Decentralized Finance or DeFi, as the name indicates, is a technology that eliminates intermediaries traditionally associated with centralized finance, to give way to a more democratic, uncensored, yet secure mode of financial transactions.
Although it hasn’t reached its full potential, DeFi is considered the future of finance with its peer-to-peer, all-inclusive transaction features.
This article aims to guide you through some of the best DeFi platforms at the time that you could explore to be a part of a future that offers security, transparency, and better control over your finances.
Uniswap
Uniswap, a pioneer in the Automated Market Maker Model, was launched in November 2018. It was one of the first DeFi platforms that posed a competition against the crypto giant Ethereum.
Currently, in 2024, Uniswap dominates the market with its innovative features like concentrated liquidity that allows liquidity in specific price ranges, along with the seamless service it provides the customers.
Although the platform features hundreds of tokens, the most popular ones include stablecoins and wrapped bitcoin.
Aave
Flash loans are a unique feature of the platform, where it lends without collateral. Aave is an Ethereum-based platform that allows lending and borrowing based on smart contracts.
Aave stands as one of the top DeFi platforms in 2024 giving users options between the 17 different cryptocurrencies the platform features.
Except for flash loans, the borrowers need to post collateral before they can borrow so that they can be allowed a loan up to the value of the collateral they post.
aToken, the token the borrowers receive once they post the collateral has its value pegged to another asset in order to maintain a stable value.
Lido
Lido is a comprehensive platform for lending and trading and remains one of the top choices for users in 2024.
The platform was launched in 2020, supporting the post-Ethereum Merge consensus layer Ethereum 2.0, and layer-1 PoS blockchains alike.
LDO, the platform’s native crypto asset, is used as the medium to distribute governing rights of the platform, where an LDO holder gets voting rights in matters regarding the upgradation and features of the platform.
At competitive interest rates, the platform works in favor of both lenders and borrowers, enhancing the customer experience.
MakerDAO
MakerDAO runs based on the Ethereum blockchain, operating and maintaining DAI, the first decentralized, collateral-backed cryptocurrency.
It is all part of the Maker protocol that uses a combination of smart contracts and Maker Vault technology to generate new DAI without the intervention of the government or banks.
MKR, the native token of the protocol, keeps track of the changes to the Maker protocol. The token gives the users the right to vote, and voice their opinions in running the protocol.
Frax Finance
Frax Finance, which was formerly known as Decentral Bank was co-founded by Sam Kazemian, Travis Moore, and Jason Huan IN 2019, with the intention of creating a stablecoin, part of which is backed by collateral and the rest algorithmically.
The native token of the platform is called FRAX, which although initiated this way, later transitioned into a fully collateralized form.
Aiming to improve community involvement, the platform has introduced FSX, its governance token. Apart from lending and borrowing, the platform provides services such as automated market-making and liquid staking, adding to the customer-centricity of the protocol.
Balancer
Balancer is one of the oldest DeFi platforms, launched in 2018, as a decentralized exchange where users can buy and sell any cryptocurrency they like.
Its unique features include bundling up a set of eight tokens into a pool designed to automatically adjust asset allocations to keep a stable value even during price fluctuations.
The pools also adjust to different risk levels and other preferences of the users. The platform is built on six different blockchain networks including Ethereum.
Curve
Curve is one of the best emerging decentralized exchange platforms of 2024, that focuses on stablecoins.
Prioritizing stability as well as the diversity of the market, the platform provides low-risk, reliable trading options by maximizing the efficiency of stablecoin swaps.
Later, the platform added support for both Wrapped Bitcoins and Wrapped Ethereum apart from stablecoins.
The exchange is built on Ethereum and has a governance token called CRV that transformed the exchange into a decentralized autonomous organization.
The Bottom Line
Considering the dynamic nature of the Decentralized Finance spaces, this list could change at any moment.
However, as of now, these are some of the best platforms you should watch out for in the current year to make a profit on transactions, whether it is lending or borrowing.
