15 Best DeFi Projects To Watch In 2020
Decentralized finance (DeFi) is a system which is built on the public blockchains. Today, It has over $3 billion worth of assets locked into the DeFi ecosystem and is currently one of the fastest-growing sectors in the cryptocurrency space.
Accessibility is one of the main benefits offered by DeFi. There are more than 1.7 billion adults currently who do not have a bank account. DeFi aims to change that as it offers easy access to financial services. Additionally, users can maintain full control over their assets.
In this article, we will explore the trending Defi projects to look for in 2020. Let us dive deep into these top 10 Defi projects in detail.
What is Decentralized Finance (DeFi)?
Decentralized finance or DeFi is a term referred for financial services like borrowing, lending, and trading. It is built using decentralized infrastructure, such as public blockchains and smart contracts. It is also known as open finance.
Decentralized Finance platforms have their own tokens which have financial value. These are responsible as to how these platforms function on a larger scale. There is a considerable amount of Defi tokens due to a large number of Defi platforms available on the market.
Top Defi Token Trends 2020
The following companies are leading the pack and have captured the attention of leading investors, product builders, and blockchain stakeholders. Let us dive deeply into the top 15 projects to watch in 2020.
1) Compound DAI
Compound DAI was found by Robert Leshner who started developing the protocol in 2017. Compound allows borrowers to take out loans. They grant loans by taking their crypto assets into the protocol. The users will earn interest for their digital assets added to the Compound liquidity pool.
It is one of the top decentralized lending platforms which has over more than $840 million locked up in its liquidity pools. The token behind the leading lending protocol, COMP is earned by users for lending or borrowing assets. Further, COMP is also used to monitor some of the important protocol decisions. These can then be used to vote for another user on their Governance Dashboard.
Compound Finance is backed by some of the very prominent investors. These include Andreessen Horowitz, Polychain Capital, Bain Capital, and Coinbase.
2) Maker DAO
Maker DAO was found by Rune Christensen in the year 2015. Maker is the decentralized lending protocol that focuses on the creation of DAI. In Maker, every stable coin is pegged to the US dollar and is further backed by the collateral in the form of crypto. Maker DAO is a decentralized autonomous organization that is most popular among the defi tokens.
The MakerDAO makes use of the concept called Collateralized Debt Position (CDP). It is a smart contract which runs on the Ethereum blockchain. MakerDAO is a particular system that issues loans with a certain interest rate. It has currently over more than $1.4 billion worth of digital assets being locked in Maker protocols.
3) Uniswap
Hayden Adam found Uniswap in November 2018. It is a decentralized exchange protocol that runs entirely on smart contracts. It allows users to trade famous tokens directly from their wallets. It uses a mechanism called Automated Market Making for directly settling trades near market price.
Uniswap allows you to trade any Ethereum-based tokens directly easily and effectively. It also offers “pooling” where any user can become a liquidity provider, by supplying crypto to the Uniswap contract. The Uniswap users also receive rewards for providing liquidity to the Uniswap protocol.
It provides a considerably user-friendly interface. It has currently over more than $160 million worth of assets being locked in their liquidity pools.
4) Kyber
Kyber was found by Loi Luu, Victor Tran, and Yaron Velner, in the year 2017. It is headquartered in Singapore. KyberNetwork is a platform that allows the exchange and conversion of digital assets. They provide effective APIs and contract wallets that allow the users to easily receive payments from any token.
Kyber has its own governing system, KyberDAO. This makes use of their Defi token KNC. KyberDAO allows the KNC token holders to take part in the platform governance. KNC holders can use their KNC to vote on the proposals for the future of the platform. In exchange for this, the holders receive rewards that can be accessed by trading on the platform
The protocol is designed such that any user can contribute to the liquidity pools as Reserve Managers. This includes decentralized exchanges and one-off liquidity providers.
5) bZx
bZx was founded by Tom Bean in the year 2017. It is a fully decentralized protocol that offers leverage, lending, and borrowing. The protocol can be easily integrated into any of the other exchanges which can be either centralized or decentralized.
bZx is an Eherum based Defi lending platform that is completely for the traders. It uses a token system, which is further controlled by the smart contracts for process automation. bZx is a decentralized platform since it is not controlled by any one group or company.
The protocol also integrates relayers, DEXs, and Oracles. It also provides peer-to-peer trading/lending while retaining a user’s access to their funds and private keys.
6) Orion Protocol
Orion protocol (ORN) was found by Alexey Koloskov in the year 2018. Orion is a blockchain trading and investment platform. It combines trading, portfolio management, and wallet functionality. It also gives access to some of the prominent features included in the exchanges.
It has its own token called ORN token. It is an ERC-20 token that will be further converted to a native token The token will be used to pay for trading fees, advertising, and premium services such as margin trading
7) Aave
Aave was found by Stani Kulechov in the year 2017. Aave is a Defi lending system. It enables users to take and borrow a wide variety of cryptocurrencies with affordable interest rates. It is user friendly and includes some of the attractive features.
Aave Protocol is a leading company within the decentralized finance (Defi). Since its inception, it has seen significant growth and is currently one of the top decentralized finance. Their native token is $LEND. It has an open-source and non-custodial protocol. It aims to create money markets.
