Top 10 Best DeFi Coins to invest
Top 10 Best DeFi Coins
The decentralized finance (DeFi) market has received heightened interest from crypto-enthusiasts in recent years — attracting investors from all across the world. In its simplest form, DeFi is a term used for financial applications built on blockchain technology — that aims to democratize the economic landscape by replacing centralized institutions.
Today, DeFi platforms can provide you with a full spectrum of financial services — ranging from trading, borrowing, lending, decentralized exchanges, asset management, and more.
The most popular DeFi platforms have designed their own native tokens, as a means to facilitate their operations as well as incentivize users. If you are interested in getting a piece of this innovative marketplace early — investing in DeFi coins is one of the best ways to go.
Here at DefiCoins.io — we take a look at some of the best DeFi coins in the market and study their role within their respective DeFi ecosystems. We also explain the process of how you can buy DeFi coins from the comfort of your home without paying a cent in brokerage fees or commissions
10 Best DeFi Coins 2021
Thanks to surging popularity and the emergence of new DeFi platforms — the list of DeFi coins is constantly growing. At the time of writing — the total market cap of the entire DeFi industry stands at over $115 billion. This is huge, especially when you consider how young the DeFi phenomenon is.
Here is a list of the 10 best DeFi coins that have contributed to the rise of this decentralized marketplace.
1. Uniswap (UNI)
Uniswap is a leading decentralized exchange that is currently dominating the DeFi market. It employs an Automated Market Maker system (AMM) to ensure that there is sufficient liquidity for the ERC20 tokens traded on its site. The Uniswap protocol has attracted a loyal following as per its crypto-asset solutions. It allows you to have complete control over your private keys, integrates with external wallets, and allows you to trade at low fees.
The UNI token was launched by the Uniswap protocol in September 2020 — as a means to reward its USERS. The DeFi coin entered the market at a trading price of $2.94. Over the course of a few months — the value of the coin has since skyrocketed to $35.80. The DeFi coin can arguably be deemed one of the best-performing tokens in the industry — with a surge of over 1,100% in a matter of just eight months.
It is also one of the best DeFi coins in terms of valuation, with a market cap of over $18 billion. When you purchase UNI, you will also receive incentives and discounts on the Uniswap protocol. For instance, depending on the size of UNI holdings — you will be able to vote on different policies proposed for the Uniswap ecosystem.
The Uniswap protocol has already come up with a four-year plan for its allocation of UNI tokens. Out of a total of 1 billion coins, 60% is reserved for Uniswap community members. The DeFi coin is already available to trade on popular cryptocurrency platforms such as Capital.com.
2. Chainlink (LINK)
Chainlink is arguably the most widely used decentralized oracle network currently available in the DeFi market. It feeds real-world data to smart contracts on the blockchain — serving as a link between the unprecedented amount of information going back and forth between crypto DApps. The provider has also released its own native token LINK, which has several functional utilities on the platform.
Thanks to the rising popularity of decentralized platforms, Chainlink has experienced significant growth since its launch in 2019. It has evolved to a point at which it can fund other crypto initiatives that can be of value to the Chainlink ecosystem.
In terms of market capitalization, LINK is one of the popular DeFi coins of the moment — with a valuation of over $14 billion. The DeFi coin entered 2021 with a price of $12.15. At the time of writing, in April 2021 — the value of LINK has since hit all-time highs at $44.36. Many expect this upswing trajectory to continue over the course of time.
Over the years, Chainlink has proved to be one of the best DeFi platforms to have maintained its relevance in the industry. As it looks to expand the functionality of its DeFi platform, LINK will be able to provide other DeFi developers with additional flexibility. Considering these aspects, the LINK token is arguably one of the best DeFi coins to consider in 2021.
3. DAI (DAI)
For those unaware, the alternative financial market of cryptocurrencies and DeFi coins is famously volatile. For those who are looking to avoid price fluctuations, the DAI coin might be of interest. In a nutshell, this DeFi crypto coin is built on the Ethereum blockchain and has its value pegged to that of the US dollar.
