March 5, 2021 | AtoZ Markets – The Decentralised Finance (DeFi) craze in the crypto money markets continues unabated. Data from The Block Research shows that DeFi is the fastest growing cryptocurrency market.
According to research, the native tokens of many DeFi projects saw a more linear increase in prices this year. This seems overshadowed by the spike last summer.
This is despite the development of several of DeFi's largest projects, such as Aave and Sushi. Only since the beginning of this year, their number has increased fourfold and sixfold.
Indeed, the value of DeFi tokens has increased, and their use in products has seen a similar increase in the past two months. Total Value Locked (TVL) is a measure of the value of tokens placed in DeFi products. It is just under $40 billion.
According to DeFi Pulse, the peak of $45 billion was reached on February 22, three times more than at the beginning of the year.
As such, AtoZ Markets' team compiled the 6 most successful DeFi coins in 2021, namely:
- Yearn. finance (YFI)
- Sushiswap (SUSHI)
- Chainlink (LINK)
- Uniswap Token (UNI)
- Compound (COMP)
- Polkadot (DOT)
What Are DeFi Tokens?
Decentralized Finance, is an upgraded financial application, system, or network, which has been created to transform the entire FinTech network into decentralized as well as transparent.
This can be achieved through the combination of blockchain tools, such as smart contracts, dapps, and Tokens, DeFi tokens are mostly Ethereum tokens, they may be asset pegged, fiat pegged, crypto pegged, or whatever.
DeFi tokens are end-user entities that will act as a medium for users, traders, customers or investors to take a vital part and experience the financial services in a newly created DeFi application.
If you really want to know more about DeFi, then watch the video below:
Six Most Successful DeFi Coins of 2021
1# Yearn. finance (YFI)
When it comes to successful DeFi coins in 2021, Yearn Finance comes to mind lately. The YFI coin, which is given as a reward to those who provide liquidity to the platform, is experiencing an incredible increase. While the amount of money locked in the protocol exceeded $ 625 million, YFI surpassed even Bitcoin as an intermediate value on August 18, becoming the first cryptocurrency to achieve this after Zcash in 2016.
Launched on July 17 as an 'experiment' by the platform's developer Andre Cronje, with a total supply of 30,000 units, YFI was originally traded for between $4 and $30. However, the coin, which has achieved a tremendous rise at the point reached, managed to increase its price above 10 thousand dollars. This means an increase of almost 2500 times in a short time!
2# Sushiswap (SUSHI)
SUSHI is the token offered by the decentralized platform Sushiswap. It is a token that can trade freely and it is available on all the major exchanges like Binance, OKEx, DigiFinex, and others.
It can be traded using other stablecoins and other crypto assets. The token can be used for providing liquidity as well. It is also based on the Ethereum platform. The incentive for the liquidity provider of SUSHI is 0.25% of the trading amount.
Read also: What is Uniswap? Everything You Need to Know
3# Chainlink (LINK)
If you go by Market capitalization, then the LINK token is having the highest market cap. The token is an oracle service on the decentralized platform that enables the users to access the data, payments, and other events without compromising on security.
It is a different one from the rest as it involves an oracle that provides the data from outside to trigger the execution of the smart contracts. It is one of the most promising DeFi projects in the current times having huge potential. At present, the rate of interest it provides to the investors is around 4.35%.
4# Uniswap Token (UNI)
It is one of the most popular and successful DeFi coins in the space. Uniswap is a protocol for exchanging ERC-20 tokens on Ethereum. It provides a user-friendly and low latency interface for direct ETH and ERC20 token swapping. Because of its DEX nature, Uniswap doesn't take any fees for itself. It's designed to function as a public good.
Many users prefer to use Uniswap because, unlike most exchanges, Uniswap doesn't have an order book. It uses a mechanism called "Constant Product Market Maker" which determines the exchange rate and price slippage. This token has one of the best security in the market and also the funds are not kept in the hot wallets completely. This adds to the level of security and boosts it up. Anyone having Ethereum can trade UNI and that is the best part about UNI tokens.
5# Compound (COMP)
Compound is a software running on Ethereum that allows borrowers to take out loans, lenders to provide loans by locking their crypto assets into the protocol. The interest rates paid and received by borrowers and lenders respectively are determined by the supply and demand of each crypto asset.
Compound allows you to receive profit at a faster rate than simple interest on the money you already have. This is achieved through its unique lending system. The longer you hold a balance with them, the greater the potential interest you're able to earn.
6# Polkadot (DOT)
When it comes to some of the successful DeFi tokens in 2021, we simply cannot overlook Polkadot. The coin has been around for a few years, but it only launched the genesis block of its Relay Chain in May 2020. Since then, the coin took quite a long time to see any major price movement, but things seem to have changed this year. On February 20, 2021, the DOT price skyrocketed to hit a new all-time high at $42.06, gaining more than 350% year-to-date.
At the time of writing, March 5, the coin traded at $34.60, making it the sixth-largest coin in the industry with a market cap of $31.62bn. As such, if you are looking for the best new cryptocurrency to invest in, then Polkadot is definitely worth checking out.
Will DeFi Continue to Grow in 2021
Although DeFi's growth in 2021 appears to be extremely rapid, there are indications that this growth is likely to be sustainable.
Institutional asset manager Grayscale Investments has also included DeFi coins to expand its wallet. Even privacy-focused browser Brave announced the launch of its browser-integrated DeFi wallet with access to a DEX in which users can exchange their assets.
If you're going to follow in the footsteps of Tesla, Mark Cuban, or Elon Musk, DeFi and the broader crypto space could see even more growth in the future.
Conclusion
While the cryptocurrency space has many projects with great potential, the above-mentioned six most successful DeFi coins are the most promising for 2021. DeFi tokens are the future of investment as it seems from the huge surge in their value in recent times. However, making a wise decision for investing in DeFi tokens is necessary.
Every DeFi tokens are not the same and thus you need to be aware of its tokenomics before investing in it. Make sure you know about its fees, hidden charges, price/ market capitalization, and underlying asset to make an informed decision.
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