As the DeFi space grows, there’s lots of debate about the best DeFi coins to invest in. We’ve witnessed similar debates after each technological evolution in history. Think about the debates that dominated our conversations when VHS became extinct, streaming apps replaced DVD, and tablets replaced books.
As cryptocurrencies have replaced traditional methods of payment, we’re now hearing lots of discussions about their merits. Cryptocurrencies are currently sweeping the financial world, and the blockchain industry is expanding rapidly. As a result, cryptocurrency fans have a wide variety of options. The most recent topic dominating conversations in this sphere is decentralized finance, or DeFi.
Why has the DeFi space grown so rapidly?
DeFi has arisen due to people’s desire to have more control over their financial options. Due to this trend, decentralization has entered a new era of financial services that is both trustless and transparent. In comparison to the centralized banks with which we are familiar, the decentralization of blockchain technology is turning the financial world on its head.
Even though plenty of people still out there question the concept of cryptocurrency and argue about the best DeFi coins to invest in, the popularity of cryptocurrency and DeFi has no chance of slowing down. You might have already jumped on the bandwagon or maybe you are still on the fence about the industry. Either way, you probably should know about DeFi and its impact on the future.
In this article, we will take a look at some of the best DeFi projects that exist and how they got to that position. However, before we dive into that, let us talk about what DeFi is. It’s also important to talk about the key differences between DeFi and CeFi (centralized finance).
What is DeFi?
DeFi stands for “decentralized finance.” It’s a catchall word for several cryptocurrencies and blockchain-based financial applications that are aimed at undermining intermediaries.
DeFi is based on blockchain technology – the very same technology that powers the most popular digital currency to date – Bitcoin. Numerous parties on the blockchain can duplicate a transaction history, guaranteeing that a single, central source does not control it. This is critical because centralized systems and human gatekeepers can obstruct and complicate transactions while denying consumers direct control over their finances. DeFi is unique in that it extends the use of blockchain beyond simple asset transfers to more complex financial applications. Unlike traditional digital payment methods such as Visa and PayPal, Bitcoin eliminates all middlemen from transactions.
To put this into perspective, when you pay for coffee with a credit card in a cafe, a financial institution sits between you and the business. In effect, this financial institution controls the transaction and retains the ability to halt, suspend, or record it in its ledger. With cryptocurrency, these institutions are no longer relevant.
Benefits of DeFi
Some key benefits of DeFi are:
- It does away with the fees that banks and other financial institutions charge for using their services.
- Users keep their money in a digital wallet rather than in a bank.
- Anyone can use it without approval as long as they have an internet connection.
- People can transfer funds within a few seconds or minutes.
To fully understand DeFi and how it works, it is essential to know how it differs from CeFi.
What is CeFi?
In centralized finance, a person’s money is kept by banks or corporations whose main objective is to make money. Third parties who facilitate money transfers between parties abound in the financial system, each demanding a fee for their services. Let’s say someone bought something with their credit card. The merchant submits the charge to an acquiring bank, subsequently sending the card data to the credit card network.
The network will then clear the charge and request payment from their bank. Once that is done, the bank approves the charge and sends it to the network, subsequently sending it to the merchant through the acquiring bank. Merchants are required to pay for their capacity to use credit and debit cards. This ensures that each company in the chain is compensated for its services.
CeFi vs. DeFi
When you compare both financial services, you will find plenty of similarities. Nevertheless, there are also significant differences between the two.
Firstly, a single organisation normally owns exchanges or trading platforms under a centralized finance environment. They offer several services to make cryptocurrency more accessible to their clients. Centralized exchanges are generally in charge of everything, including onboarding users and establishing ground rules. On the other hand, DeFi apps seek to decentralize ownership and turn it over to the community. While the developers build the application’s code, everyone has a say in how it should work. In other words, the community runs and maintains it.
Secondly, centralized finance users must register and follow KYC (Know Your Customer) regulations. This technique is commonly utilized to avoid criminal actions like money laundering and adhere to crypto guidelines. However, users don’t have to submit to KYC or set up an account to trade in the best DeFi coins, as long as they have a non-custodial crypto wallet like MetaMask.
Last but not least, users with their own assets have no choice but to trust exchanges and other centralized apps in centralized finance. They don’t have to trust anyone with their assets in DeFi, even if they want to trade them utilizing a peer-to-peer swap.