In fact, DAI is the first decentralized, collateral-backed crypto asset of its kind. This DeFi coin is developed by the open-source software MakerDAO Protocol — which is one of the best DeFi platforms to use smart contracts to build different decentralized applications.
Currently, DAI has a market capitalization of $4 billion — making it one of the best DeFi coins in circulation. It has an exchange rate that mirrors the value of the US dollar against that of other fiat currencies. As you can imagine, the main advantage of staking DAI is to limit your risk of exposure to the extreme volatility of the wider cryptocurrency markets.
In addition, using DAI instead of fiat currencies can also help you reduce the transaction costs and delays involved when trading in the financial markets. Ultimately, DAI is of the best DeFi coins of its kind — so we expect big things for the project moving into the years ahead.
4. 0x (ZRX)
0x is a DeFi protocol that allows developers to build their own decentralized cryptocurrency exchanges. It also serves as a non-custodial DEX solution that allows users to easily trade ERC20 tokens. However, the notable difference is that along with its support for ERC20 tokens, the 0x exchange also facilitates ERC-721 crypto assets. In other words, this makes room for permissionless trading of a wide spectrum of digital coins.
In 2017, the open-source 0x protocol introduced the 0x (ZRX) coin. Like many other top DeFi coins, the ZRX coin also runs on the Ethereum blockchain and was originally intended to help govern its ecosystem. However, in 2019 — the 0x coin was assigned more utilities, such as staking capabilities for liquidity providers.
0x has performed exceedingly well since the beginning of 2021. In fact, the DeFi coin has since increased in value by over 500% — reaching an all-time high of $2.33 in April 2021. The token currently holds a market capitalization of over $1.2 billion. If you are interested in accessing the 0x protocol, you can trade this DeFi token from both centralized and decentralized trading platforms — such as the regulated broker Capital.com.
5. Maker (MKR)
Maker (MKR) is another DeFi coin that was developed by the team at MakerDAO protocol. While DAI was intended to bring stability, the purpose of the Maker coin is to serve as a utility token. In fact, the MKR DeFi token is used to keep the value of DAI fixed to $1. To achieve this, the Maker coin can be created and destroyed to balance the price fluctuations found in the wider marketplace.
Holders of MKR are accountable for adjusting the guidelines concerning the DAI stablecoin. If you are to invest in Maker, you will gain voting rights within the MakerDAO ecosystem.
Moreover, you will also be able to receive incentives in return for your participation in the governance of the MakerDAO protocol, such as lowered fees and favourable interest rates. With a market cap of over $3 billion, Maker is among one of the top 10 DeFi coins in the crypto market. If DAI is to perform well in the cryptocurrency trading arena, this might also reflect on the price of the Maker DeFi coin.
6. Compound (COMP)
Compound is another leading decentralized borrowing and lending platform that enables users to accrue interest on their crypto assets. The platform has designed several Compound liquidity pools for this purpose. Once you deposit your assets into one of such pools, you will be able to generate cTokens in return.
When you want to gain access to your assets, you can redeem these cTokens. Notably, since the exchange rate of cTokens increases over time, you will also be able to earn interest on your investment. In June 2020, Compound launched its native token — COMP. Holders of this DeFi token can get access to voting rights on the Compound protocol.
The platform has been gaining a lot of traction in the market, and its DeFi coin recently passed a market capitalization of over $3 billion. Compound entered 2021 at a price of $143.90. Since then, the Defi coin has surpassed $638. This means that in just four months of trading — Compound has increased in value by over 350%.
7. Aave (AAVE)
Aave is an open-source DeFi platform that functions as a crypto lending service. Its non-custodial liquidity protocol allows you to earn interest as well as borrow on your crypto assets. This DeFi platform was first introduced to the cryptocurrency market in 2017.
