Pretty much everyone is talking about Decentralized Finance (DeFi) these days. CoinGecko and CoinMarketCap, not exactly the smallest players in the crypto market, even have separate listings for DeFi projects on their sites. But how do you choose the best DeFi coin from the huge range? With this article I will be glad to assist you on your journey. I have listed the 6 best DeFi coins for you.
But before I start with the 6 best DeFi coin, I want to explain what DeFi coin are ,why there are important ,where they come from(history) and Why you should invest in them. Just don't get confused yet I will make this post as short and simple has i can.
What are DeFi coins?
Investors from all over the world are closely following developments around blockchain and cryptocurrencies. At the moment, Decentralized Finance (DeFi) coins are very popular. Let's start by explaining exactly what it is and what crucial role it plays in the development of the cryptocurrency industry.
The goal of DeFi coins is to make financial services completely decentralized. This means that third parties, such as banks and governments, no longer have a finger in the pie with regard to transactions and other financial matters.
What are the most important features of DeFi coins?
Having second thoughts about investing in DeFi coins? Perhaps these key features will convince you:
It is independent: An important feature of decentralized financing is that it is independent of legislative bodies, financial institutions and government. Powered by decentralized apps (dApps), DeFi is navigating the sometimes complex world of financial transactions.
Interest from institutional investors is growing: DeFi's massive growth in 2020 has attracted the attention of global corporations, investment funds and major banks. For example, Spartan Group, an investment company from Singapore, recently announced the launch of a $50 million venture capital fund to support DeFi projects.
Covid-19 contributes to popularity: Due to the Corona crisis, many people have come to see DeFi as a safe haven to store and increase their money.
The potential is huge: From eliminating the middleman to converting small clips into valuable digital coins, the potential of DeFi is enormous.
History of DeFi Coins
2020 was not only the year of the Corona crisis but also that for DeFi coin.
DeFi coin is the youngest and fasters growing crypto that ever existed from 1 billion dollars in February 2020 to 19 billion 12 months later. Almost 20 times as much!
It was especially hard in May. The number of projects exceeded a thousand and DeFi now had 193,000 users. The growth only continued after that. In the summer of 2020, more than 600,000 investors made use of DeFi!
Explosive growth of the ecosystem
Have you fallen off your chair because of the numbers above? if the answer is No? Then i would like to try again. The number of individual DeFi addresses is now more than 926,600! And from July to November last year alone, the DeFi ecosystem grew from 4 billion to 14 billion. I can keep going. The fact is that this part of the crypto market certainly has the potential to change the international financial landscape forever.
When investing in DeFi coins, what should you pay attention to?
For novice investors, the crypto industry can be very overwhelming. There are all kinds of brokers, exchanges, digital currencies and now there is also DeFi. I recommend looking at the offer when choosing a certain coin.
This concerns both the total supply and the circulating supply. The former term refers to the total number of tokens that already exist. The circulating supply refers to the tokens currently in circulation.
Limited Stock
I should also not forget the limit stock. This is the maximum number of coins a cryptocurrency will ever have. For example, a maximum of 21 million Bitcoins is to be mined. However, it does mean that Bitcoin will become extremely scarce over time.
And that will probably have a positive effect on the price. Therefore, be well aware of the maximum limit before you choose a cryptocurrency. Some DeFi coins have a maximum, others do not.
The Success of Yearn Finance (YFI)
The larger the market cap and the smaller the circulating supply, the better the quality of a cryptocurrency and/or DeFi coin. Yearn Finance (YFI) is a good example of this. It has a high market cap and a low supply. As a result, the value of this coin has risen sharply in the past year. More details will be disclosed later on.
This keep getting long than i expected but it fun writing so let move one.
Pre-minted or not?
Another important factor to look at in addition to the supply and the market cap is the way in which a DeFi coin is launched. Is there mining or has that already happened before the official launch? The latter does not have to be a bad thing, provided there is a fair distribution.
