The upcoming altcoin season will likely bring good luck to many DeFi projects. Let's figure out what tokensDeFi platforms will be able to show maximum growth in 2021.
Decentralized Exchanges (DEX)
A decentralized exchange (DEX) isa type of cryptocurrency exchange where you can make transactions directly with each other, in the P2P format, without the participation of a centralized party. They typically consist of multiple smart contracts programmed to automatically exchange two or more cryptocurrency assets instantly.
Such exchanges are the basis of the entire decentralized finance industry. The most popular are Uniswap (UNI). It services so-called swaps and has been operating since 2018.
Users also love the Uniswap fork, SushiSwap (SUSHI), Venus, and Binance DEX, which runs on the Binance Smart Chain blockchain.
Credits and loans
Last year, new projects and directions appeared in the DeFi industry. For example, traditional financial services such as loans and credits have become available to cryptocurrency users.
Here's how it works:holders of digital assets place their coins on the platform for a certain period of time - this is called staking. From this pool of coins, loans are issued to those who want to borrow cryptocurrency and are willing to pay interest for it. In general, the whole process resembles traditional banking with deposits and loans.
Most lending platforms require you to provide other assets as collateral. The interest received from borrowers is used to maintain the platform and to pay income to lenders.
Annual Percentage Yield (APY) is the estimated return of a cryptocurrency holder who will stake their assets for a year. Examples of such platforms: Aave (AAVE) and Compound (COMP).
Decentralized exchanges also use staking to provide liquidity for swaps.
Derivatives
Derivatives, or derivatives, area new word in the DeFi industry. These are contracts whose value is tied to a specific underlying asset. For example, Bitcoin futures are derivatives that allow parties to agree on a purchase price for a BTC asset at a specific time in the future.
Options give you the opportunity, but not the obligation, to buyor sell the underlying asset at a certain price. In the DeFi world, cryptocurrency holders use derivatives to control things like TVL (total value locked), inflation, and even the cost of gas fees.
For example, the UMA and Yam projects proposed a complex scheme for ensuring the cost of gas in the Ethereum network.
Margin staking
Some DeFi platforms give usersthe ability to borrow money for staking. For liquidity providers on the platform, this is an opportunity to optimize returns. However, as is the case with regular margin positions, the user needs to pay interest on borrowed capital and manage risks wisely to avoid temporary losses.
Be that as it may, such platforms are quickly gaining popularity. For example, Alpha Homora v2 gained more than $200 million in staking within four days of its launch.
Insurance
The DeFi industry is still a big experiment.Many DeFi projects are being developed through trial and error and, as a series of hacks and thefts shows, users here face not only the opportunity to earn money, but also the risk of losing everything.
Some protocols offer insurance against losses. The most famous of them is Cover Protocol. Here, users deposit their coins for staking and in exchange receive insurance against losses.
But even such protocols are not immune from errors.Not long ago, COVER itself suffered from a hack. However, there are other projects working in this area, such as the recently launched Bridge Mutual and DeFi Insurance Protocol.
Where is it more profitable to buy DeFi tokens? TOP-5 crypto-exchanges
For the safe and convenient purchase of DeFi project tokens, we have prepared a rating of the most reliable and popular cryptocurrency exchanges that support deposits and withdrawals of funds inrubles, hryvnias, dollars and euros.
The most reliable platforms with the largest cash turnover have been for several yearsthe largest cryptocurrency exchange in the world is Binance.Binance is the most popular crypto exchange in the CIS, as it hasmaximum trading volumes and supports transfers in rubles from bank cardsVisa / MasterCardand payment systemsQIWI, Advcash, Payeer.
Especially for beginners, we have prepared a detailed guide: How to buy bitcoin on a crypto exchange for rubles?
| # | Cryptocurrency exchange | Official site | Site evaluation |
|---|---|---|---|
| 1 | Binance (Editor's Choice) | https://binance.com | 9.7 |
| 2 | OKEx | https://okex.com | 7.4 |
| 3 | Exmo | https://exmo.me | 6.9 |
| 5 | Huobi | https://huobi.com | 6.5 |
| 5 | Yobit | https://yobit.net | 6.3 |
The criteria by which the rating is set in our rating of crypto-exchanges:
- Work reliability— stability of access to all functions of the platform, including uninterrupted trading, deposits and withdrawals of funds, as well as the duration of the market and daily trading volume.
- Commissions– the amount of commission for trading operations within the platform and withdrawal of assets.
- Feedback and support– we analyze user reviews and the quality of technical support.
- Convenience of the interface– we evaluate the functionality and intuitiveness of the interface, possible errors and failures when working with the exchange.
- Platform Features– availability of additional features — futures, options, staking, etc.
- final grade– the average number of points for all indicators determines the place in the ranking.
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