The Financial sector is gradually reshaping into a Decentralize Financial system, where there seems to be a lot of benefits and transparency in the Financial industry. Many individuals have dived into innovation and they now look forward to knowing, where to buy DeFi crypto and the best DeFi trading platform.
In this article, you will learn where you can get deFi crypto and some of the top best DeFi trading platforms, and a lot more.
For the sake of those who still don’t understand the term “DeFi”, I will explain the meaning of DeFi in simple terms so even a layman would understand.
What Is DeFi In Simple Terms?
DeFi is an abbreviated word from the term “Decentralized Finance” and it has been gaining much traction from 2021 – 2022 and even now.
Thus, DeFi is a Decentralized Financial system where anyone around the world, regardless of your location can run a transaction of paying for goods or services without the need for a central authority or middlemen.
This type of system utilizes blockchain technology and it is built with a smart contract, which allows party A to easily transact with party B with little to Zero fees based on the types of blockchain technology he or she used.
One of the amazing parts about DeFi is, it is cheaper and stress-free, and it utilizes cryptocurrency as Traditional finance like the Bank utilizes the government issues fiat currency [paper money] for its services like Loan, Borrows, earning Intrest, Trade assets, Buy Insurance, and lot more.
Now that you now have a clear understanding of what DeFi is in simple terms. Let’s move on to some popular examples of DeFi crypto.
List Of Popular DeFi Tokens
As we have run through the meaning of DeFi, you might be skeptical about what a DeFi token is.
In Layman’s terms, a DeFi token is a Decentralized Financial application built on a particular blockchain with smart-contract.
The Ethereum blockchain has a lot of DeFi Tokens and here is the complete list of the most popular DeFi Tokens;
1. Avalanche [AVAX] – AVAX is traded on the Exchange Chain, which uses its own Avalanche consensus algorithm.
The Avalanche consensus mechanism, unlike proof-of-work or proof-of-stake, does not have a single leader processing transactions that are validated by others. Instead, all nodes use a directed acyclic graph (DAG) protocol to process and validate transactions.
Transactions are processed concurrently, and the random polling of validators ensures that transactions are correct with statistical certainty. This consensus mechanism has no blocks, allowing for immediate finalization and significantly increasing the speed of the blockchain.
2. Chainlink [LINK] – Chainlink, as an Ethereum-based ERC-20 token, is protected by the proof-of-stake (PoS) consensus mechanism. Unlike Bitocin’s proof-of-work (PoW) consensus, PoS selects node validators based on the number of staked tokens.
PoS protocols were developed in order to combat the massive power consumption required by PoW systems. PoS models are becoming more popular because they require less electrical power and are easily scalable.
While PoW has proven to be a reliable consensus mechanism, Ethereum and all other ERC-20 tokens have been rapidly growing and setting the market trend.
3. Maker [MKR] – MKR is an ERC-20 token, which means it is based on and secured by the Ethereum blockchain. Ethereum, for its part, is protected by the Ethash proof-of-work function.
MKR’s unique selling point is that it allows its holders to directly participate in the governance of DAI. Every Maker token holder has the right to vote on a number of changes to the Maker Protocol, with their voting power proportional to their MKR stake.
4. Internet Computer [ICP] – The ICP token has three primary functions. To begin with, ICP serves as a source of “cycles” that are burned to power computation (thus when ICP is converted to cycles, it disappears, creating deflationary pressure).
Second, ICP can be staked in the permissionless Network Nervous System DAO that governs the Internet Computer blockchain, resulting in the creation of voting neurons that generate voting rewards.
Third, ICP acts as a value store, allowing users to invest in decentralization sales run by web3 services.
5. Compound [COMP] – Everything on Compound is done automatically by smart contracts, which act to mint cTokens after depositing Ethereum and ERC20 assets and allow Compound users to redeem their stake using their cTokens.
The protocol imposes a collateralization factor on all assets supported by the platform, ensuring that each pool is always overcollateralized. If the collateral falls below the minimum maintenance level, it will be sold to liquidators at a 5% discount, allowing some of the loan to be paid down and the remainder to be returned to an acceptable collateralization factor.
This arrangement ensures that borrowers maintain their collateral levels, provides a safety net for lenders, and provides an opportunity for liquidators to earn money.