It is not a good sign when a small group of investors have almost all the coins in their hands. In that case you run the risk that so-called 'whales', groups of people with a lot of money and crypto, will manipulate the price. They can single-handedly cause a price drop and this often has a negative effect on the smaller investor.
Pay Attention to Crypto released
Finally, pay attention to the way a cryptocurrency coin is released. Cryptocurrencies that have been mined in advance are often referred to as 'fortress'. This means that the coins will be released gradually over a number of years.
Many projects use a so-called fortress scheme. When you see a project release a huge number of tokens in a short period of time, the cryptocurrency is likely to fall in value quickly.
Nevertheless... Isn't it too late to invest in DeFi coins?
It is now clear that the DeFi market has grown enormously. But… aren't you too late with investing? Certainly not. There are dozens of interesting DeFi coins with a lot of growth potential. In this article i will talk/discussed about the 6 promising DeFi coin. Let start with Chainlink (LINK) and end with Wrapped Bitcoin (wBTC).
1. Chain Link (LINK)
Chainlink is a decentralized oracle. An oracle is an information facility that connects blockchains with off-blockchain information, i.e. from the outside world. The Chainlink network provides reliable and fraud-resistant inputs and outcomes for complex smart contracts on any kind of blockchain.
In short: this DeFi coin is able to get information in and out of a blockchain in a way that is both secure, reliable and decentralized.
What makes Chainlink unique?
LINK tokens are used by smart contract owners to pay for Chainlink nodes and to obtain information. The more links a node has, the more reliable it is. Therefore, Oracle vendors are incentivized to use as many LINKs as possible in their Chainlink nodes in order to maximize their revenue.
What is the future of Chainlink?
Chainlink has been around since 2017 and is therefore still a relatively new crypto currency. However, the decentralized platform is already being used in various industries. Farmers use it, for example, to insure themselves against bad weather. This means that smart contracts are drawn up via Chainlink to have insurance pay out if certain standards in the contact are not met.
For example, consider a certain amount of rainfall that is not achieved. The farmers are paid immediately when the program receives the weather data. And all thanks to Chainlink's smart contract. It is no surprise that the popularity of smart contracts and platforms such as Chainlink and Ethereum are gaining in popularity. In that respect, the future of these projects looks bright.
What are the advantages and disadvantages of Chainlink?
Every crypto project and every token comes with its pros and cons. Always research this before investing. I have listed the pluses and minuses of Chainlink for you.
Pros of Chainlink
Chainlink has a clear goal: It wants to increase the precision and the security and certainty of received data by decentralizing the execution of smart contracts. It makes it possible for both financial institutions and companies to use smart contracts over the network without having to spend a lot of money on the development of a new system or network.
LINK's popularity is increasing: This is especially true within the business environment, where their solutions are highly demanded by the world's leading companies. A small selection of Chainlink's partners: Google, SWIFT, Gartner and IC3.
Cons of Chainlink
The project relies on smart contracts: The success will depend entirely on the relevance of the use. Chainlink (LINK) is assessed in a similar way. Success depends on domestic use and the success of the system.
Lots of Coins to Be Released: Up to one billion cryptocurrency tokens are planned to be released. According to quotes from, so many coins present problems for maintaining a low price.
The ICO Failed: LINK's planned crowd sale campaign failed when trading ended 10 minutes after it started. Many investors felt they had been cheated, which negatively affected the reputation of the developers and the project itself.
2. Uniswap (UNI)
Uniswap is a protocol for trading ERC-20 symbols on Ethereum. It has its own token called UNI. Uniswap consists of a suite of computer programs that make it possible to trade ERC-20 tokens on the Ethereum platform. This is done quickly and easily thanks to the user-friendly interface.
Uniswap: successful DEX
Decentralized exchanges are in full development. They have to compete in ease of use and performance with well-known centralized exchanges such as Binance, Kraken and Bithumb. Every day, software developers think about innovative ways to build a successful DEX.
Uniswap is an excellent example of this. Hayden Adams launched it on November 2, 2018 and within a few years it became one of the most successful DeFi coins.
What is a DEX?
