The DeFi sector of cryptocurrency is valued at over $168 billion, with over $10 billion in assets traded over the past 24 hours alone. With all the DeFi projects in crypto, it might be confusing to figure out which ones are the real deal.
In this article, we list our pick of the top 5 DeFi coins to watch for 2022. The list below is ordered by market cap, lowest to highest.
Disclosure: This is not trading or investment advice. Always do your own research before purchasing any cryptocurrency.
#5 PancakeSwap (CAKE) – $3.9 billion
One of my personal favorites is PancakeSwap, the number one decentralized exchange on the Binance Smart Chain. Think of it as a direct competitor to Uniswap, which is a decentralized exchange on the Ethereum network.
Because CAKE is on the Binance Smart Chain, the main advantage that PancakeSwap has over Uniswap are the extremely low fees.
As a DeFi platform, PancakeSwap also allows users to earn rewards by Yield Farming. You can provide liquidity to PancakeSwap and get rewarded with tokens, which can then be converted to any cryptocurrency of your choosing.
As the top decentralized exchange on BSC, PancakeSwap has a great long term outlook for 2022. As crypto becomes more mainstream, exchanges like PancakeSwap will only see a surge in users and transaction volume, leading to an increase in overall valuation.
#4 Fantom (FTM) – $5.51 billion
Fantom offers the first DeFi stack built using the Directed Acyclic Graph (DAG) based smart contracts platform. It allows users to buy, sell, lend, and borrow synthetic assets on the platform.
Fantom has a fully functional app the users can use to earn with their existing cryptocurrency. There are a variety of ways to earn, including: Staking your existing Fantom, lending and borrowing assets, using your tokens as collateral, and much more.
Fantom is a fully decentralized DeFi platform, showcasing the benefits of the technology. At no point do users have to give up control of their funds, allowing for a new way of decentralized trading.
Since the DeFi space is still growing, Fantom is one of the most solid projects in the space. It was one of the pioneers in DeFi, coming out with the first truly decentralized stack. As the 6th largest DeFi project by market cap, Fantom makes for a solid pick for 2022.
#3 Uniswap (UNI) – $13.5 billion
Another personal favorite is Uniswap, the top exchange on the Ethereum Network. Uniswap is the king of decentralized exchanges and is the most popular DeFi exchange on the market.
Users can also earn from Uniswap by being a liquidity provider. The process is extremely simple and allows traders to earn rewards by Yield Farming with their existing tokens.
There are a lot of similarities between Uniswap and PancakeSwap. The main difference is Uniswap offers a different variety of tokens. Since most tokens are ERC-20 and not BEP-20, they are listed on Uniswap. This is the main reason for Uniswap’s higher valuation.
If you look at a metric like trading volume, Uniswap has $255 million, compared to PancakeSwap’s $431 million. The higher trading volume on PancakeSwap makes sense, as there are much less fees on the Binance Smart Chain.
Overall, Uniswap has a great long term outlook, especially as more users figure out how to use MetaMask and decentralized exchanges.
#2 TERRA (LUNA) – $18.4 billion
As the second highest DeFi project by marketcap, TERRA is one of the kings of DeFi. TERRA is a blockchain protocol with a set of stablecoins that fosters a thriving ecosystem, bringing DeFi technology to the masses.
The way TERRA works is by issuing a set of stablecoins that track the price of fiat currencies. The price volatility is absorbed by the LUNA token, which is TERRA’s staking and governance token.
This mechanism allows users to speculate on LUNA price, while enjoying the benefits of earning rewards via staking and Yield Farming.
As the second most popular DeFi project in the space, TERRA makes for a great long-term pick for 2022.
#1 Avalanche (AVAX) – $21.3 billion
The king of all DeFi platforms is Avalanche, the fastest smart contracts platform in the industry. In addition, out of any proof-of-stake network, AVAX has the most validators securing its protocol.
Avalanche holders are encouraged to stake their tokens in order to help secure the network and earn rewards. Avalanche is not just a single DeFi project but an ecosystem of dozens of exchanges, wallets, marketplaces, and much more.
As the top DeFi project on the market, Avalanche makes for a great long-term pick for 2022. If you’re looking to bet on DeFi for the next year, you can’t go wrong with Avalanche.
Conclusion
As the DeFi space matures, more and more users are joining the ecosystem. We’ve seen a drastic increase in userbase and overall adoption of decentralized finance application over the past year. That trend should continue throughout 2022, which means higher valuation for the projects in the space.
This is not trading or investment advice. Always do your own research before buying any cryptocurrency.
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