The decentralized finance market has been in the spotlight for several years. At the same time, many investors still doubt whether projects from this investment segment are worthy.
The DeFi sphere in 2021 reached an all-time TVL high of $ 90 billion, making a significant contribution to the capitalization of the cryptocurrency market. Let’s look at what DeFi projects to look out for ahead of 2023.
What is DeFi
Today, DeFi is not just a trend but a whole direction within which effective technical solutions are created to improve the current financial model. The developments offered by the decentralized finance market make it possible to optimize many processes and solve traditional banking problems.
The weight of DeFi proves the growing interest in the direction of institutional investors. The scale of the decentralized finance market can be judged by the number of funds blocked for the needs of the protocols. High volumes indicate a high level of DeFi significance.
The Attractiveness of DeFi for Investors
DeFi is a critical link in automating financial processes in the market through smart contacts. Developers are developing systems that will eliminate intermediaries in trade or lending.
One of the reasons for the growing popularity of DeFi projects is precisely the ability to abandon regulatory authorities. In this way, DeFi is opening the door to true decentralization.
Merchant trading firms and foundations are interested in the decentralized finance market, thereby providing liquidity to the DeFi protocols. Thanks to it, financial injections into the market have positive dynamics.
Unfortunately, the massive copying of the codes of well-known DeFi projects and new applications leads to the fact that the market is more and more filled with clones with small original changes. Similar startups are flooding the market. Therefore, it becomes more and more challenging to find the one worthwhile. Nevertheless, several promising DeFi protocols on the market allow them to make money.
The most popular types of DeFi projects are:
- lending protocols based on asset pools;
- synthetic and tokenized assets;
- payment networks.
Best Promising DeFi Projects
To find budding DeFi sites, you can analyze them by yourself or trust specialists’ opinions. Some areas on the network evaluate projects according to various parameters to compile a list of the best.
Consider the most promising DeFi projects.
The Chainlink network was developed as the first decentralized oracle to provide external data for smart contracts. It can link smart contracts to factual information such as payments or events. Chainlink offers a smart contract with access to any external API. Thus, you can make a payment through an agreement to any payment system or banking network.
Chainlink is partners with SWIFT, the world’s largest provider of secure financial transactions. Thanks to SWIFT, Chainlink will have access to thousands of high-profile banks and institutions worldwide.
Chainlink provides interoperability between chains like Bitcoin and Ethereum. It even allows traditional systems to be connected without significant changes to conventional institutions.
From an investment point of view, LINK token should have good growth potential, given the broad opportunities of the project.
Uniswap is an Ethereum-based decentralized exchange that allows exchanging of ERC20 tokens. Anyone can do this, moreover, to conduct transactions, registration, identity confirmation, and other things that are usually required by the exchange are not required.
The popularity of Uniswap today is incredible. The platform ranks first in Ethereum in terms of the volume of gas consumed and the consumption of network resources on commissions as a whole. It is Uniswap that, among other things, is responsible for the current growth in commissions and expensive ETH transactions. At the same time, the platform does not decrease the number of users because of this.
A feature of Uniswap is the requirement for the volume of tokens within a trading pair, which must be in a state of equilibrium in the liquidity pool.
Uniswap is the next step in the development of cryptocurrency exchanges. The platform works in a decentralized manner and, at the same time, perfectly fulfills its tasks. Its user base increases amid the decentralized finance niche boom in popularity and does not plan to stop.
The exchange copes with the responsibilities and works smoothly. Although it significantly consumes the resources of the Ethereum network, this is the cost of the current market situation. So Uniswap deserves a recommendation.
Aave provides users with the possibility of lending. There is a receipt at flexible interest rates of digital assets in debt. The idea behind the platform is elementary. Digital asset owners can participate as savers or borrowers. Lenders contribute digital coins to the pool. Borrowers can ask for a loan and receive it very quickly.
The platform stands out among other cryptocurrency features:
- Urgent loans. These are loans that must be repaid within a short time. The function can bring the most significant changes to the systems of decentralized finance. The client has the right to take out a quick loan in some pools in the network. The only condition is to return the assets before the transaction. The client has about 15 seconds to pay off the debt. If the request is not met, all transactions that occurred during this time are canceled.
- Switching tariffs. Dynamic rate change. Unlike other lending platforms, where there are restrictions on choosing a fixed or floating scheme, the service allows you to determine which one to use.
The token is issued according to the ERC-20 standard. The Aave uses an address system similar to Ethereum.
The PancakeSwap platform is a decentralized exchange powered by the Binance Smart Chain (BSC). The exchange does not require registration, and its users do not have a personal account in the usual sense. The user needs to link his wallet to the site to work with the exchange.
PancakeSwap is another AMM / DeFi app that allows users to exchange tokens, provide liquidity, receive commissions, and engage in crypto-farming.
But PancakeSwap isn’t just another DeFi app. PancakeSwap is built on the Binance Smart Chain and is the leader among decentralized apps in volume and number of users.
PancakeSwap can be used to trade BEP20 tokens and earn cryptocurrency through CAKE stacking and provide liquidity.
Terra Luna (LUNA)
Terra is a distributed network for day-to-day payments on the blockchain with two Terra and Luna tokens and a set of stablecoins pegged to various national currencies.
The Terra cryptocurrency is both price-stable and growth-oriented. The second coin, Luna, acts as a breakwater, absorbing market fluctuations. If Terra falls in price, the system buys coins by selling LUNA and vice versa.
The main advantages of the Terra blockchain are:
- The ability to run decentralized applications (dApps).
- High speed of transaction processing.
- Link with the traditional financial system.
- Maintaining exchange rate stability through emission control.
The Terra project has excellent potential. Terra could become one of the foremost blockchain e-commerce platforms in the future.