6. Ocean Protocol [OCEAN] – Ocean Protocol has a native token called ‘OCEAN’ built on the Ethereum blockchain.
Staking OCEAN tokens on datasets on the Ocean Market allows holders to directly participate in the data token economy. Stakers then become liquidity providers in the chosen OCEAN-data token pool, earning a portion of the pool’s transaction fees.
Thus, there are a lot more of DeFi tokens on Coinmarketcap, you can check them.
Related: DeFi Vs TradFi : Things You Must Know
List Of Decentralized Exchanges
While there are numerous DeFi trading platforms to buy or trade DeFi tokens, it is always advisable to trade on a DeFi platform that is trusted, secured, and reliable.
Here is the Five [5] best list of decentralized exchanges;
1. Uniswap Dex – Uniswap is a decentralized trading platform with a large daily volume of over 4 billion dollars. According to Coinmarketcap, it is one of the best DeFi trading platforms with the highest daily trading volume among others.
This Dex exchange is an automated market marker [AAM] and it is Decentralized and facilitates trade on smart contracts. Individuals can swap tokens, and earn passive interest through staking ‘UNI’ the native token of Uniswap.
UNI is also a governance token, which means, anyone holding UNI can vote to support the ecosystem.
2. DeFi Swap – Defi Swap is one of the best DeFi platforms because it also supports the best Decentralized exchange coin. Anyone can swap tokens, and stakes to earn interest and even yield farming.
DeFi swap is built on the binance smart-chain blockchain [BSC] and it has a native token called ‘DeFi coin [DEFC].’ This is used to facilitate transactions in its ecosystem.
Anyone can buy the BSC coin and trade it for any of the DeFi-supported Dexs tokens, e.g DAI, USDC, USDT, and a lot more.
One of the amazing parts is, anyone who buys and holds the DeFi swap native token [DEFC] can earn a passive income through the token’s taxation of up to 10% fee from users buying or selling the native token, and this 10% is distributed to DECF holders.
3. Pancakeswap – Another best Defi trading platform to buy or sell DeFi token is ‘Pancakeswap.’ This swap Dex platform is gaining a lot of traction, and it is on anyone’s slips.
Pancakeswap support over 50 deFi tokens and it is one of the cheapest and most user-friendly dex built on the Binance smart-chain blockchain like DeFi swap.
This Dex supports different trusted crypto wallets such as MetaMasks, Binance Smartchain wallet, and others. Users can manually add their desired token contract address to be purchased.
Pancakeswap charges are as low as 0.25% on trading fee which is used to buy back cake, the native token of Pancakeswap, and burn them to increase the scarcity of the token.
Individuals can earn passive income through staking the native token ‘CAKE.’ And this is undoubtedly one of the best DeFi trading platforms where you can buy DeFi tokens.
4. 1 inch – This is another best DeFi platform to consider using but, this DEX platform is quite different from the others mentioned above. 1inch is a DEX aggregator.
This means a 1-inch platform search around other DeFi platforms that offer the cheapest ways to swap your token. this may allow multiple swapping to get the best rate.
The amazing part about this DEX is that it doesn’t charge any fee but, the DEX exchange 1-inch partner with to run a swap will charge you for any transaction you do.
This is one of the best DeFi exchanges that support multi-chain, which means users can access tokens built on another blockchain like Ethereum, Avalanche, BNB Chain, Polygon, etc.
Individuals can also buy crypto with their bank card and store their holdings on the inbuilt DeFi wallet 1-inch offers. Anyone can buy a 1-inch token and stake it in a 1-inch liquidity pool to earn passive income through 1-inch tokens or other tokens.
5. Curve – This DeFi platform is one of the largest DeFi exchanges on the market. This DeFi platform is built on the Ethereum blockchain, and this exchange is slightly for trading stablecoins, and yield farming.
Any transaction done on this platform implies a transaction fee of 0.04%, and this fee is shared among all members of Curve DAO and those providing liquidity.
This platform supports some of the best crypto wallets such as WalletConnect, Trezor, Ledger, and more. The curve has numerous liquidity to choose from to earn passive income on your stable coin through its yield generation.
Individuals can get a share of the platform trading fees and also get the chance to vote on governance proposals through holding and staking the Curve native token to earn veCRV.