Many people are exploring the crypto world as they look to have total control over their finances. Decentralized finance (DeFi) protocols offer this opportunity. They allow users to access financial services without intermediaries like banks. This article explores the top DeFi platforms to monitor in 2024.
Leading Decentralized Exchanges (DEXs)
dYdX
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This decentralized exchange offers advanced trading services like margin and perpetual trading within DeFi. The best part is that dYdX does not require users to complete Know Your Customer checks, enabling trustless, anonymous trading. Moreover, crypto trading is offered at competitive fees. dYdX uses StarkWare for enhanced efficiency and lets holders of the DYDX token participate in the protocol’s governance system.
PancakeSwap
PancakeSwap was launched initially on Binance Smart Chain. The DEX has since expanded to eight more blockchains, one of them being Ethereum. It utilizes the AMM (automated market maker) model, which allows users to trade directly with each other without middlemen.
Besides crypto trading, PancakeSwap offers other services, such as staking and yield farming. The protocol’s user interface is beginner-friendly, allowing novice crypto users to navigate it seamlessly.
The zkBridge technology, which facilitates efficient and secure transactions across various blockchains, is one of PancakeSwap’s outstanding features.
Like dYdX, PancakeSwap has a native token, CAKE, whose holders gain voting rights and earn part of the revenue generated on the protocol.
Uniswap
Uniswap operates within the Ethereum ecosystem. The decentralized exchange is governed by its community. To take part in Uniswap’s governance system, you need to hold the UNI token.
Unlike centralized exchange, Uniswap uses liquidity pools that facilitate direct token swaps. This ensures crypto traders retain full control over their tokens while trading. Besides crypto trading, the DEX supports NFT trading by integrating with various marketplaces.
Curve Finance
Curve Finance, a top Ethereum-based exchange, facilitates the trading of wrapped tokens like sBTC, wBTC, and stablecoins. Web3 developer Michael Egorov is the brains behind the protocol, which adopts both the AMM system and liquidity pools.
Curve Finance is known for its high yearly interest rates on its several pools. It allows users who provide liquidity to earn an annual yield of up to 300%.
The DEX runs a DAO (decentralized autonomous organization). To be a member, you must hold Curve Finance’s native token CRV. The protocol has prioritized keeping its users safe, which explains why it conducts code audits regularly and offers bug bounties to the community to identify any vulnerabilities.
Balancer
In an effort to redefine the concept of DEXs, Balancer combines elements of index funds and automated market makers. Unlike conventional decentralized exchanges, which use two-token LPs (liquidity pools), Balancer uses a pool rebalancing system to adjust the asset allocations of a particular pool in response to any price changes.
Besides Ethereum, Balancer is available on six other blockchains. The protocol’s architecture enables interoperability, allowing users to move assets between supported networks.
As a DeFi platform, Balancer is governed by the community. To vote for any proposal, you must hold the BAL token.
Top DeFi Platforms for Lending and Borrowing
Aave
Aave is undoubtedly one of the leading lending protocols in the crypto space. As of May 2024, it has a TVL (total value locked) of $10.54 billion. Aave, launched initially on Ethereum, has expanded its presence to ten other blockchains. It offers loans in various cryptocurrencies, ensuring it meets the specific needs of users.
To join Aave’s DAO and have a say in key decision-making processes, you need to hold the AAVE tokens. The power of your vote is determined by the number of tokens you hold.
MakerDAO
With MakerDAO, users can borrow loans that attract both variable and fixed interest rates. The protocol requires borrowers to over-collateralize their loans to ensure lenders do not lose their funds if market conditions change.
MakerDAO issues and manages its stablecoin called DAI, which is backed by other cryptocurrencies. Finally, to participate in MakerDAO’s decision-making process, you must hold the MKR tokens.