The best DeFi coins for crypto investors in 2023
Before we dive into the best DeFi coins and projects to consider in 2023, it is essential to consider some factors to pick the best investment for your investment portfolio. Those factors include:
- Current market capitalization
- Growth potential
- Past performance
- Objectives and road map targets
- Token cost price
- Exchanges that list the token
1) Lucky Block – The best overall DeFi coin to buy
Lucky Block emerged as the clear victor as the most valuable DeFi coin to invest in right now. The project, which launched in late 2021, is nearing completion as an innovative lottery game platform. In summary, the Lucky Block lottery ecosystem differs from traditional operators in that all gaming outcomes are decentralized.
Lucky Block games are run by a smart contract to provide a decentralized lottery platform. In essence, unlike many other forms of gambling, lotteries are not managed by state-sponsored organizations with ties to the government. If you understand how smart contracts work, you’ll know that the underlying code is immutable and resistant to alteration.
As a result, Lucky Block players can be confident that all game outcomes are random and fair. Furthermore, because Lucky Block is built on top of the Binance Smart Chain, people all over the world can play these lottery games. This is in stark contrast to how traditional lottery operators operate, limiting lottery games to citizens of the respective country. The Lucky Block token initially held its pre-sale in January 2022, raising an equivalent of $5 million in cryptocurrency. This token was launched publicly at the end of the month on Pancakeswap, where it has since become one of the best-performing digital assets of the year.
2) Colony Lab – The best DeFi coin on Avalanche blockchain
Colony Lab is the first community-driven, future-oriented fund. The Avalanche Foundation has previously supported and invested in this project. Therefore, it is effectively an Avalanche endeavor.
Avalanche (AVAX) prides itself as the “fastest smart contracts platform in the blockchain industry.” In addition, the platform is known for cementing its position in the growing NFT space. What’s more, AVAX has established connections with other blockchain initiatives like SushiSwap (SUSHI), Chainlink (LINK), and the Graph (GRT). Due to its ability to enable cheaper transactions a fraction of the time, the project sees itself as a direct competitor to Ethereum. Avalanche just received $230 million in financing to fund its DeFi activities, making it an attractive location for DeFi projects to establish themselves.
Colony Lab is a collection of smart contracts that serve as the foundation for an organization’s core operations. This project addresses the ownership, structure, and power of online groups in addition to funding.
So, where do you begin as an investor?
Buying tokens is the first thing you need to do. DeFi protects like Colony Lab need native tokens to run on networks. You can use the ticker symbol on exchanges to identify these tokens.
After you’ve bought the tokens, you’ll need to transfer them to a wallet that supports Colony Lab tokens. As a holder, you can use the tokens to shift money around. Since moving funds incurs transaction fees, you’ll want to find a network with the lowest prices. You should also be cautious when selecting a network by ensuring that you choose the correct one. It is prudent to research. This way, you can avoid being a victim of a con.
You’ll come across a variety of services on the network, the most popular of which is a decentralized exchange (DEX). What’s even better is the fact that you can also lend money and charge interest if you provide liquidity in exchange for interest. The options are limitless. All you have to do now is link your DeFi-compatible wallet to the supported network and log in to your account.
3) Uniswap – Top decentralized exchange
Uniswap houses a revolutionary exchange platform that allows traders to swap tokens on a peer-to-peer basis. For this reason, this project demonstrates the actual concept of decentralized finance. In other words, Uniswap eliminates the necessity for a centralized intermediary when buying and selling crypto assets.
This is a refreshing departure from what is conventional in the industry, which is dominated by centralized crypto exchanges like Binance, FTX, and Coinbase. Uniswap does not use standard order books to match market participants. Rather, the exchange acts as a go-between for buyers and sellers, resulting in substantial profits.
This platform has an automated market maker mechanism. In its most basic version, Uniswap’s AMM will establish token prices based on a variety of factors like volume, demand, and market capitalization. This allows users to trade bitcoins in a decentralized and frictionless manner.
UNI, the project’s native DeFi coin, is a top-25 digital asset by market capitalization. When the coin was first issued on public exchanges in 2020, you would have paid roughly $7. Two years later, UNI had already attained highs of about $17. This is more than a 140% increase. With this in mind, investors will be hoping for UNI to return to its previous highs of $40+.
4) Aave – A top decentralized financial platform with a liquidity protocol
Some of the best DeFi coins to invest in are based on Aave, a platform that allows users to lend and borrow various coins. Peer-to-peer lending is enabled by smart contracts. The entire process is based on a crypto pool on the platform. Users can lend crypto to earn interest or borrow money to pay interest.
