Without a doubt, dApps will continue to disrupt the crypto world as companies are investing heavily in the development of the DeFi ecosystem. Likewise, investors are willing to earn more returns by plowing various cryptocurrencies back into DeFi, which in a way is also responsible for the growth.
Decentralized Finance, or DeFi, is gaining more credence from crypto enthusiasts daily with the development of dApps, which utilize the Ethereum blockchain. The blockchain’s smart contract eliminates the need for middlemen during transactions, therefore, creating secure, efficient and fast transactions.
DeFi Projects You Should Follow in 2021
Following the rise in popularity of DeFi in 2020, many crypto users are on the lookout for projects that can help them maximize profits this year. Some of the projects you can follow in 2021 include:
Aave is built on the Ethereum blockchain and is best described as a lending pool that gives both lenders and borrowers access to 17 different cryptocurrencies including ETH, SNX, YFI and stablecoins like DAI.
To incentivize users and facilitate lending and borrowing, the platform has two types of tokens; the aTokens and AAVE tokens. The aTokens are issued to lenders who deposit to the liquidity pool so that they can earn interest on their deposits. The AAVE token, which is the native coin, offers more benefits such as discounted fees when borrowers use AAVE as collateral.
A phenomenal attribute of the Aave protocol, which is why crypto users are crazy about it, is the “flash loan” feature. This provides an avenue for advanced crypto users to have access to flash loans, borrow as much money and repay within the same transaction very fast. Users can profit from this through arbitrage, collateral swapping and wash trading.
Just recently, on the 26th of January, AAVE reached a new all-time high at $278. 90 with its TVL (Total Value Locked) reaching a new high of $3.75 billion. This is a result of the spike in demand for flash loans by investors. Thus, making Aave a great project to follow this year.
Compound is simple and user-friendly for both beginners and advanced traders alike.
It is a money market protocol that lets users deposit cryptocurrencies to earn interest, or borrow other crypto against the deposited tokens.
Lending and borrowing on Compound is easy, as transactors do not have to hassle with the interest rate. The interest rates for lending and borrowing are automatically fixed and adjusted algorithmically based on supply and demand. A great attribute of Compound is that it requires only a crypto wallet and internet connection to participate in lending and borrowing on the platform.
It is definitely a game-changer in the DeFi space. After more than a year of delivering blockchain-based tools to 50,000 users, Nimbus has shifted to DeFi. The launch of their DeFi platform and native utility token NBU on the 27th of January shows the potential of their new DeFi functionality as a market cap of $35 million was reached just within 2 days after the launch.
Nimbus aims to become a one-stop-shop for those willing to diversify their portfolio without having to switch between multiple native tokens of different projects. On their new platform, Nimbus is set to launch four different decentralized apps in 2021: a peer-to-peer lending dApp, crypto Arbitrage-Trading dApp, IPO Hub dApp, and Crowdfunding dApp.
One advantage of the bold unprecedented move by Nimbus is that individual investors can now access shares at traditional IPOs as well as take part in start-up equity and crowdfunding, which before now was restricted only to institutional investors and finance hoarders.
The DeFi community keeps a close eye on the project in anticipation of their NBU token listing on Uniswap scheduled for February 24. This will likely give a new boost to the already successful Nimbus DeFi Platform launch.
Curve Finance is also an automated market maker where anyone can add their assets to the various liquidity pools to earn profits. Curve runs on the Ethereum blockchain and is a decentralized exchange liquidity pool for efficient stablecoin trading.
The design of Curve finance allows for swapping stablecoins with low fees and slippage. Also, due to the dynamic system of Curve, it can also be used to swap tokenized versions of coins that are in a relatively close price range.
This is amazing because users can swap between tokens, such as swapping the various versions of bitcoin, like sBTC, renBTC, WBTC. This feature on Curve offers more options for its users, making it a great platform to follow this year.
Simply put, Synthetix is a protocol that issues synthetic assets on the Ethereum blockchain. Synthetic assets are instruments in the form of ERC-20 contracts called “Synths” that return interest on another asset, without the need to hold the asset.
The platform helps in the maturity of decentralized finance by introducing non-blockchain assets such as synthetic commodities, synthetic cryptocurrencies, synthetic inverse cryptocurrencies, synthetic fiat currencies into the crypto ecosystem.
On January 15, Optimism, an Ethereum scaling company, soft-launched Optimistic Virtual Machine (OVM) to solve Ethereum’s transaction problems. As a result, Synthetix co-founder, Kain Warwick announced that staking SNX, the platform’s native token, on OVM is now possible.
Although, the mentioned projects are not the only ones available in the crypto world. However, they exhibit great potentials that can help improve the crypto ecosystem for all users.