November 17, 2020 8:00 am by Eddie Mitchell
11,220 Investors read this
Decentralized finance (DeFi) refers to a number of platforms that offer “traditional” financial tools and services such as investing, borrowing, lending, trading, and insurance. It is one of the biggest trends in the blockchain industry, and in 2020, DeFi has had its biggest year yet, with the total value locked up these platforms exceeding $13b by Q4.
Top DeFi Platforms
In order to rank DeFi platforms, we have taken into account certain criteria that allow us to gauge popularity through a series of metrics such as total dollar value locked in the protocols, year of launch, and community following.
Name | Description | Platform Launch Year | Blockchain | Services | Total ($) Value Locked in DApp | Community Following (Measured by Twitter Followers) | Score |
Maker | The Ethereum-powered MakerDAO is a decentralized Collateralized Debt Position (CDP) platform that supports the stablecoin DAI, which aims to maintain its value one-to-one with the US dollar. Users can open a Collateralized Debt Position (CDP) by locking up ether (ETH) or other Ethereum assets as collateral to receive DAI as debt against the locked up assets. Interest payments are made using the MKR token, and the DAI and MKR paid are burnt once the CPD is closed out. | 2018 | Ethereum | Borrowing and Lending/Stablecoin | 2340000000 | 70900 | 4.5 |
Uniswap | Uniswap is a decentralized exchange on the Ethereum network that enables users to swiftly trade ERC20 tokens in an autonomous manner. It does so through an algorithm that matches trades based upon supply and demand in a liquidity pool, removing middlemen and intermediaries. | 2018 | Ethereum | Token Exchange/Lending | 3050000000 | 139000 | 4.5 |
Aave | Aave, formerly known as ETHLend, is an Ethereum-powered, decentralized peer-to-peer marketplace for borrowing and lending digital assets. The peer-to-peer lending platform enables borrowers and lenders to agree on the terms of a loan that is then executed using smart contracts. | 2017 | Ethereum | Borrowing and Lending | 1180000000 | 75300 | 4.5 |
Compound | Compound Finance is an Ethereum-based, open-source money markets protocol that enables users to borrow or lend against collateral. Anyone can take part in Compound's liquidity pool and can start to earn interest on their digital asset holdings. The interest rates adjust according to the supply and demand on the platform. Compound supports DAI, ETH, and USDC, among other digital assets. | 2018 | Ethereum | Borrowing and Lending/Stablecoin | 1420000000 | 51900 | 4.0 |
Curve Finance | Curve is a decentralized exchange protocol on which users can swap and trade Ethereum-based assets. It also focuses on providing liquidity to the markets using a market-making algorithm that automatically buys and sells assets whilst profiting from the bid and ask price spreads, which acts as the incentive for users to add their funds to the overall pool and earn interest. | 2020 | Ethereum | Borrowing and Lending/Decentralized Exchange | 855300000 | 43900 | 3.5 |
WBTC | A single WBTC is an ERC20 token with a value equal to one bitcoin. It was created so that BTC could exist and be traded on the Ethereum network, which also provides much greater liquidity to the DeFi ecosystem. It also enables users to stake BTC on interest yielding protocols. | 2019 | Ethereum | DeFi Token | 2000000000 | 4262 | 3.5 |
Harvest Finance | The Harvest Finance platform is similar to yearn.finance in that it aggregates yield farming protocols and automatically switches between the most profitable options. Users of the platform form a pool of funds creating a super investor, and this solves the problem of constantly paying transaction fees when tokens are sent to other platforms. | 2020 | Ethereum | Yield Farming | 909800000 | 10700 | 3.0 |
Synthetix | Synthetix is a token trading platform designed to allow for the tokenization of real world assets such as precious metals, stocks and currencies. Tokens created in this manner are known as “Synths”; once an asset is identified, a Synth copy of that “real-world” asset is can created in the Ethereum network. In doing so, Synthetix brings Wall Street-esque trading into the crypto world. | 2019 | Ethereum | Derviatives Trading | 685500000 | 42600 | 3.0 |
yearn.finance | The Yearn.Finance Protocol is an aggregator that aims to maximize earnings from yield farming platforms that leverage stablecoins. It does so by automatically switching between lending platforms as one becomes more profitable than the other. It does not however, change the actual token initially deposited. | 2020 | Ethereum | Borrowing and Lending/Yielding Farming | 369600000 | 49700 | 3.0 |
RenVM | RenVM is a platform that brings creates interoperability between blockchain, meaning that assets such as bitcoin can exist on other blockchains, such as Ethereum. In essence, it is a custodian service as when you send BTC to the platform for instance, RenVM will then mint renBTC with as an ERC20 token with a 1:1 ratio to that deposit. | 2020 | Ethereum | Cross-Chain Protocol for DeFi/DApps | 356100100 | 27400 | 3.0 |
Sources: DeFiPulse, DeFiReview, coinmarketcap, project websites
