocurrencies and depositing digital assets into specially created liquidity pools. It is non-custodial, which means the platform itself doesn’t hold any crypto asset.
Aave has announced that institutional investors can soon enter DeFi through “Aave Pro” in the latter part of July. Aave Pro will enable firms and corporations to lend, borrow and earn interest on Aave, Bitcoin, Ethereum and stablecoins. It has been reported that the news sparked a strong positive reaction from both retail and institutional investors.
Terra is a blockchain program created by Terraform Labs, that uses fiat-linked stablecoins to drive the startup’s cryptocurrencies and DApps. As stated by Terraform Labs CEO, Do Kwon, “Luna directly benefits from the economic growth of the Terra economy, and it suffers from contractions of the Terra coin”.
Terraform Labs plans to use its own blockchain to establish a digital financial system, freestanding from major banks and fintech-app makers. The company also has recent advocates, namely Arrington XRP and Pantera Capital, who are committed to investing $150 million in products tied to the Terra ecosystem. This will be rolled out in the coming years, which will raise Terraform’s basic advancement.
As with Uniswap, PancakeSwap is an automated market maker (AMM) which lets users swap tokens, providing liquidity via farming and earning fees in return. It is known as The Number 1 AMM and yield farm on the Binance Smart Chain.
Chainlink VRF, the primary and most secure, verifiable Random Number Generator (RNG), is all set to furnish Lottery V2 with evidentially fair randomness in the selection of lottery winners. Furthermore, Chainlink is also delivering the Lottery V2 application with a system of cryptographic proof to validate the RNG as manipulation-proof. The incorporation of Chainlink VRF into Lottery V2 will guarantee secure and fair opportunities for all users to win prizes in the lottery.
Maker is a DeFi governance token founded by MakerDao and built on the Ethereum blockchain. This crypto has a relationship with DAI, which was mentioned earlier. Maker is a project that allows users to issue and govern the DAI stablecoin. The main purpose is to operate DAI.
The procedure of expanding DAI software is governed in a more democratic way, through straight voting by the regular part in the token’s ecosystem. In the past, only Ethereum was accepted, but this changed when the community voted to allow other assets. Its users can also vote to alter the Dai savings rate. Members have the ability to lock up their Dai in special contracts and earn interest.
Compound is a widespread lending platform that was founded in 2017. It allows users to earn interest by lending and depositing their tokens into one of the numerous pools supported by the platform. This allows each user to act as their own individual financial institution, giving out loans to eligible borrowers on interest. When those tokens are deposited into a particular pool, they are exchanged for a cToken version of that coin, which represents the original cryptocurrency, while the real tokens are loaned from the pool.
Compound is one of the top DeFi protocols that has been valuable in forming DeFi into the existential danger to conventional finance that it is today. There has been no clear announcement or road map, but it is highly likely that the protocol will launch its Layer 2 scaling solution this year, to reduce the issue of high gas fees.
Avalanche is an open-source platform for launching DeFi applications, trading, financial assets and other services. This means Avalanche is a “platform of platforms”, since it consists of thousands of subnets that establish an interoperable system of many blockchains. The consensus protocol is what sets Avalanche apart from other decentralized networks. Its token is utilized to secure the network via staking and payment, and it allows a basic unit of account among the multiple subnetworks created on its ecosystem.
Avalanche has announced the Chainlink Price Feeds integration that will allow developers to build highly scalable DeFi applications. It was also reported that Lydia Finance, an Automated Market Maker (AMM), Staking and Yield Farming platform, is live on Avalanche. At the moment, this feature is being tested and is expected to launch in July 2021.
DeFi platforms have been all over the media recently. JPMorgan CEO, Jamie Dimon, together with a few senior analysts, predicted that ETH 2.0 could improve the staking Industry to $40 billion by 2025. Apart from this, various analysts have predicted that Ethereum’s market capitalization will exceed that of Bitcoin because of the blockchain’s uniqueness and usability to support decentralized finance smart contract applications.