DeFi tokens are crypto tokens representing access to decentralised financial platforms and services. They operate on automated, blockchain-based platforms, offering a range of financial applications and services. They can be categorised into lending, exchanges, stablecoins, prediction markets, and insurance. Governance tokens enable user participation in platform decision-making.
Top 10 Best DeFi Tokens to Invest in 2024
| DeFi Tokens | Market Capitalisation |
| Avalanche (AVAX) | $17.5 Billion |
| Chainlink (LINK) | $10.4 Billion |
| Internet Computer (ICP) | $8.2 Billion |
| Uniswap (UNI) | $6.6 Billion |
| DAI (DAI) | $5.3 Billion |
| Stacks (STX) | $4.8 Billion |
| Maker (MKR) | $3.7 Billion |
| The Graph (GRT) | $3.2 Billion |
| Injective (INJ) | $3 Billion |
| Theta Network (THETA) | $2.5 Billion |
Avalanche (AVAX)
Avalanche is a layer-one blockchain designed to support decentralised applications and tailored blockchain networks. It rivals Ethereum as a preferred platform for smart contracts, aiming to surpass Ethereum’s popularity by offering a higher transaction throughput of up to 6,500 transactions per second without sacrificing scalability.
Avalanche’s unique architecture enables this enhanced performance. The network comprises three blockchains: X-Chain, C-Chain, and P-Chain, each serving a distinct purpose. This design diverges significantly from Bitcoin and Ethereum’s approach, which relies on all nodes validating all transactions. Furthermore, Avalanche blockchains utilise different consensus mechanisms tailored to their specific use cases.
Read more: What is Avalanche (AVAX)
Chainlink (LINK)
Chainlink, established in 2017, is a blockchain abstraction layer that facilitates the universal connection of smart contracts. By harnessing a decentralised Oracle network, Chainlink enables blockchains to securely engage with external data feeds, events, and payment methods. This capability is essential for complex smart contracts to incorporate the necessary off-chain information, thereby becoming the prevailing form of digital agreement.
The Chainlink Network is propelled by a vast open-source community, encompassing data providers, node operators, smart contract developers, researchers, security auditors, and more.
Internet Computer (ICP)
The Internet Computer blockchain introduces a groundbreaking redesign of blockchain architecture, harnessing innovations in cryptography. It presents the inaugural “World Computer” blockchain, capable of constructing various online systems or services, such as demanding web social media, without relying on traditional IT infrastructure like cloud computing services. Consequently, the Internet Computer blockchain facilitates complete end-to-end decentralisation.
Uniswap (UNI)
Uniswap is a widely recognised decentralised trading protocol, renowned for its role in promoting automated trading of decentralised finance (DeFi) tokens.
As an automated market maker (AMM), Uniswap made its debut in November 2018 but has experienced significant growth in popularity this year due to the DeFi trend and the ensuing surge in token trading.
Uniswap strives to maintain automated trading that remains entirely accessible to any token holder while enhancing trading efficiency compared to traditional exchanges.
By addressing liquidity challenges with automated solutions, Uniswap circumvents the issues that affected the initial decentralised exchanges, thereby increasing efficiency.
Read more: What is Uniswap (UNI)
DAI (DAI)
DAI, operating on the Ethereum blockchain, aims to maintain a stable value relative to the U.S. dollar through algorithmic mechanisms. Unlike centralised stablecoins, DAI is not supported by U.S. currency held in a bank account. Instead, it is backed by collateral within the MakerDAO platform, a decentralised autonomous organisation functioning on the Ethereum network. This setup enables individuals to engage in crypto lending and borrowing. In the event of an upgrade or closure of the Dai credit system, holders may be required to convert their DAI to Ethereum crypto via the Maker platform.
Stacks (STX)
Stacks operates as a Bitcoin Layer for smart contracts, enabling the integration of smart contracts and decentralised applications (dApps) with the Bitcoin network. This layer allows Bitcoin to serve as a digital asset and facilitates transaction settlements on the Bitcoin blockchain.
As the most valuable, sizable, and resilient decentralised asset, Bitcoin holds a market capitalisation of approximately $500 billion. The Stacks layer taps into this substantial resource by utilising the Bitcoin L1 as a settlement layer for decentralised applications, thus unlocking its potential.
Read more: What is Stacks (STX)
Maker (MKR)
Maker (MKR) is the governance token for the MakerDAO and Maker Protocol, both decentralised entities operating on the Ethereum blockchain. The primary function of MKR is to enable users to issue and manage the DAI stablecoin.
The Graph (GRT)
The Graph is a protocol for retrieving data from networks such as Ethereum and IPFS, underpinning numerous applications within the DeFi and broader Web3 ecosystem. Developers can construct and publish open APIs, referred to as subgraphs, which can be queried by applications using GraphQL to access blockchain data. A user-friendly hosted service is currently available, simplifying the process for developers to initiate projects on The Graph. The Graph currently supports data indexing from Ethereum, IPFS, and POA, with additional networks to be added soon.
Injective (INJ)
Injective offers robust core financial infrastructure components, including a fully decentralised, MEV-resistant on-chain order book. It supports various financial markets, such as spot, perpetual, futures, and options, all of which are integrated on-chain. The platform is compatible with Ethereum, IBC-enabled blockchains, and non-EVM chains like Solana through its decentralised cross-chain bridging infrastructure.
Furthermore, Injective features a cutting-edge, highly interoperable smart contract platform based on CosmWasm, equipped with advanced interchain capabilities. Built specifically with the Cosmos SDK, Injective operates using a Tendermint-based Proof-of-Stake consensus mechanism, ensuring instant transaction finality and maintaining high performance (10,000+ TPS).
Theta Network (THETA)
Theta is a Layer 1 blockchain and decentralised infrastructure designed for video, AI, and entertainment applications. Theta operates as a “dual network,” comprising two interconnected subsystems: the Theta Blockchain and the Theta Edge Network.
The Theta Blockchain provides payment, reward, staking, and smart contract functionalities, while the Edge Network handles computing, storage, and delivery of video streams, AI tasks, and other scientific, simulation, and financial modelling applications.
Should I Invest In DeFi Coins?
DeFi is a rapidly evolving and expanding sector. Each token comes with a different innovative set of solutions and utilities. Take the tokens explained here as an example. These tokens are not only used for finance but also in many other sectors like gaming, AI, and scientific sectors. This versatility makes DeFi more attractive to investors. We recommend you research each token and have a comprehensive understanding before making any investment decision. Kindly note that this blog is not an investment advice.
Read more: What Is The Future Of Decentralised Finance (DeFi)
Conclusion
In conclusion, DeFi tokens represent a rapidly growing and evolving sector within the crypto industry, offering a diverse range of financial applications and services. These tokens provide innovative solutions and utilities across various sectors, including finance, gaming, AI, and scientific applications. The mentioned tokens are looking forward to expanding in 2024. It will be interesting to watch their performance.
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