The Ethereum blockchain powers Aave. Users rely on several algorithms and a network of computers running Aave to handle deals managed by smart contracts. You don’t have to rely on or pay traditional banks or financial organizations to keep your money safe on this platform.
Aave’s goal is to make basic financial services more accessible. In other words, you can lend and borrow without the involvement of banks, brokers, or intermediaries. Overall, you’re investing in technology while also having a say in developing it.
At the moment, the site accepts deposits in 26 different cryptocurrencies. You can also earn interest in these cryptocurrencies. Additionally, the site supports borrowing in 25 cryptocurrencies. ETH, LINK, and LEND are just a few of the alternatives available for depositing and borrowing.
You can examine each cryptocurrency’s borrowing and lending rates on the Aave website. Aave essentially employs an algorithm to calculate current rates based on use. If there isn’t much crypto left in the pool, the interest rate is high, allowing more people to deposit bitcoin. On the other hand, if users have only used a small amount of cryptocurrency, the interest rate is low, allowing more people to borrow.
Is it true that Aave offers access to more than one DeFi coin?
Yes, Aave is home to two of the best DeFi coins. The first is AAVE, the Aave protocol’s native governance token. Purchasing AAVE tokens is similar to purchasing stock in a firm. As a result, you can vote on protocol improvement ideas that could influence the protocol’s path.
ATokens, the second Aave token, are interest-bearing tokens lenders use to collect interest on deposits. The interest is sent straight to your wallet, and the tokens are tethered to the value of the underlying asset you’ve placed in a 1:1 ratio.
A flash loan is one of the most popular loans available on Aave, community members can use it take advantage of arbitrage possibilities in the crypto ecosystem. There is no need for collateral with a flash loan. You must, however, repay the loan in the same transaction, which generally takes only a few seconds. If this payment is not made within the same transaction, the transaction is reversed. There are only 16 million tokens available in the Aave system. 3 million of these tokens are held in reserve in the DeFi ecosystem for program development.
Aave staking is an additional feature of the Aave system. This is essentially a safety module where you can stake Aave tokens as a form of market insurance. For example, if one of Aave’s most popular stablecoins loses its peg to the US dollar, one can utilize up to 30% of the safety module to compensate for the loss.
5) Terra – a leading DeFi coin that outperforms the market
There’s no doubt that the global cryptocurrency markets, even those for the best DeFi coins, are overwhelmingly pessimistic heading into 2023. Having said that, the value of Terra, which continues to perform exceptionally well, appears to be unstoppable. Terra is a decentralized financial venture that specializes in algorithmic stablecoins.
Unlike most other stablecoins, Terra is not restricted to major fiat currencies like the US dollar or the euro. The Terra protocol, on the other hand, covers a wide range of national currencies, including the won of South Korea, the yen of Japan, and the yuan of China.
Terra is also a proponent of the SDR (Special Drawing Rights), the currency of the International Monetary Fund. According to CoinMarketCap, when Terra was first listed on public exchanges in 2019, it was going at just $1.30 per token. The same DeFi coin was valued at more than $90 in early 2022.
Terra’s value has soared by more than 6,800% in less than 3 years of trading. This DeFi coin was recently selling at just $44 in February 2022. As you can see, the project’s value has more than doubled in just 1 month. Terra has since risen to the top ten cryptocurrencies in terms of market valuation.
6) Fantom – Top platform for digital assets, dApps & smart contracts
The first cryptocurrency to offer smart contracts was Ethereum. Since then, however, it has been plagued by traffic congestion and expensive transaction fees. As a result, many alternatives have emerged, each of which provides faster transaction processing at a reduced cost.
Fantom, an open-source smart contracts platform for dApps and digital assets, is one of the alternatives. This platform streamlines synthetic asset borrowing, lending, and trading. All you have to do to begin benefiting from these features is log into your digital wallet and deposit tokens.
Fantom’s popularity is growing as a result of its network architecture, which provides a viable solution to the blockchain trilemma. Its goal is to strike a balance between security, stability, and decentralization. Thanks to a unique consensus method known as Lachesis, the platform is quick. As a result, transactions are practically instantaneous. As a smart contract-enabled blockchain, it provides a stable environment for the creation of decentralized applications.
Thanks to Fantom’s rapid transaction processing, transactions are finalized in 1 to 2 seconds. It can process thousands of transactions per second at a fraction of a cent each. With this in mind, it’s no surprise that by May 2021, the number of transactions on the Fantom platform had topped 3 million.