Uniswap is a decentralized exchange (DEX). This means that it operates without any central authority. For example, no third-party wallet services are used to store cryptocurrencies of Uniswap users. So as an investor you don't have to trust anyone with your money.
What makes Uniswap unique?
Uniswap is unique for several reasons. For example, it does not use an order book. Instead, it was done with so-called liquidity pools. This means that Uniswap users can lend their crypto to a special pool. In exchange for providing money, and at the end one receives compensation.
What are the advantages and disadvantages of Uniswap?
As mentioned, Uniswap is one of the most popular decentralized exchanges and for good reason. It offers many advantages, but also a few disadvantages. I have listed them briefly for you.
Pros of uniswap
Full custody of your funds: You will always have full custody of your funds. The risk of a centralized exchange is eliminated. With a traditional centralized exchange, there is a chance that the exchange will be hacked or go bankrupt, possibly causing your money to disappear. This is not the case with Uniswap:
No KYC procedure: Because you never give up ownership or responsibility for your funds, you don't have to give up your personal information. This is ideal for investors who want as much privacy as possible.
Making swaps is extremely simple: It's simple to start making money and making swaps. You also don't have to worry about your data being stolen or hacked because you never released it.
You can quickly access new coins: Centralized exchanges often have a lengthy process to get approval to trade. With the decentralized Uniswap crypto coins get faster access. That means you have faster access to the latest tokens.
Fees are low: Most decentralized exchanges charge fees. However, Uniswap's flat fee of 0.03% is much cheaper than other options.
Cons of uniswap
Counterfeit Coins: While this is an additional aspect of a perk I mentioned, anyone can list tokens on Uniswap. There are scammers all over the internet and here is no different.
Lots of price swings : The crypto market is young and volatile. New coins are subject to significant price fluctuations. It is important for investors to act quickly when a new token is launched. Keep a close eye on the live crypto price . You can make nice profits if you act wisely.
Transactions can fail: There are a few reasons why transactions can fail. For example, you may have chosen to pay a gas fee that was too low and did not meet the requirements of the miner. Or who knows, you specified a maximum price you would be willing to pay in exchange for another token. However, it may fluctuate during processing. Is that the case? Then the transaction fails. Finally, sometimes there is insufficient liquidity: The pool does not have enough funds to cover your transaction.
3. ox(ZRX)
0x is an open-source protocol built on the Ethereum blockchain that enables the peer-to-peer exchange of Ethereum-based tokens. For the decentralized financial industry, 0x has a relatively long history. 0x was founded in October 2016 by Will Warren and Amir Bandeali. What is the purpose of this DeFi coin and why is it a good investment?
History of 0x
0x completed its Initial Coin Offering (ICO) on July 16, 2017 and managed to raise $24 million in Ether from approximately 12,000 investors. Most of the aid for this project has come from venture capitalist firms, including Polychain Resources and Pantera Capital. Other partners include various Chinese investment firms, such as FBG Capital and Jen Advisors.
ox Purpose
Founders Warren and Bandeali aimed to create an easy-to-use and reliable exchange that others can build on with 0x. Since its inception in 2016, several exchanges have been built on top of the 0x protocol, including Zerion, Nuo, and Defi Saver.
ox Maximum stock
The 0x protocol is written in the Solidity programming language. 0x has maxed out the ZRX supply at 1 billion coins. 500 million ZRX symbols were marketed to the general public through an initial sale. 0x itself is public and thus accessible to investors around the world.
Pros of ox
Low Fees: Transfer certain off-chain transactions using relayers to avoid paying unnecessary fees.
Ability to ensure that the placed sell or buy orders are only available to a specific person: This is thanks to the “Point-to-Point Orders” system. This makes it possible to perform an exchange between 2 people in a safe way.
Community has a lot of influence: The token offers the possibility to vote for future developments of the project.
Developers get a lot of space: Developers outside the 0x team can use the protocol for their own needs.
Various extra options: With 0x Instant you can easily integrate a cryptocurrency exchange on your website or on a decentralized application. You will receive 5% on the generated commissions. With 0x Launch Kit you can become a relay and receive some of the commissions.
