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Best DeFi Projects to Invest

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Date: 2022-12-01 18:13:33

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Decentralized Finance (Defi) is a class of financial products such as protocols and apps which are built on blockchain. These financial products are governed by smart contracts.

Defi is a class that can potentially disrupt the financial industry because it can make it non-custodial and decentralized. Also, Defi coins are like a digital version of fiat coins because these can transfer value during financial transactions.

Defi can help investors to access new assets and have more control over their financial future. Therefore, the Defi category can experience huge growth in the future. Having said this, we are listing the 5 best Defi coins that you can add to your portfolio.

Note that the crypto market is suffering huge losses since 2021 (primarily after the covid break out) and almost all the major cryptocurrencies including the Defi coins are underperforming this time. The main reason for the same is the difference in the current macroeconomic factors as compared to the previous year. Macroeconomic factors such as fiscal policy, Inflation and employment levels, are not in the favour of the crypto market at the moment.

Therefore, it would not be fair to discuss current crypto growth for long-term investment because the macroeconomic and liquidity factors will not remain the same in the future. So, we have used the data before 2021 to study the past performances of the below-mentioned Defi coins. So, here is the list of best DeFi projects to invest in

Best DeFi Projects to Invest: Quant

Quant is a protocol that supports the mass adoption of DLT i.e., Distributed Ledger Technology. It provides the users with interoperability while developing tools for enterprise-grade applications.

The current market price of Quant, at the time of writing, is $120.24. QNT’s price increased from $2.06 to $43.17 from 2019 to 2021, indicating 20.95 times increase in its price during that period.

One of its notable competitors is Loopring, whose price changed from $0.05 to $0.46 during that period. It means that LRC’s price faced a hike of nearly 9.2 times which is far less than the 20.95x growth in QNT’s price, clearly indicating that Quant outperformed its competitor.

The use cases of QNT are:

  • QNT can be sued to get access to Overledger DLT Gateway of Quant which allows developers to develop multi-DLT applications.
  • Another major utility of QNT is to pay transaction fees, platform fees and annual license fees.

The above mentioned use cases and the Quant’s better performance over its competitor makes it worth investing in and one of the best defi coins to consider.

Best DeFi Projects to Invest: Uniswap

Uniswap is a growing network of Defi apps that consists of developers, traders, and liquidity providers collaborating in a financial marketplace that is open and accessible to all. Its Version 3 introduced important changes that made Uniswap much more efficient for liquidity providers and provided enhanced infrastructure and superior execution of trade orders (efficiency and effectiveness). Its current market price is $5.77.

Its price movement till 2021 states that Uniswap’s price has increased from $3.5 to $14.19, indicating 4.05 times increase in its price during that time. Note that there are roughly 4.5 million users on Uniswap till date.

Let’s also have a look at how Uniswap’s competitor has done so far this year. Its one of notable competitors is Sushiswap (SUSHI). SUSHI’s market price changed from $2.5 to $3.89 and hence, it increased by almost 1.55x during the specified period compared to 4.05x growth in UNI. Hence, Uniswap clearly outperformed its competitor.

Below mentioned are three major use cases of the UNI token:

  • UNI tokens provide the holder with voting power which can be used for the governance of the network.
  • UNI coins can be used to invest and speculate.
  • These coins can be used as an excellent alternative to slow and expensive international transfers.

Hence, UNI is another one of the best Defi projects to invest in this year.

Best DeFi Projects to Invest: Pancakeswap

Pancakeswap is the open-source DEX blockchain platform which is built on BSC (Binance Smart Chain). Users can trade BEP-20 tokens using the PancakeSwap platform without requiring any intermediator along with retaining privacy. There are around 2.8 million users on Panckeswap as of September 2021.

The current market price of Pancakeswap, at the time of writing, is $3.95. CAKE’s price increased from $1.4 to $3.16 from 2019 to 2021, indicating 2.25 times increase in its price during that period.

Let’s also consider Pancakeswap’s competitor’s price movements from 2019 to 2021. Its one of notable competitors is Sushiswap (SUSHI). SUSHI’s market price changed from $2.5 to $3.89 and hence, it increased by almost 1.55x during the specified period compared to 2.25x growth in CAKE. Hence, Pancakeswap clearly outperformed its competitor.

The following are the major use cases of CAKE:

  • CAKE holders can participate in the governance of the Pancakeswap network using the CAKE tokens.
  • CAKE coins provide the holder with voting power which is proportional to the number of tokens.

The use cases and Pankcaeswap’s outperformance over its competitor makes it one of the best defi coin to consider investing.

Avalanche

Avalanche states that it processes transactions blazingly fast, and is low-cost & Eco friendly. By using the Avalanche platform, one can develop Ethereum-based dApps. Its current market price is $5.77 and Avalanche has more than 4.5 million users across the world.

Avalanche’s price movement from 2019 to 2021 indicates that AVAX’s price has increased from $5.3 to $54.93, indicating 10.36 times increase in its price during that time.

AVAX’s one notable competitor is Polkadot, whose price increased from $2.9 to $10.95 during the 2019-2021 period. It indicates that DOT’s price increased by 3.77 times during that time in comparison to AVAX’s 10.36 times growth, clearly making Avalanche a winner here.

Using Avalanche, any user can launch a blockchain and set it to private or public. Avalanche has a safety threshold of 80% which is well above the industry standard of 51%. AVAX works on the Proof of Stake concept and its transactions can be finalized in under 2 seconds, as opposed to Polkadot’s 60 seconds and Bitcoin’s 60 mins.

Two main use cases of AVAX are:

  • AVAX is used as a currency to collect transaction fees and incentives within the network.
  • The token can be stalked to secure the Avalanche network.

Therefore, AVAX is one of the best Defi projects to invest and add to your portfolio.

Also read: Best altcoins to invest

Loopring

Loopring is a protocol which is designed to build decentralized cryptocurrency exchanges. LRC is the native token of Loopring and is an Ethereum-based cryptocurrency. Loopring aims to integrate the centralized order matching to the decentralized on-blockchain order settlement. In this way, it can bring the best aspects of both the exchanges (centralized and decentralized).

The current market price of Loopring, at the time of writing, is $0.247. LRC’s price increased from $0.05 to $0.46 from 2019 to 2021, indicating 9.2 times increase in its price during that period.

One of its notable competitors is Hermez Network, whose price changed from $2.4 to $4.9 during that period. It means that HEZ’s price faced a hike of nearly 2.04 times which is far less than the 9.2 times growth in LRC’s price, clearly indicating that Loopring outperformed its competitor.

Below mentioned are the two main use cases of the LRC token:

  • LRC token is used for the key operations on the protocol. In other words, people can only operate a decentralized exchange on the Loopring platform with the help of LRC tokens.
  • Another use of LRC is in the governance of the Loopring ecosystem, where LRC holders can participate in the beneficial actions of the platform.

Loopring’s outperformance to its competitor and its use cases makes it one of the best defi projects to invest in.

~Charu Taneja

Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Index or Individual Stocks. Please consult a registered investment advisor to guide you on your financial decisions. 

Original Source: https://crowdwisdom.live/crypto/best-defi-projects-to-invest/