Fantom is a key component of decentralized finance (De-Fi), and it operates without the need for a central authority. The aBFT (Asynchronous Byzantine Fault Tolerant) POS consensus mechanism connects the company’s infrastructure. This maintains the entire network’s operational efficiency.
Fantom’s consensus process, aBFT is used to validate data and transactions on the network. As a result, Fantom users can reach a trusting and transparent agreement. Again, the aBFT network layout can maximize performance while maintaining network security.
Specific applications for Fantom
Due to its high throughput and quickness, Fantom is a popular platform for payments. It’s also great for governance and governance operations on the blockchain. This means that if you possess tokens on the FTM network, you will be able to vote on improvement suggestions. As a token holder, you can also propose changes, and use on-chain governance to make choices. The quantity of FTM you have will determine your level of influence.
Fantom is an excellent choice for staking rewards. You can get a minimum Annual Percentage Rate (APR) of 3.79?% and a maximum APR of 11.59% here. The APR is determined by the quantity of FTM staked and the length of the lock-in period.
Fantom is also used to collect network fees and compensate validators. This platform pays transaction fees as well as the costs associated with the creation of new networks and smart contracts, despite the low rate. FTM is also used to compensate validators who ensure that the platform is free of hacks and fraud while also validating transactions.
Users can mint fUSB using FTM tokens thanks to Fantom’s integrated DeFi stack. Fantom’s native stablecoin, fUSB, is tied 1:1 to the US dollar. It supports 176 tokens and synthetic assets, including fETH and fBTC, for trading, borrowing, and lending.
7) Decentraland – The best Metaverse coin
In the future years, the Metaverse is predicted to grow even more in popularity, with companies like Facebook rebranding their NASDAQ-listed businesses to include features of the Metaverse. If you want to get plugged into the Metaverse early, you can buy MANA tokens – Decentraland‘s original digital asset.
In its most basic form, Decentraland is a project built on the Ethereum blockchain that provides everyone with access to a virtual gaming environment. Users can buy virtual land and then create digital real estate on Decentraland. This is one of the most unique aspects of the platform.
You can use an open marketplace to sell this real estate, as well as a variety of other in-game commodities. For a variety of reasons, this business model has already demonstrated its viability. To begin with, certain real estate plots sold through the decentralized platform have raised more than a million dollars.
Secondly, the MANA token serves as the native currency for all Decentraland platform purchases and sales. This is currently a multibillion-dollar asset. MANA was just worth $0.025 in terms of performance in 2018. The crypto asset had reached highs of around $6 in mid-2021. This is a substantial increase of approximately 24,000%.
8) PancakeSwap – One of the best DeFi coins to this day
Another promising decentralized finance protocol is PancakeSwap. This DeFi initiative, which is built on the Binance Smart Chain as an automated crypto market maker, was launched just a year ago. PancakeSwap, like Aave, is a trading liquidity provider.
PancakeSwap customers had staked more than $5 billion on the decentralized exchange by the end of October (DEX). This DeFi coin is a steal when compared to peers like Uniswap, with a market cap of only $4 billion.
PancakeSwap is a convenient option for coin collectors for a variety of reasons. For one, PancakeSwap is based on the Binance Chain BEP-2. Binance is the world’s largest cryptocurrency exchange, with daily trading values exceeding $27 billion. Secondly, this platform has passed the CertiK audit. As a result, you can trust that PancakeSwap is reliable enough for a new investor who is just venturing into the best DeFi coins.
On PancakeSwap, you can swap tokens and cryptocurrencies without using an intermediary and preserve custody of your tokens. Although PancakeSwap is hosted on Binance, it is not controlled or operated by the exchange. PancakeSwap offers similar services to those from Uniswap and Ethereum DEX.
PancakeSwap is designed specifically for Binance Smart Chain BEP-20 tokens. You can use Binance Bridge to bring tokens from other platforms. Once you’ve done that, you can ‘wrap’ them as BEP-20 tokens and utilize them on PancakeSwap DEX.
Additional features that you can enjoy on PancakeSwap
PancakeSwap employs an automatic money maker (AMM) mechanism to enable crypto exchanges, relying on user-fueled liquidity pools. Users put money into the pool in return for LP tokens, which are used to pay liquidity providers. You can use these tokens to reclaim your share or a portion of the trading costs, and you can also use them to gain incentives by locking your tokens in the liquidity pool. Furthermore, you can exchange the tokens for the money you desire. You may also harvest additional tokens like CAKE and SYRUP on PancakeSwap.