Cons of ox
Obtaining information is difficult: Obtaining information about the past experiences of project team members is difficult.
Competition: Other decentralized exchanges (DEX) already exist and are functional, meaning strong competition.
ICO did not go down well with everyone: During the ICO, the people who funded the project only received 50 percent of the tokens.
4. Yearn Finance (YFI)
There was no escaping the past year: Yearn Finance (YFI). This DeFi aims to perform all kinds of functions, ranging from aggregated liquidity to automated market making. What exactly does this mean and what makes YFI unique? Read on quickly for the answer.
What is Yearn Finance? (YFI)
Yearn Finance is a collection of Decentralized Financing (DeFi) products. It also wants to offer investors the opportunity to generate as much return as possible. At the same time, YFI functions as a kind of insurance policy on the Ethereum blockchain and offers the option to pool loans.
This is possible thanks to the help of all kinds of independent programmers. In addition, the control is in the hands of YFI holders. In this way, all parts of YFI can be delivered in a decentralized way.
Obtaining information is difficult: Obtaining information about the past experiences of project team members is difficult.
Competition: Other decentralized exchanges (DEX) already exist and are functional, meaning strong competition.
ICO did not go down well with everyone: During the ICO, the people who funded the project only received 50 percent of the tokens.
How does YFI work?
The above explanation sounds nice and nice, but many investors find the way YFI works quite complicated. To better understand this DeFi, delve into these four key products:
Vaults: Passive investment methods that allow you to automatically generate returns. Vaults are important because they help to keep the high transaction costs on Ethereumlager. By pooling capital, only one account (the controller of each Vault) has to pay a transaction fee (gas) when farming the proceeds .
Zap: This gives you the option to trade in and out of liquidity pools. This is possible with the help of five stablecoins, namely TUSD, USDT, BUSD, USDC and DAI
Yinsure: Insurance for smart contracts without KYC.
Earn: Helps investors look for the very best interest rates.
History of YFI
Yearn Finance was conceived by Andre Cronje, who can rightly be called one of the architects of DeFi. He knows a lot about coding and has contributed to several successful DeFi coins, such as Cover, Cream V2, Sushiswap and Akropolish. It is important to know that Cronje operates alone and thus determines whether YFI remains a success.
In several podcast and video appearances over the past year, he has said in many ways that he could leave at any time. He doesn't want to commit to anything or account for anything. This could have a negative effect on YFI in the future, but fortunately it is not there yet.
What makes Yearn Money unique?
Yearn Money is a special project in the world of DeFi. It is thanks to this DeFi coin that I now know the phenomenon of 'Yield Farming'. This means that investors earn crypto with the crypto they already own. Investors lend money to other investors through smart contracts. In return, one receives compensation in the form of crypto.
Maximum stock YFI
The Yearn Finance procedures native token YFI started with a maximum supply of 30,000 symbols. Yearn did not pre-mine for the launch, and the programmers did not receive any early funding – the distributing stock at launch was 0 YFI.
What are the advantages and disadvantages of YFI?
By now you already know a lot about YFI, but look am not done yet. Let's talk about the pros and cons of YFI.
Pros of YFI
The project became successful very quickly: It is an innovative product with an involved community and as a result it grew very quickly into a great success. In September 2020 it even surpassed Bitcoin in value.
It is a pioneer in the crypto world: Partly due to the success of YFI, more and more governance tokens are appearing that are managed by a community of investors. This brings crypto a lot closer to the ordinary investor. He or she exerts more influence than ever.
Cons of YFI
It's relatively new: YFI is a work in progress. It is an experiment and does not guarantee a successful end result.
The value of the token is unpredictable: The value of the token depends on several factors, such as the news and community involvement
It's public: This is both an advantage and disadvantage. Because YFI is open source, it can in principle be copied by competitors. In that case, this DeFi project could lose its unique status and fall out of favor.
5. Raceway (LRC)
Some cryptocurrencies take a little longer to get attention from the general public. Loop ring (LRC) is a good example of this. But since the introduction of its own decentralized exchange (DEX), investor interest is gradually increasing. What is Loopring and what makes it such a unique DeFi coin? Read on for the answer soon!
