The DeFi movement doesn’t seem to be running out of steam any time soon. As of writing, the total locked value (TVL) is still an impressive $60 billion. The strength and belief in DeFi by the public are not without reasons. The ability to operate at speeds faster than any traditional investment, require almost no commissions (only the transactional one) and give profits that outstrip everything has made DeFi and DeFi based tokens the choice of millions around the world.
However, not all that glitters is gold. With a sea of tokens that is swelling in size every day, there are hundreds of tokens that boom, attract investors and eventually fizzle out, which begs the question of whether DeFi tokens are worth buying. Yes, the number of tokens that generate wealth offset the loss bearing ones, but in the end, is profitability the only metric of a token’s success? Is market capitalization the only evaluation?
So what should make a DeFi token successful? A token for the sake of money isn’t the right one. Instead, the practicality of what it offers should be coupled too. With that in mind, here are the top five DeFi projects that offer actual real-world use:
Defi and CeFi are two different worlds with their own set of rules and workings. This means that coexistence and governance by a single system is a bit out of the question at the moment. Fortunately, EQIFI is a DeFi platform that has found the solution to connect the opposites. Backed by a fully licenced bank and powered by its native EQX token, it allows its users to gain all the benefits of DeFi and yet retain potential access to traditional banking and investment services such as fixed profit schemes and multi-currency accounts (both crypto and fiat).
Compound and its COMP token have one simple agenda: make it extremely feasible to take out loans. Using the power of smart contracts, people can lend out cryptocurrencies against digital assets. With no intermediary, the heavy commissions are removed and the benefits passed on to both parties in the shape of higher returns (for the lender) and lower interest (for the borrower).
Uniswap came into the limelight with its unique approach towards solving the infamous DEX liquidity problem through liquidity pools. The practical method not only offers ease in swapping crypto coins and tokens but allows people to earn passively by becoming liquidity providers. Its UNI token is though primarily a governance one, the rising value has made it a prime investment for people who want to benefit from the profitability.
The original trendsetter, MakerDao has been around since 2017 and hosts the first community-powered decentralized stablecoin, the DAI. A lending and borrowing platform, its MKR governance token is one of the strongest DeFi ones today. Its recent move to include physical assets such as real estate and cars as collateral is another fine example of a real-world case.
DeFi farming has been very attractive, it was a tough and tedious process for investors to keep a constant vigil on which platforms gave the highest yields. A better performing option meant liquidating assets and transferring to the other protocol, only to do that again if a better opportunity came by. yEarn solved this issue with its yield aggregator service, where users would only need to invest in its YFI token and the platform will automatically invest in the best DeFi protocols. At the same time, the YFI token can be staked for not only governance but get a share in the protocol transaction fee.