After locking your LP tokens in the liquidity providers pool, you will receive CAKE as your first reward. You can now stake CAKE tokens in exchange for SYRUP tokens. Additionally, you gain more functionality with SYRUP tokens, such as governance tokens. You can also use some of the tokens as lottery tickets.
Another feature of PancakeSwap is that it simulates gameplay. You can, for example, bet on whether the price of Binance Coin (BNB) will climb or decline over a certain period. Users can purchase lottery tickets in the lottery feature in the hopes of winning a large CAKE prize. PancakeSwap also has a large selection of bunny-themed NFTs. In addition, there are IFO (Initial Farm Offering) sales where you can purchase additional coins from nascent projects.
9) Yearn.finance – Home to DeFi services and lending agreements
Yearn.finance specializes in decentralized financial services, with a focus on peer-to-peer loans. The platform connects borrowers and lenders, eliminating the need for a centralized middleman.
This is feasible through smart contract technology. The technology allows regular people to utilize Yearn.finance to borrow money without having to go through a credit check. Investors who want to earn a return on their idle cryptocurrency holdings support these loans.
Investors will benefit from this by earning a high rate of return. Yearn.finance also allows investors to supply liquidity for trading pairs. This results in an APY that significantly exceeds what traditional banks and financial institutions can give. You can invest in the Yearn.finance initiative by acquiring the Yearn.finance DeFi coin – YFI.
According to CoinMarketCap, YFI was initially listed on public exchanges in July 2020, at $907. Since then, the YFI coin has risen to over $93,000 in value. This equates to gains of more than 10,000%. Another significant advantage of this DeFi coin is that the quantity of coins is highly limited, at just over 36,000 tokens.
10) Cosmos – a top-rated DeFi coin protocol
Another top-rated DeFi coin to consider adding to your investment portfolio is Cosmos. This project provides an innovative solution to the problem of blockchain interoperability, which has been a long-standing concern. The Cosmos protocol makes it possible for competing blockchains to connect with one another. For example, thanks to Cosmos, Bitcoin would be able to access and extract data from the Ethereum blockchain, as well as the other way around. Cosmos has become one of the best DeFi coins of 2023 as a result of this exciting feature.
ATOM, Cosmos’ native digital token, was trading at slightly more than $21 a year ago in terms of performance. Fast forward to today, and the token is now worth more than $30. This is a decent increase of 35%.
DeFi has many advantages, including the elimination of intermediaries and brokers. It’s also a more reliable financial tool in nations with poor financial institutions. What’s more, anyone can set up DeFi and use dApps for seamless money management.
Despite all of its benefits, DeFi has yet to gain widespread acceptance. Perhaps this is because most people still do not have typical access to such platforms. Furthermore, the traditional financial system, which includes businesses and monetary authorities, is still hesitant to embrace new technology. Nonetheless, every project whose developers want to be a part of the future must adapt to a multichain environment. Otherwise, their project runs the risk of becoming obsolete.
How Pressfarm can help you promote your DeFi coin
If need help with your DeFi PR and marketing, help is at hand. By hiring a company like Pressfarm, you’ll get all the assistance you need.
Given that they’ve helped several clients achieve their goals, the Pressfarm team has what it takes to help you carve out a space for your project and stand out from the other cryptocurrency projects flooding the market today. The team at Pressfarm can help you create quality content that can attract media attention and earn public trust. With a professional press release, some engaging guest posts, and a branded media kit, you can earn credibility in the DeFi niche and excite potential investors.
In addition to creating this content for you, the team at Pressfarm can distribute it widely, thus boosting your online visibility. Pressfarm sends this content to the right media outlets, startup directories, and professional networks. In this way, the Pressfarm team can make it easier for your target audience to find you through organic searches. This strategy helps you rank well on search engines like Google, Yahoo, and Bing!
Once you sign up, the account executive at Pressfarm also builds custom media lists containing the best media professionals in your niche. You can combine the use of these media lists use of with Pressfarm’s media database of 1 million+ journalists, bloggers, and influencers. With all these media contacts, you’ll be able to continue doing extended media outreach for your brand long after Pressfarm has wrapped your PR campaign up.
One of Pressfarm’s PR packages could be just what you need to generate some buzz about your cryptocurrency project.