What is Loop Ring?
Loopring is an Ethereum-based decentralized exchange protocol that is being developed to allow individuals to trade properties across different exchanges. Loopring itself is not a decentralized exchange, but facilitates decentralized trading using order matching and modern techniques such as ring sharing.
Basically, it allows anyone to build advanced and order-based exchanges on Ethereum by using Zero-Knowledge Proofs. These are mathematical methods to verify a business without revealing underlying data.
History of Loopring
Loopring was founded in 2017 by Daniel Wang with the goal of scaling decentralized exchanges by making transactions faster and more affordable. Before founding Loopring, Wang worked as a software engineer at Google, among other things. He also founded the crypto company Coinport Technology Limited in 2014. So you can't say he has no experience in the crypto industry.
What are the advantages of Loopring?
Loopring wants to allow both decentralized and centralized exchanges to join its network. The merging takes place with an automated and decentralized system. That way, all exchanges get access to a variety of blockchains, increasing liquidity.
Thanks to the higher liquidity, investors benefit from the best possible rates. So they no longer have to delve into all kinds of exchanges, and that saves a lot of time.
6. Wrapped BTC (wBTC)
Thanks to the wonderful world of crypto, Bitcoin holders can now use their digital gold as a token in the growing DeFi market. It is hoped that this will yield significant returns. In a nutshell, this is the function of Wrapped BTC (WTBC). What exactly is it, how does it work and why is WTBC a unique DeFiCoin? Read on quickly for the answer.
What is Wrapped BTC?
Wrapped BTC (WBTC) is an ERC20 token that enables Bitcoin holders to use a Bitcoin token in Ethereum-powered decentralized applications. This DeFi coin can also be traded on decentralized exchanges (DEX). Wrapped Bitcoin is therefore not Bitcoin. It is an ERC20 token that runs on the Ethereum blockchain. Many of Bitcoin's properties will be lost after WBTC's tokenization, such as:
The safety and security of the Bitcoin network.
The capacity to make instant transactions through the Lightning Network.
Some of Bitcoin's personal privacy elements.
Why is wBTC interesting for DeFi investors?
Converting BTC to WBTC opens up all kinds of new possibilities. Most importantly, "digital gold" allows investors to participate in the decentralized market. Tokenized Bitcoin is therefore certainly interesting for DeFi investors. In addition, both Bitcoin and DeFi are currently on the rise. The result? nice returns.
A wrapped token: what exactly is it?
A wrapped token has the current value of the native token. In other words: at the time of trading, 1 wBTC is equal to one BTC. wBTC represents the value of Bitcoin and makes it possible to use this crypto to power the Ethereum blockchain. The big advantage of this is that a dApp or smart contract on Ethereum can now also contain Bitcoin. This is certainly not the only plus of wBTC:
Faster Transactions: The block confirmation is shorter on the Ethereum network and therefore Bitcin transactions are executed faster.
Greater liquidity: The liquidity for all kinds of applications on the Ethereum protocol is greater, such as DeFi.
It's more scalable: The wrapped tokens exist on the Ethereum blockchain, not Bitcoin. As a result, wBTC transactions are not only faster, but also cheaper.
What features does wBTC have?
In the current DeFi market you can use WBTC in all kinds of ways. For example, it can serve as collateral to protect crypto-backed financing. Some investors earn income from it by earning liquidity mining/yield farming income. In addition, the interest in decentralized loan pools has increased partly due to the success of DeFi coins and wBTC.
So there you have it DeFi is a movement that – according to many – is now moving at such a rapid pace that it is unstoppable.
I think I need to rest for the whole day: So far this is the longest article I have ever written ✍️ in my entire life.
Thanks' again for reading 😀🥰.
DeFi has been a great addition to the world of crypto, it's been more exciting since the last quarter of 2020. I keep adding more DeFi gems to my portfolio on the truly non-custodial wallet application from https://atomicwallet.io/.