8) Curve Finance
Curve Finance was found by Shachar Bialick in the year 2016. The curve allows its users to trade between stablecoins with low slippage. It includes a low fee algorithm designed specifically for stablecoins. Curve presently offers 7 pools where users can stake their stablecoins to earn rewards, such as the new currencies.
The curve is one of the most popular Defi platforms which offers a simple interface. It is renowned for its user-friendly features and effective documentation. The company has been impressive in supporting other Defi projects in recent months. Currently, over more than $220 million is being locked in Curve pools.
8) InstaDApp
InstaDApp was found by Samyak Jain and Sowmay Jain in the year 2018. It is considered to be a trustless smart wallet for decentralized finance. It is an application that enables Defi users to seamlessly manage, optimize, and deploy their assets to get the best returns across protocols.
InstaDApp provides a user-friendly and attractive dashboard. This allows users to manage their Defi investments across protocols such as Maker, Uniswap, and Compound. InstaDApp provides a great starting point, particularly for beginners.
Currently, over $280 million are locked up in InstaDApp smart contracts.
9) Bancor
Bancor was founded by Galia and Guy Benartzi in the year 2016. Instead of going through a centralized trading platform, it helps to convert the digital tokens between each other. The digital assets offered in this platform are safely locked in Ethereum smart contracts for better transparency
Bancor works through the Ethereum blockchain. Bancor mainly aims to create liquidity for digital tokens. This is done through the use of the Smart Tokens. It is a service offered to increase liquidity in the market and benefit traders.
The Bancor Network has created an ideal solution in its decentralized network. Thus Bancor allows its users to instantly convert between two tokens without needing a different party to the trade.
10) Torque
Torque is the first crypto loan platform that provides indefinite term loans and fixed interest. Torque is a powerful Defi platform for borrowing assets with long term duration. It has prominent user-friendly features.
While Fulcrum is limited to borrowing money for trades, Torque allows its users to borrow money for whatever they like. While other popular Defi lending protocols such as Compound use a variable or changing interest rate, Torque offers borrowers a fixed interest rate so loans are much more predictable.
11) Mantra DAO
The Mantra DAO platform was found by John Patrick Mullin. It works on the mission of the rapid growth of The Mantra DAO ecosystem and reaches the platform towards whole decentralization. It has the team of expert blockchain personnel who have a lot of experience in the business platform
It has its native token called the OM Token. This token can be used to vote in the related parameters such as inflation level and interest rates. They can also be used as a security deposit for obtaining the loans. Mantra DAO platform is user friendly and the access to it is simple and secure.
12) Sperax
Sperax project was found by Yongge Wang at Silicon Valley, California in the year 2018. Sperax makes use of the concept of BDLS consensus protocol This offers more security and high performance when compared to the other BFT consensus protocols such as Ethereum Casper and Polkadot Grandpa.
Sperax is a decentralized system that has its native token known as the SPA Token. It is an ERC-20 Token which is built on the BDLS and sCOIN native stable coin. The Sperax platform has been funded by some of the internationally popular blockchain capitals such as Outlier Ventures.
13) 1Inch
1inch Exchange was found by two of the Russian developers Sergej Kunz and Anton Bukov. 1inch is a platform that sources liquidity from all major decentralized exchanges into one particular platform. This makes it very easier and also helps in providing an ideal price for the required trade
It uses the concept called smart contract technology. This facilitates to split a single particular transaction across the multiple decentralized exchanges. Since it does not hold the user’s funds, 1inch is often referred to as a non-custodial application. It thus works by continuously interacting with various crypto wallets
14) DerivaDEX
DerivaDEX is an Ehterum based platform found by Aditya Palepu. DerivaDEX is a decentralized exchange that focuses particularly on derivative contracts. It makes use of the DAO (decentralized autonomous organization) to resolve issues related to different queries.
The platform has currently raised more than $2.8 million in finance by virtue of a couple of rounds. It includes some of the notable investors such as Polychain Capital, Electric Capital, Coinbase Ventures, CMS Holdings, Dragonfly Capital Partners, Compound strategy lead Calvin Liu, and Three Arrows Capital
15) Acala
ACALA Network was found by Antonia Chen. It is a system managed by the decentralized platform. It helps in assisting different financial activities for all of the chains on the Polkadot network. It also promotes stability and liquidity.
ACALA Network offers its own native token known as ACA. It is a Polkadot token. These tokens can be used for the payment of stability fees, network transaction fees, and also the penalty fees in case of the liquidation. It is a governance token which can be used for parameter adjustments and the network upgrades.
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Conclusion
All the above-listed platforms are based on the research of the author and the bitcoinik team. Investors should do their own research before making any investment in any of the projects. The post is for educational purpose and will not be considered as financial advice
DeFi Tokens are completely trustworthy as they are built on the public blockchains. They also have various crypto verification methods. Since they require much less maintenance work, they typically have lower trading fees than other centralized exchanges. Thus, if you hold crypto you can use it as a collateral for obtaining a loan, instead of going through a conventional bank. Coming to the financial systems, banks have been operating over these years, DeFi can be the next thing to rise.
