Best DeFi Projects In 2022
The field of cryptocurrencies is developing actively. The past several years brought new opportunities in decentralized finance to the market. Many people who did not take crypto seriously are now radically changing their minds. It is time to find out about top DeFi projects and decide which one to join.
What Is DeFi?
DeFi, or decentralized finance, is essentially a set of services and applications created on a blockchain basis. Its main “components” are cryptocurrencies and tokens, and smart contracts. These tools are integrated into a single network offering services usually provided by banks and other financial organizations.
Providing services alternative to the banking sector is the primary purpose of such projects. They can be used by people who do not want or do not have the opportunity to deal with traditional financial institutions.
Why to Trust DeFi?
DeFi actively earns users’ trust by ensuring liquidity, security, and stability to achieve mainstream success. It is these characteristics that allow users to lot upon reliable earnings. While everything is quite clear with security (protection from fraudsters, data safety, and transparency of open-source codes) and stability, a little more attention should be paid to liquidity. It is, in fact, the property of an asset that characterizes the possibility of selling it at a market price quickly. The faster an asset can be sold, the more liquid it is considered. Below, you can find the best DeFi projects to invest in since they combine all the above qualities.
Top 10 DeFi Projects In 2022
There are several directions among the best DeFi crypto projects. The first concept is linked directly to assets, such as tokens, tokenized bitcoins, stablecoins, and more. The second approach relies on synthetic assets and allows users to access real markets (fiat currencies, precious metals, etc.) while retaining the benefits of a decentralized network. Payment systems will enable you to process thousands of transactions instantly and with lower fees. Also, a place of honor is occupied by credit protocols that work based on the interaction of pools with assets and decentralized exchanges (DEX).
Aave leads the list of top DeFi projects. It is an Ethereum token, which has an open-source, non-custodial protocol that allows for creating liquidity markets. Users of the platform can earn interest on deposits and borrow assets.
Uniswap is another open-source protocol and non-custodial crypto exchange at the same time. Users can securely exchange Ethereum and ERC-20 tokens without using the traditional order book model for crypto trade. Instead, the platform members can exchange assets, create new trading pairs, and add tokens to pools to receive commissions.
Curve is a decentralized crypto exchange with a liquidity pool. It also runs on the Ethereum cryptocurrency and is designed to serve two main purposes. The first is to provide liquidity providers with additional income, and the second is to ensure highly efficient stablecoin trading.
Another one of the top DeFi projects 2022 is Chainlink. It is an Ethereum token that powers an oracle system. This, in turn, allows other blockchains to securely receive information from multiple data providers and verify its authenticity. In addition, chainlink can convert information from various sources into smart contracts.
Ethereum helped create one more project, namely Compound. It is a decentralized service mainly aimed at lending. The owner of funds can consider it an open money market where users deposit crypto assets and borrow funds. The interest rates are formed algorithmically based on supply and demand ratio.
PancakeSwap is rightfully added to this DeFi project list. It is a decentralized cryptocurrency exchange platform created by anonymous developers. The service runs on the Binance Smart Chain blockchain. Pancakeswap uses BEP-20 tokens, but the developers have also created their own CAKE token to manage the project and reward its participants.
Serum also joins the top DeFi projects worth your attention. It is a new decentralized exchange (down to the protocol) created by the same team that crafted the FTX exchange. It is also the world's first fully decentralized derivatives exchange enabling cross-chain trading. Although Serum is Solana's original project (it does not run on the Ethereum blockchain), it is fully compatible with Ethereum and Bitcoin.
DODO is a liquidity protocol with a native token of the same name. Thanks to the latter, users can participate in sales of various tokens and receive discounts on commissions. It is important to know that the project is based on the scalable Binance Smart Chain blockchain and provides the necessary liquidity constantly.
Flexa is a payment network that integrates directly with retailers. AMP is an Ethereum-based digital token used as collateral for secure transactions. This project is actively developing multiple areas of cooperation.
The DeFi project list will be closed by Maker. It is a cryptocurrency platform based on the Ethereum blockchain. The project's main goal is to create a decentralized currency pegged to real assets, such as the dollar, euro, pound, gold, and so on. In other words, we are talking about so-called stablecoins again.
Choosing Best Project
There are many things to consider when choosing a project. For instance, you need to decide whether you are planning a short-term or long-term strategy, whether you are interested in projects based on proof-of-stake or proof-of-work, whether you prefer Ethereum or other cryptocurrencies, etc. You also need to read the opinions of experts in tokenomics and analyze their forecasts.
How to Invest in Projects?
To successfully invest in the best DeFi projects 2022, you at least need to create an online wallet, and it is even better to have several wallets (cold and hot). Also, you will not be able to buy assets without choosing the right application, platform, or site. In addition, it is worth developing a strategy. The most popular are HODL, yield farming, liquidity mining, borrowing, and lending. Finally, with all of this, plus hours of research, you are ready to invest in DeFi.
Where to Find
You can get access to projects, namely to buy tokens, directly through decentralized exchanges, crypto wallets, or various marketplaces. It should be borne in mind that acquiring tokens on an exchange is considered the most reliable and classic way. Therefore, follow the market news to avoid missing the announcement of a new fantastic project.
What to Consider Before Paying
Always check each project of your choice. The development team is responsible for its performance and quality. Pay special attention to security and data safety. Invest in multiple projects to have a better choice and increase the chance that you will benefit from these investments. Be sure to check the ratings of audit companies and blockchain observers. And, of course, do not invest more than you can lose.
The Future of DeFi Projects
The DeFi space is the most interesting today in terms of possible breakthroughs. It is also worth understanding that this industry will develop due to an abundance of its benefits, such as expanding access to financial instruments in countries with an underdeveloped banking sector, creating a truly decentralized market where the cost of services will not be determined at the request of the government or company executives, or receiving passive income from cryptocurrency assets. There are predictions that DeFi may even completely replace CeFi.
This best DeFi project list may change over time, as the indicators do not standstill. But the most important thing is not to lose your chance now. The DeFi industry constantly develops and brings both active and passive incomes to its participants. So, it is time to take care of your financial health and ensure a successful future for yourself and your family.
Frequently Asked Questions
What Are the Best DeFi Projects?
At the moment, you will find Aave, Uniswap, Curve Finance, Chainlink, Compound, PancakeSwap, Serum, DODO, Flexa, and Maker among the best DeFi crypto projects.
How to Choose the Best DeFi Project?
To choose the best option for investment, you need to study tokenomics in detail, find information on projects, compare various forecasts and expert reviews, and analyze your goals and choice of strategies.