Decentralized Finance (DeFi) is a next-generation financial system built on blockchain technology. It enables transactions and services such as lending and trading without intermediaries like banks or brokers. Everything works directly – user to user – through smart contracts.
In this article, we’ll take a look at the best DeFi projects of 2024. We will cover different areas: decentralized exchanges, staking, lending, derivatives, cross-chain solutions and yield protocols. Top projects include Lido, Uniswap, Aave, Maker, Compound, Curve, Balancer and more.
What is DeFi?
DeFi is an ecosystem of decentralized financial services running on blockchain. Unlike traditional finance, there are no central intermediaries – instead, smart contracts do all the work. Major banks such as Bank of America consider DeFi to be more revolutionary than bitcoin itself.
The main goal of DeFi is to make finance accessible to everyone, preserve privacy and reduce censorship. Most DeFi apps issue their own tokens that are used for management, staking, or revenue generation.
What can you do with DeFi?
Within decentralized apps, users can:
- Exchange tokens on decentralized exchanges.
- Take and disburse loans without KYC and credit history checks.
- Participate in project management via DAO by owning voting tokens.
- Stack cryptocurrency with the ability to use collateral in other applications.
- Utilize cross-chain services, derivatives platforms, DeFi insurance, betting and gaming.
How to store tokens in DeFi?
For safe handling of tokens in DeFi, it is advisable to use self-storage wallets (self-custody). This means that only you manage your private keys. Such wallets are released, for example, by tastycrypto – in the form of mobile applications and browser extensions.
Top Decentralized Exchanges (DEX)
Uniswap (UNI) is the largest DEX in terms of trading volume and blockchain liquidity. Supports multiple blockchains and allows trading through liquidity pools.
Curve (CRV) – Specializes in stable coin and token exchanges like WBTC and WETH.
Balancer (BAL) – unique in that its pools can include up to eight tokens and work like index funds.
Best lending projects
Aave (AAVE) – one of the leaders in the lending segment. It allows borrowing and issuing dozens of tokens.
MakerDAO (MKR) – an ecosystem including the DAI stablecoin and a decentralized platform for lending against cryptocurrencies.
Compound (COMP) – One of the first DeFi projects to cause a boom in the market. Allows borrowing and earning from providing liquidity.
Leaders in staking
Lido (LDO) is the largest liquid steaking protocol. It allows users to generate revenue from ETH-stacking without having to block 32 ETH. Instead, users receive liquid tokens and can use them in other protocols.
Derivative protocols
Synthetix (SNX) – allows the creation and trading of synthetic assets that track the value of real or digital assets (e.g. sBTC, sUSD).
Cross-chain solutions
Stargate (STG) – facilitates the transfer of tokens between different blockchains. Supports more than a dozen networks, including Ethereum, and facilitates the interconnection of decentralized markets.
Yield Farming Protocols (Yield Farming)
Convex Finance (CVX) – A platform that optimizes revenue for Curve users by co-managing steaking and votes.
Yearn Finance (YFI) – Yield aggregator that finds the best passive income opportunities across the DeFi space. Users simply deposit funds and the algorithm allocates them to the most profitable strategies.
Conclusion
The DeFi market continues to grow and is already worth tens of billions of dollars. It provides a wide range of financial instruments without the involvement of banks and traditional platforms. If you want to participate in this new stage of financial evolution, consider using DeFi protocols and storing your funds in a self-storage wallet.
