- DeFi stays winning as new solutions are springing up on the blockchain.
- Ethereum blockchain, the mother of dApps, has increased its network and continues to add more utility to many industries.
- Decentralized exchanges (DEX), automated market makers, liquidity providers, and other DeFi projects created by developers are solving long-standing problems in finance.
- The more the projects, the more investment in Bitcoin and other assets.
There are over 3,000 DeFi projects on the Ethereum blockchain, with many more launching daily. The amount of money in DeFi solutions has risen astronomically. By the end of 2020, over $16 billion were locked in DeFi protocols.
Even though the Bitcoin blockchain was the first to be developed, Ethereum houses most of these projects because of its network and its initiative to be the first blockchain to support the creation of decentralized applications.
Top 5 DeFi Projects
DeFi is the new cool, and more people are associating with it than ever before. These DeFi protocols put the users in control of the platform, unlike the traditional centralized finance model that places a central body in charge of decisions and innovations.
These protocols have undeniable value as they now seek to perform the roles of traditional finance better. They include such innovations as collectible marketplaces, NFTs, decentralized exchanges, automated market makers, and liquidity-providing protocols. The top projects are:
This is the most popular decentralized exchange. Uniswap allows users to trade asset pairs with a market generated by an algorithm. Uniswap rewards its liquidity providers with a commission from trades in the pool. It has perfectly replaced the traditional order book system with smart contracts.
Games are not outside the reach of the DeFi space. The development of metaverses is even being fuelled daily by major institutional investors. Axie Infinity is an online game where users work with Axies. Axies, the characters developed in the game, are NFTs that have a monetary value.
Each one is unique, scarce, and valuable. Axie is a play-to-earn platform that has put money in the pockets of its players. Users may play for SLP (small love potion) which is earned by completing daily tasks and quests. Its native token is the AXS.
On the Flipside
- Although the proliferation of decentralization applications is good for the market, it may also have negative effects.
- Some developers may not put in the required work, which makes the technology porous.
- A proliferation of decentralized applications may make each independent one struggle for liquidity.
MakerDAO is a blockchain solution for lending, borrowing, and saving coins on the Ethereum blockchain. It has also rolled out its stablecoin called Dai. Stablecoins are a solution developed to address the high volatility of cryptocurrencies. They are coins that are backed to either a fiat currency or another asset or through algorithms.
One industry that has boomed in DeFi is NFTs. With the high demand for digital collectible, many marketplaces have been developed. Open Sea is the leading NFT marketplace. It offers lots of advantages and rare NFTs, plus lots of rewards for its users.