If you thought that crypto is only about cryptocurrency, you’re wrong! Crypto is not just a miniature term but it rather stands for all sorts of applications of blockchain that are controlled by cryptography. Bitcoin was the first crypto breakthrough that was soon followed by Ethereum, a decentralized computer along with a currency.
Then came the third wave – DeFi, which is linked to decentralized finance. This is the establishment of decentralized and autonomous institutions that will be prove to be pivotal for the future of joint stock companies and our economies. Majority thought that DeFis met their peak level in October 2020. Enhanced tokenomics, new capabilities and bridging the gaps of 2020’s DeFi projects, there are few things we can see in 2021. Keep reading to know more.
DeFi – Its Definition
The short form of Decentralized Finance is DeFi and it refers back to the cryptocurrency sector that has a goal of bringing most of the conventional finance capabilities within the space of cryptocurrency. This is done by disassembling the different financial services and then decentralizing them again.
DeFi projects usually designate infrastructure and dapps like DEX (decentralised exchanges, asset management tools, DeFi infrastructure and Dev Tooling. DeFi are risky to invest and use at the present moment but with time, the more they’re optimised, they can come out with enhanced tokenomics.
Top 5 Best DeFi Crypto Projects
What are the investors supposed to do? Experts suggest they should skill up on them. The new strands of DeFi will offer a new decade of positive opportunities for traders. The place to start off is with the big names in the DeFi space and here we are going to give you the names off the big five DeFi tokens of 2021.
There are several dapps in the crypto space that require oracles to integrate with various types of data. In the present time, the numero uno leader in oracles is Chainlink. It provides a decentralised set of data through a string of oracles and smart contracts. Chainlink offers a middle-ground between blockchain applications and real-world data.
Since the year 2019, Chainlink witnessed a drastic growth, offering more than 75 price feeds to 300 smart contracts along with decentralized applications. It is also vital to notice that Chainlink was developed as a project and since then, it evolved to a point where it is offering grants to crypto initiatives that are useful for the total ecosystem.
In the world of DeFi, Chainlink makes a considerable impact by facilitating other projects with oracles to make sure their functionality is at a top-notch level. A few worthy projects using Chainlink oracles are KyberSwap, AAVE and Synthetic.
One of the fastest-growing and most hyped DeFi’s in the market is Synthetic. This is a decentralised asset insurance that is built on the base of Ethereum. This lets users mint synthetic representations of assets as tokens that measure the value of the asset on which they’re based. These synthetic assets maintain their peg through the protocol of no-arbitrage and the liquidity for synths on decentralised exchanges.
Maximum Supply: 219,252,230 SNX
Total Supply: 215,258,987 SNX
Circulating Supply: 114,842, 544 SNX
The SNX token also has a market cap of $2.5 billion. The SNX is used in staling and collateralizing synthetic assets, trading fees, yield farming and governance.
Dodo is deemed as an on-chain liquidity provider that provides stability via a proactive market maker. This project was initially developed on Ethereum in the form of ERC20 smart contract and later on grew it on the Binance Smart Chain. Just as cute its name is, the design is also effective as it is perfect in providing adequate liquidity as compared to the other centralized exchanges (CEX), making it usable by on-chain transactions like auctions and liquidation.
The DODO has already taken a market cap of $450 million. The use cases of DODO are as follows:
- Crowdpooling and IDO allocation
- Minting vDODO
- Trading fee discounts
REN is decentralised interoperability protocol which lets you allow cryptocurrency users to transfer any type of token between blockchain. The cross-chain value transfer system doesn’t work by creating any kind of synthetic tokens or wrapped one but it only transfers liquidity within ecosystems with their smart contracts.
The concept that makes renBTC work is almost similar to that of wBTC. The difference only lies in the fact that unlike wBTC, the Bitcoin is kept along a decentralised nodal network that are called Dark Nodes and in case of REN, it is governed by codes. The REN Virtual Machine can easily be integrated into several DeFis to offer them liquidity.
The REN token has gathered a market cap of $1.1 billion and it is primarily used as a Bond to make a dark node operate.
PancakeSwap is an automated market maker decentralized exchange made via the Binance Smart Chain which doesn’t require any KYC. This project gets funding from Binance as a part of the DeFi acceleration program on the Binance Smart Chain. PancakeSwap has in-built yield farming tools through which you may stake tokens and earn cake or other BEP20 tokens. It has got lottery tickets, an auction market for different NFTs, initial farm offering and gamification through use of leaderboards, community teams, tasks and achievements.
The CAKE token has gathered a market cap of $450 million and they’re mainly used in staking. Apart from that, the CAKE token can also be used for crowd pooling, NFTs auctions and participation in different features of the PANCAKESWAP environment.
To conclude, it can be said that 2021 is going to be a year when we will see dozens of projects with interesting capabilities and tokenomics that will revolutionize and bring over a major overhaul to the cryptocurrency industry. Now that you know the best 5 DeFi tokens, keep an eye over the best opportunities. However, don’t forget to do your own market research because there are very few instances of the risks involved.