Top 5 Defi Projects You Should Include in Your Portfolio in 2021

Handy Tips / 19.11.2020

The total value locked in the DeFi economy has surpassed $13 billion. These are insane numbers for an industry that is deemed is still in its infancy period. DeFi projects’ stocks jumped 85% in August, starting from $4 billion to $8 billion at the end of the month. As more folks continue to invest in the DeFi projects, the value is perpetually growing.

Centralized digital financing is prone to manipulation and control by any entity that claims ownership of a currency. DeFi projects help to eradicate the need for elements that were critical in traditional finance systems. These elements include brokerages and exchanges executed by banking institutions in trade. Overall, DeFi systems act like a financial institution that fully utilizes blockchain technology. 

Brief Summary on How DeFi works

DeFi systems use blockchain technology whereby DeFi token transactions are done through a blockchain network, e.g., Ethereum. Therefore, every purchase or trade of DeFi tokens done is recorded within a blockchain. The projects use blockchain-based dApps that have come to embrace other cryptos besides Bitcoin.

Dapps use a smart contract program that helps people directly buy, sell, borrow, and lend digital assets without cryptocurrency exchange platforms. Smart contract programs run using open-source software created by programmers that define protocols within DeFi platforms. These applications ensure that transactions are fast, secure, and reliable as possible for merchants.  

Like basic financial systems, digital currencies in DeFi platforms also have interest rates that grow within a period. Interest rates rise within the project similarly to digital and physical assets; as demand increases, the rates ascend. However, these projects offer more enticing returns to traders than in conventional banking systems. In that case, what are the top 5 DeFi projects that are a ‘must-have’ in your portfolio?

Top DeFi Projects to Consider

Yearn Finance (YFI)

The YFI value is about $17,000, with a 24-hour volume ranging from $500,000,000 to $600,000,000. The market cap of YFI is ranked at 27#, valued at $862,545,290. The number of YFI coins currently in supply is 30,000, with Binance being the most active market trading it.

The project targets people interested in investing in DeFi protocols but do not have time to study the problematic aspects of the DeFi system. Yearn.Finance generates earnings through withdrawal and gas subsidization fees. Using the YFI platform, aggregators leveraging DeFi can borrow and lend YFI tokens similar to banking systems.

Since its launch in February 2020, the token continues to see immense growth, with the assets in its token pool growing from less than $10M to hundreds of millions in US dollars.

Curve Finance (CRV)

CRV is a decentralized exchange pool on ETH that is efficient in stabslecoin trading. It was launched in early 2020 to enable stablecoin traders to enjoy low slippage and fees. The market value of CRV currently is $103,132,737 USD.

Stablecoins such as DAI, USDC, TUSD, and BTC are all supported in the Curve Finance pool. When trading stablecoins, it is by far the platform that offers the best prices. Profits are earned by swapping stable coins or providing liquidity to the various curve pools for a fee. 

Uniswap

Uniswap, according to Uniswap.org, is a decentralized protocol for automated liquidity provision on Ethereum. The project works under the ETH blockchain and allows ETH-based tokens, w.ithout traders depending on third parties for asset control.

Like CRV, Uniswap also has liquidity pools that investors can lend crypto and receive payment in exchange. It is the most popular platform among DeFi projects gaining many liquidity providers in 2020. It has no centralized token, making the platform fully decentralized with no owner to claim fees.

It also allows direct exchange of ERC20 tokens with a few technical advancements.

Wrapped Bitcoin (WBTC)

Now acknowledged as the 6th largest ETH token with a market cap of over $1.5 billion, WBTC is gaining popularity. The project can convert BTC to ERC20 tokens; it can add more liquidity to the Ethereum blockchain. The standardization of BTC to ERC20 is on a one-to-one ratio, making it crucial to the DeFi market.

Wrapped Bitcoin is a tokenized BTC, meaning WBTC and Bitcoin’s value is more or less identical. Besides the ERC20 token, the WBTC platform also includes Kyber, Ren, and BitGo systems, consequently combining several DeFi projects in one.

Anyswap (ANY)

ANY is a decentralized cross-blockchain swap protocol that uses Fusion DCRM technology. The technology gives ANY the ability to swap coins between any blockchain that uses the ECDSA signature algorithm. They include BTC, ETH, XRP, LTC, and USDT.

Anyswap is priced at $0.398744, with a market cap of $3,218,334. The number of ANY coins currently in circulation is 8,747,261 coins and a maximum supply of 100,000,000 coins. Profits are earned here by providing liquidity to the ANY pools and gaining fees by lending people digital assets very fast as there are no brokers to slow transactions.

The great advantage Anyswap gives is it serves traders across all blockchain platforms and that with low fees. Investors who are looking for large financial returns in the future should try out the project.

Summary

DeFi projects are the solution to cheap and decentralized transactions in the crypto market. Besides offering decentralization, every trader is one step closer to maximizing their returns with the projects’ endless profits. When one compares traditional investment platforms interest rates to DeFi projects, it’s a no brainer for a determined businessperson to pick the latter.

Anyone looking for a high earning investment should definitely capitalize on DeFi projects. YFI, WBTC, UNI, ANY, and CRV projects are worth looking out for in the coming months. DeFi projects are here to serve massive profits to business entrepreneurs and investors at large. 

Adam is an outgoing young lad who likes adventures and discovering new things. Despite his boring life, he loves writing about cryptocurrencies and exploring what blockchain technology can do for the coming digital world where all adventures will be virtual.