The best defi cryptocurrency to invest in 2024

Discover the top-rated defi tokens, with high liquidity and promising communities.

The decentralized finance (defi) ecosystem is one of the fastest growing markets and promises to allow investors greater control over their assets without the need for third parties.

Defi total value locked (TVL) recovered to a whopping $179 billion in November 2021. However, according to DefiLlama, with the collapse of high-profile crypto companies in 2022, it fell to a local low of $35k. million dollars in October 2023.

The recent market-wide rally has helped defi projects gain momentum again. According to DefiLlama, the total defi TVL has increased steadily since mid-October 2023, reaching $52 billion.

This guide explores the best performing defi crypto assets with high liquidity and great communities. Before deciding which coins are the best defi tokens to buy, do your own research and consider the risks.

<h2 class="wp-block-heading" id="ethereum-the-godfather”>ethereum: the godfather

While many believe that the defi ecosystem was born with the creation of bitcoin (btc) in 2009, the ethereum (eth) blockchain provided a solid infrastructure on which to build defi.

According to data provided by DefiLlama, ethereum currently has a share of over 50% of the defi TVL, now standing at over $29 billion. It is important to note that Layer 2 networks built on the ethereum blockchain have been excluded from the TVL.

While ethereum is not a defi protocol itself, it still ranks first on this list because its base infrastructure has helped many defi platforms and decentralized applications (dapps) run smoothly and reach millions of users.

Furthermore, the development of ethereum made it possible for developers to run defi applications through its smart contracts.

Liquid Betting Protocols

Lido Finance: revolutionizing liquid betting

Lido Finance is a pioneer in the staking category and became the first mainstream liquid staking protocol in December 2020. Lido allows users to stake ethereum and backed assets while maintaining liquidity.

According to the project, this flexibility allows users to earn staking rewards without locking up their assets, a feature that can come in handy during periods of market volatility. Lido's impressive TVL of over $22.5 billion makes it the largest defi protocol in the web3 scene.

Holders of Lido's native token, LDO, can participate in governance decisions and benefit from the platform's overall growth. With the growing importance of liquid staking and Lido's focus, LDO has the potential to become a valuable asset.

Rocket Pool: decentralized betting

Rocket Pool aims to simplify the staking process on ethereum, taking a decentralized approach. Through resource pooling, Rocket Pool allows people to place bets with as little as 0.01 eth, making staking accessible to a broader audience.

The protocol's commitment to decentralization and community ownership, aligned with ethereum principles, is evident in its TVL milestones. The defi protocol currently has a TVL of $2.9 billion, a notable increase from the December 2022 figure of $604 million.

Rocket Pool's native token, RPL, recently attracted attention following Coinbase's investment in the token in August 2023. RPL holders have a stake in the protocol's governance decisions. As the protocol gains popularity and trust, the RPL token could see increased demand.

Decentralized Exchanges (DEX)

Uniswap: transforming token swaps

Uniswap is an automated market maker (AMM) that aims to democratize liquidity provision, allowing anyone to become a liquidity provider and earn trading fees.

With a TVL of over $3.8 billion, Uniswap is a critical piece of infrastructure in the defi ecosystem, facilitating seamless token swaps with minimal slippage and fees. Governed by UNI token holders, the protocol assures “active management” for token holders.

Due to its role as a governance token, UNI holders are actively involved in making decisions and shaping the future of the fast-growing DEX.

Balancer: enhance customizable liquidity pools

Balancer, a multi-token automated market maker, allows users to create or add liquidity to customizable pools, earning trading fees. Known for its flexibility, Balancer allows liquidity providers to create pools with up to eight tokens, setting custom weights.

Balancer's TVL has risen to over $993 million, placing it in the top 20 defi protocols by total value locked. As a result, the decentralized protocol now plays an important role in the defi ecosystem.

Balancer's native token, BAL, is central to the protocol's governance and liquidity incentives, making it easier to make crucial decisions like other protocols. The flexibility of liquidity provision and participation in governance positions BAL as a token to watch in 2024.

GMX: DEX spot and perpetual

GMX has quickly gained recognition as a decentralized venue and perpetual exchange on the Arbitrum network. By offering low exchange fees and zero price impact trading, GMX's TVL of over $600 million shows its rapid growth and growing interest from the defi community.

The GMX token has already demonstrated its potential to generate massive price increases this year amid a rally to an all-time high (ATH) of $97 in April. Despite being 45% below this value, the token shows promise due to the expansion of the GMX protocol.

Curve Finance – Stablecoin Trading Efficiency

Curve Finance makes it easy to trade stablecoins in the defi space. As a stablecoin-focused DEX, Curve uses an AMM to minimize slippage and facilitate seamless trading between stable assets. The platform promises additional commission income for liquidity provision.

Curve Finance spans multiple chains including ethereum, Arbitrum, Polygon, and Avalanche. The protocol has maintained its influence in the defi market despite the $47 million re-entry exploit in July 2023.

Loan protocols

AAVE: pioneering defense loans

AAVE operates as a decentralized money market protocol, allowing users to lend, borrow, and earn interest on cryptocurrencies.

The integration of functions such as quick loans and collateral exchanges has attracted investors to AAVE. It has solidified its position as one of the largest defi lending platforms.

The protocol's expansion to multiple chains, including Polygon and Avalanche, reflects its commitment to providing faster and more cost-effective solutions. The AAVE token emerges as a catalyst for advances, up an impressive 55% over the past year.

Compound Finance: Accessible Loans and Borrowings

Compound Finance differentiates itself from offerings like cToken for multi-asset support, no credit checks, and dynamic interest rates. Users can supply assets to the protocol's liquidity pool and earn interest or borrow against the collateral provided.

Compound has recorded one of the biggest increases in TVL as the protocol enters the top 10 in the defi sector. The COMP token, which represents a stake in governance, aligns the interests of all participants, contributing to a truly decentralized financial system.

Governance protocols

MakerDAO: the backbone of the DAI stablecoin

MakerDAO, one of the largest protocols in the defi scene, operates as the backbone of the DAI stablecoin. Pegged to the US dollar and backed by excess collateral, DAI aims to provide a stable and reliable form of cryptocurrency.

MakerDAO's system allows users to open collateralized debt positions (CDPs), lock collateral, and generate DAI.

The governance model involving MKR token holders aims to ensure decentralization. In 2024, MKR stands out as one of the top defi tokens to watch, given its role in the MakerDAO ecosystem by acting as a mechanism to maintain DAI stability as it is required for fees accrued from debt positions. guaranteed after the minting of DAI.

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