The Best Crypto Defi to Have Now
Have you ever felt like you were at a crossroads in the crypto universe, surrounded by many DeFi projects, each promising to be the next big thing?
Trust me, you’re not alone.
We’ll provide you with an up-to-date list of the most promising projects for 2023.
(We may earn commissions from affiliate links on this website.)
What is DeFi?
DeFi, short for Decentralized Finance, is like traditional finance but without the banks and intermediaries.
It’s a digital, open, and global financial system that operates on the blockchain.
In DeFi, you can do things like borrowing, lending, trading, and earning interest with cryptocurrencies directly, without relying on traditional banks.
DeFi applications and platforms are built on decentralized networks like Ethereum, which means they are not controlled by a single entity.
DeFi relies heavily on smart contracts, which are self-executing contracts with the terms of the agreement directly written into code.
The Importance of Choosing the Right Crypto DeFi Projects
Unfortunately, the DeFi space has seen its fair share of scams and rug pulls. Thoroughly researching and vetting DeFi projects can help you steer clear of these fraudulent endeavors. Look for transparent teams, active communities, and trustworthy audits.
Here are some common types of scams that have been observed in the DeFi space:
- Rug Pulls: This scam occurs when a DeFi project’s developers or anonymous creators drain all the funds from a project, leaving investors with valueless tokens.
- Exit Scams: In an exit scam, the creators of a DeFi project build up trust within the community and then abandon the project, taking all the invested funds with them. They may shut down the website, social media accounts, leaving investors with no alternative.
- Clone or Copycat Projects: Scammers often create projects that mimic popular and legitimate DeFi platforms.
- Phishing: Scammers create fake websites or social media accounts that closely resemble legitimate DeFi platforms.
- Ponzi Schemes: Some DeFi projects promise unusually high returns on investments. These schemes use funds from new investors to pay returns to earlier investors, creating the illusion of profitability.
- Fake Token Sales: Scammers may create fake initial coin offerings (ICOs) or token sales for non-existent projects.
- Impersonation: Scammers often impersonate well-known figures in the DeFi space. They use these fake identities to promote fraudulent projects or request personal information.
- Deceptive Yield Farms: Some DeFi yield farming projects promise extraordinarily high returns on staked assets. Red flag !
To protect yourself from DeFi scams, always verify the legitimacy of a project, review the code if possible, and be wary of deals that seem too good to be true.
Criteria for Evaluating Crypto DeFi Projects
When considering which DeFi (Decentralized Finance) projects to invest in or engage with, it’s crucial to have a set of criteria to help you make informed decisions.
Determining whether a DeFi project is a good one involves evaluating multiple criteria to evaluate its potential. Here 9 key criteria to take in consideration:
- The project’s smart contracts should be well-audited and free of vulnerabilities.
- Understand the problem the project aims to solve or the utility it offers.
- An active and engaged community can indicate a healthy project.
- Higher liquidity and trading volumes on exchanges can signify stability and less price manipulation risk.
- Understand how tokens are used within the ecosystem and whether they offer incentives.
- Assess whether the project is making progress in achieving its goals.
- Look at the number of users and the volume of assets locked or transacted within the project.
- Consider how the project plans to generate revenue and sustain itself in the long run.
- Research the team behind the project, including their experience in blockchain and DeFi.
The Best 5 Crypto DeFi Projects
1. Aave
Launched in 2017 under the stewardship of founder Stani Kulechov, Aave has redefined lending and borrowing by offering users a pioneering and decentralized approach to handling their digital assets.
At its core, Aave functions as a decentralized financial marketplace, affording users the opportunity to optimize their cryptocurrency holdings.
Circulating Supply: 14 584 632
Total Supply: 16 000 000
Max Supply: 16 000 000
2. Compound
Compound is a decentralized finance (DeFi) protocol built on the Ethereum blockchain that enables users to lend and borrow various cryptocurrencies without relying on traditional financial intermediaries such as banks.
Launched in 2018, Compound has played a significant role in the growth of the DeFi ecosystem by providing a platform for users to earn interest on their digital assets and access liquidity through collateralized borrowing.
Compound continues to innovate and expand its offerings, introducing features like “cToken upgrades” and exploring multi-chain solutions to scale beyond Ethereum.
Circulating Supply: 6 856 085
Total Supply: 10 000 000
Max Supply: 10 000 000
3. Curve Dao
Curve Finance is a decentralized finance (DeFi) protocol and platform that is primarily designed for stablecoin swapping and low-slippage stablecoin trading. It is built on the Ethereum blockchain and is known for providing users with a highly efficient and low-cost way to exchange stablecoins.
Curve Finance operates liquidity pools that contain various stablecoins, such as USDC, DAI, USDT, and others.
It is known for its relatively low fees compared to other decentralized and centralized exchanges.
Curve Finance has become a fundamental component of the DeFi ecosystem, especially for users who need to trade between various stablecoins with minimal slippage.
Circulating Supply: 882 666 297
Total Supply: 2 021 630 706
Max Supply: 3 303 030 299
4. Yearn.Finance
Yearn.finance, often abbreviated as YFI, is a decentralized finance (DeFi) platform built on the Ethereum blockchain. It was created by Andre Cronje and was launched in 2020. Yearn.finance is designed to help users optimize their yield farming strategies in the DeFi ecosystem.
The primary goal of Yearn.finance is to automate the process of finding the highest yield or interest rates available for various cryptocurrencies within the DeFi space.
Circulating Supply: 33 216
Total Supply: 36 666
Max Supply: 36 666
5. SushiSwap
SushiSwap is a decentralized cryptocurrency exchange (DEX) and DeFi (Decentralized Finance) platform that operates on the Ethereum blockchain.
It gained prominence as a community-driven alternative to Uniswap, another popular DEX. SushiSwap was created by an anonymous developer or group of developers known as “Chef Nomi.”
SushiSwap has its native governance and utility token called “SUSHI.” Holders of SUSHI have voting rights and can participate in shaping the platform’s direction and governance decisions. SUSHI tokens can also be staked and used for yield farming on the platform.
Circulating Supply: 249 868 351
Total Supply: 249 868 351
Max Supply: 250 000 000
If you want to know where to buy, these best crypto defi projects, check our review of the best crypto exchanges:
Fianl Thoughts
If, like me, you love reading, and are curious to learn more about this topic, here are some very useful books that you should definitely read:
- “DeFi and the Future of Finance” by Campbell R. Harvey and Ashwin Ramachandran
- “DeFi for Dummies” by Seoyoung Kim
(We may earn commissions from affiliate links on this website.)
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