Decentralized finance (DeFi) refers to a collection of applications that eliminate the middleman in financial services such as lending, borrowing, trading, and earning interest. Increased use, more applications, and more investment in DeFi were all signs of its continued success. DeFi, in some ways, encompasses the entire cryptocurrency industry. After all, Bitcoin (BTC), the first , was create as a decentralized medium of exchange.
However, there are a few DeFi-specific players that are worth monitoring.
Lets know about DeFi top 5 players
Terra (LUNA) (DeFi top 5 players)
Since 2021, Terra has grown by almost 13,000 percent, and It’s a DeFi ecosystem that’s build on top of algorithmic stablecoins, which call the next generation of money. There is a plan to make a complete digital financial system that is based on stablecoins. Terra’s Chai payment platform is use by thousands of businesses in Korea, and its Anchor savings system is a big hit.
When you buy something that isn’t a cryptocurrency, like gold or the U.S. dollar, the value of that thing is link to how much that thing costs in real money. And unlike a stablecoin that is back by real money, an algorithmic stablecoin keeps its value by using a smart contract to make or buy coins. Terra does this by using the LUNA token to make or break the supply.
Aave is a relatively new entrant to the DeFi market. A decentralized lending platform enables users to borrow, lend, and earn interest on their cryptocurrency holdings. Consumers can deposit the cryptocurrency they wish to earn interest on into a lending pool. Borrowers can then obtain loans from the pools, with interest accruing to the depositors. It works similarly to how a traditional bank manages your money, but you receive a higher percentage of the loan interest because there is no intermediary.
Among the best DeFi tokens of 2021, ChainLink is a standout. It serves as a conduit for the massive amounts of data that are sent back and forth between crypto DApps. There are smart contracts on the blockchain that rely on real-time data feeds. Native token LINK has a wide range of applications on the platform. Decentralized platforms such as ChainLink have seen explosive growth since their inception in 2019. It’s expect that chain link cryptocurrency prices will rise over the next few years.
The Uniswap decentralized exchange is one of the pioneers of DeFi crypto projects. Additionally, it is one of the top ten DeFi projects for 2021. It makes use of an Automate Market Maker (AMM) to ensure that there is sufficient liquidity for ERC20 tokens trade on the site. This token gives investors complete control over their private keys and enables them to integrate with other external wallets, allowing for lower trading fees.
DAI is a pioneer in its field. How? It is among the first DeFi tokens to be collateralized by a physical asset. It was created by MarkerDAO Protocol, which is widely regarded as one of the finest platforms for developing decentralized applications and creating DeFi coins. Cryptocurrency and DeFi markets can be volatile and change prices quickly, just like any other kind of market. Any investor should be aware of this.
On the other hand, DAI isn’t as volatile as other coins. It’s a crypto coin called DeFi that was made with the same blockchain technology as Ethereum. And its value is linked to the value of the U.S. dollar because of this.