Blog Invest A roundup of the best DeFi cryptos in 2021

A roundup of the best DeFi cryptos in 2021

date January 20, 2021 time 6 min read 4802 views

Looking to invest in the best DeFi crypto this 2021? Here are some of the best-performing cryptocurrencies at the end of 2020 that you may want to look into when investing in crypto this year.

Decentralized finance coins are gaining more popularity among institutional investors.
Decentralized finance coins are gaining more popularity among institutional investors.

If 2020 was any indication, then the future is bright for all cryptocurrencies.

Experts predict BTC’s continued growth for 2021 with expectations of the crypto hitting highs well past the $100k mark. While Bitcoin continues to be the most sought-after crypto among investors, another class of crypto-assets has been moving its way to the front of the industry: DeFi cryptos.

DeFi assets have been quietly moving onto the crypto scene since roughly 2015 and reached a fever pitch in the second half of 2020. Total value of DeFi assets skyrocketed from $687 million at the start of 2020 to over $14 billion by New Year’s eve. In the first week of 2021, the value further grew to over $18 billion as of Jan. 4.

Much of the driving force behind their prices are the DeFi platforms behind them that have been consistently allowing customers to get crazy rates of return lending out their investments.

So which are the other best decentralized finance coins to invest in in 2021? We’re going to talk you through it.

A quick review of decentralized finance

DeFi is short for “Decentralized Finance“, a growing industry that aims to recreate the traditional financial system, but without middlemen and central oversight.

Everything you can do in a traditional financial system – lending and borrowing, buying and selling of securities, banking, insurance, exchanges, etc. – can now be done via a decentralized network.

While major blockchains like BTC are technically part of DeFi, networks that allow autonomous lending, like Ethereum, have been the driving force behind the DeFi movement.

A definition for DeFi cryptos

DeFi cryptos can more or less be divided into two categories:

  1. Platform cryptos – Cryptocurrencies used to govern and earn rewards on DeFi platforms. Often their prices are tied to the success of the project.
  2. Stablecoins Cryptocurrencies usually tied 1-1 to the USD in value. Many interest-earning functions in DeFi are powered by stablecoins.

With that DeFi crypto explanation out of the way, let’s get into some coins to know.

The top DeFi crypto: Ethereum (ETH)

If you’re looking for the best DeFi coin to invest in, without a doubt, the top bet for 2021 is Ethereum. Just like Bitcoin in 2020, Ethereum (ETH) also performed strongly, surging up more than 800%.

Why is Ethereum doing so well? Ethereum has been the preferred platform for many decentralized applications (dApps) such as Uniswap (UNI), Compound (COMP), Maker (MKR), and Aave (AAVE).

ETH is by far your best choice if you want to hold a coin with a lot of exposure to the market,

DeFi Crypto what is it These are the cryptos that are powering and are powered by DeFi platforms.
DeFi Crypto: what is it? These are the cryptos that are powering and are powered by DeFi platforms

The other top DeFi cryptos in 2021

There are a lot of defi cryptos out in the market. These are some of the top performers to look at in 2021.

Compound token (COMP)

Compound is an autonomous protocol running on Ethereum that allows borrowers to take out loans and lenders to provide loans by locking borrower crypto-assets into the blockchain as collateral. The interest rates paid and received by borrowers and lenders respectively are determined by the supply and demand of each crypto asset.

Why is the Compound Token (COMP) so popular? In addition to good publicity and being listed on top exchanges (such as Coinbase, OKEx, and Binance), Compound offers its users payments of its native COMP for lending and borrowing in the protocol.

Compound’s current market cap is at $715,123,315, with a volume of $197,441,808, and a circulating supply of about 4,422,422 COMP.

DAI stablecoin (DAI) and Maker coin (MKR)

DAI is a stablecoin (tied 1:1 with the USD) that is created when a loan is taken out on MakerDAO with crypto as collateral. Users can place down their cryptocurrency as collateral for a DAI loan, and take it back for the same price even if it has increased in value over time by returning the DAI (with a little interest).

DAI is probably the most popular stablecoin in DeFi right now. Its decentralization makes it difficult to manipulate by a person or company, unlike other, more centralized stablecoins.

The platform behind DAI, MakerDAO, has its own coin that has grown quite popular called Maker (MKR). Coin holders can influence the governance of DAI smart contracts and invest in the project by holding MKR.

Litecoin (LTC) 

An early Bitcoin sidechain, Litecoin (LTC) is a P2P cryptocurrency project released under the MIT/X11 license. It’s designed to make transactions faster and easier, encourage a greater volume of transactions, and improve on-chain stability and security. 

Litecoin is considered by many the third-largest cryptocurrency, and many experts consider it to be one of the five most important cryptos other than Bitcoin. As DeFi crypto becomes more readily accepted, it is believed that LTC might just be one of the few new standard currencies of the digital realm.

As of writing, Litecoin’s current market cap is at $10.5 billion, with a volume of $9.99 million, and a circulating supply of about 66.2 million LTC.

Synthetix (SNX)

In July 2020, Synthetix ranked seventh in terms of market capitalization.

Synthetix’s goal is to allow investors to speculate on the value of anything by tokenizing it on the blockchain.

The Synthetix ecosystem runs on Synthetix Network Tokens (SNX). SNX can be staked on the platform, used to collateralize new assets, and used for governance. In recent months, the SNX token has seen a surge, with its value shooting from $0.79 to $3.32 between June and July 2020. 

It is forecasted that 250 million more SNX tokens will be minted by 2025. The platform has remained protected from price swings so far through its high collateralization rate.

Synthetix’s current market cap is at $1.388 billion, with a volume of $342 million, and a circulating supply of about 110 million SNX. 

Yearn.Finance Coin (YFI)

Yearn.Finance is a decentralized finance (DeFi) platform that optimizes investment earnings by moving investor funds automatically between DeFi platforms such as dYdX, Aave, and Compound.

The Yearn.Finance coin (YFI) is currently the second most valuable crypto after BTC. It’s become highly prized because by holding YFI in its protocol you earn a percentage of fees generated by other users and voting rights

The Yearn.Finance Coin’s current market cap is at $719 million, with a volume of $465 million, and a circulating supply of about 29.9 thousand YFI with more planned to be minted in the future.

The best DeFi coins to invest in this year are almost all based on the Ethereum network
The best DeFi coins to invest in this year are almost all based on the Ethereum network

Other top decentralized finance coins for 2021

Of course, there are a lot of other good defi cryptocurrency options to invest in.

Here are a few other best DeFi coins to invest in this year, we’ve covered a lot of these cryptocurrencies in a previous article.:

How do I buy the best DeFi cryptos of 2021?

While you can get into new crypto easily on an exchange, this usually means you need to sell your cryptocurrencies to invest. That’s not a great solution if you think the price of your crypto will increase.

At MyConstant, you can get in on almost all the major DeFi cryptocurrencies without selling your coins

On our platform, we allow you to take out a loan against 75+ cryptocurrencies as collateral and transfer your loan directly into all of the coins listed above.

When you borrow with MyConstant we give you rates as low as 6% APR. You also can:

Got questions or want more information? Our 24/7 customer service team is on standby to answer any inquiries. Start doing more with your money at MyConstant today.

**Disclaimer: This article is for informational purposes only and should not be seen as financial advice. Make sure you do your own research before making any major financial decision.

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George Schooling

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Tags: decentralized finance coins defi crypto what is it defi crypto definition defi crypto explained best defi crypto 2021 best defi coin to invest top defi coins

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