However, at the time — the platform was called ETHLend, with LEND as its native token. It primarily worked as a match-making system to connect lenders and borrowers. In 2018, the DeFi platform was renamed Aave — adding on new lending functionalities.
Today, the AAVE coin can be staked via the protocol to contribute to its security and performance. Moreover, you can also enjoy staking rewards and discounted fees on the Aave platform. The DeFi coin has several selling points — as it has real-world utilities in the increasingly crowded crypto lending market.
It is also one of the top DeFi coins in terms of valuation, with a market capitalization of over $5 billion. The AAVE DeFi coin has been enjoying a bullish market since the beginning of 2021 — rising in value by over 350% in a matter of four months.
8. Synthetix (SNX)
Synthetix is one of the fastest-growing DeFi platforms in today’s market. It is behind a well-oiled decentralized exchange that allows users to swap tokens on the platform. However, what makes Synthetix unique is that it allows users to mint their own synthetic assets — called ‘Synths.’ In simple terms, Synths are financial instruments that track the value of an underlying asset.
You can trade Synths for cryptocurrencies, indices, and other real-world assets such as gold on the decentralized exchange of Synthetix. However, you will need to have SNX — the native token of Synthetix to provide collateral against the Synths. This way, whenever your trade Synths, your SNX tokens will be locked up in a smart contract.
In addition, the SNX token also distributes a share of collected fees to its holders, allowing you to earn passive income. Considering this legitimate utility within the platform, the demand for SNX tokens could continue to rise. The token has already emerged as one of the best DeFi coins, with a market capitalization of over $2 billion. Over the course of the past four months, the price of the SNX coin has already increased by over 120% in value.
9. Yearn.finance (YFI)
Yearn.finance was launched in early 2020, with the objective of providing high yields for staking Ethereum, stablecoins, and other altcoins. The protocol enables this through its feature called ‘Vaults,’ which help to mitigate the high cost of Ethereum transactions.
Yearn.finance hopes to simplify the concept of DeFi for new investors, allowing them to optimize returns with minimal intervention. This DeFi platform has since gained additional attention from the market with the launch of its YFI token. The DeFi coin has a high market cap of over $1.5 billion.
However, there is a limited total supply of only 36,666 coins — which adds to the value of the Defi project. At the time of writing, the YFI coin is priced at over $42,564 — one of the highest in the market. This is an impressive figure, considering that the coin was introduced only in July 2020 — at a price of $1,050.
10. PancakeSwap (CAKE)
PancakeSwap is a decentralized exchange that allows you to swap BEP20 tokens on the Binance Smart Chain, a convenient and inexpensive alternative to Ethereum. Similar to Uniswap, this DEX also employs an Automated Market Maker system to generate liquidity pools. PancakeSwap launched its native token CAKE in September 2020. Users can stake CAKE on one of the many liquidity pools offered in order to earn more tokens in return.
The lower fees charged have since attracted a lot of DeFi enthusiasts to this platform. — driving the price of the coin steadily upwards. The CAKE token demonstrated a remarkable price rally in the first quarter of 2021. The Defi coin started the year at $0.63 and, on April 26, 2021 — hit an all-time high of $33.83.
This translates to a gain of over 5,000% in just four months. At the time of writing, the CAKE token also has established a market capitalization of over $5 billion, making it one of the best-performing DeFi crypto tokens of the year.
Important to Know
Needless to say, the rising popularity of DeFi coins indicates that the wider DeFi sector is on its way to reaching a broad financial market. The protocols we have listed here continue to show that there is a real demand, and room in the global marketplace for the respective products and services.
That said, there are several trends that are contributing to this success. For example, DeFi tokens are only one aspect of the broader DeFi ecosystem. In fact, these are being developed as a means to support decentralized protocols — which offer several other opportunities for you to capitalize on the DeFi phenomenon.
With that in mind, let us explore some of the best DeFi platforms that are dominating the market today.