Top DeFi Projects To Watch

Paul Hersztowski

Paul Hersztowski

Head of Studio

The last couple of years have been huge for decentralized (DeFi) projects, and it's only going to get bigger.

Why Is Now The Time For Decentralized Finance?

With the growing interest in smart contracts, crypto assets, and the wider benefits of decentralized exchange services, companies have already invested heavily into the future of decentralized finance. Many of the inclusions here have not only gone through numerous successful rounds of funding, but they've also grown a solid user base.

Ultimately, the future of decentralized finance belongs to users. Companies and services, like the best DeFi projects listed here, serve to enable users in that regard.

Now, we're reaching a point where DeFi is no longer a corner case niche; the average person is more educated in the use of wallets and private keys, as well as the wider benefits of decentralized currency.

Many even know how to gain interest, take advantage of gas fees, or otherwise benefit from developments in blockchain space. When they get want to look into the DeFi world even more, these are the projects and services that will likely answer that hunger.

Alpha Finance Lab - Cross-Chain Decentralized Finance

It's hard to talk about the best projects in the DeFi sector without talking about Alpha Finance, so we might as well start there. This company tackles one of the biggest concerns you can hear from critics of the DeFi ecosystem; that the numerous different digital assets, blockchains, and digital currencies lead to additional confusion and incompatibility issues.

This is something that traditional financial solutions can still hold over the crypto industry. While there are other fiat currencies, the ability to trade any currency for another makes it relatively user-friendly - as the typical user doesn't need to work about DeFi protocols between banks, for example.

Alpha Finance provides a cross-chain DeFi platform that supports numerous blockchains and decentralized applications.

This, in many ways, does one of the things that DeFi aims to do overall. Its goal is to let the typical user enter a decentralized, digital financial system without facing the aforementioned issues. It brings the benefits of the crypto asset, and the freedom from traditional finance and centralized exchanges, together.

While the company is well established, it's continuing to develop new projects that play into its decentralized exchange platform. Most recently, Alpha Homora is being developed to enable yield farming, access to liquidity providers, and more niche services above typical trading.

Like the rest of the company, this will hopefully enable users to choose the best liquidity provider in the DeFi space for their needs. Technology-wise, it's guided by the in-house ALPHA token, rather than third-party LP tokens, adding to its security.

Aave - Open Source Defi Projects

Since it started in 2017, Aave has continued to be a pillar in enabling decentralized apps. Previously ETHLend, Aave provides an open-source liquidity pool based on ethereum blockchain technology and DeFi tokens.

Aave's application, at a glance, allows users to trade over 20 different crypto assets within the DeFi ecosystem, including a wide range of stablecoins and other digital currencies.

While this area of crypto space is becoming more crowded, Aave continues to be worthy of note for its continued status as a market maker. First of all, the eponymous Aave protocol helps others earn interest and borrow assets in a decentralized way. What's more, because it's open-source, it's easy for businesses and customers alike interested in the likes of yield farming, liquidity pools, and even staking (thanks to its own DeFi coin, AAVE coin) in the crypto market. - Decentralized Finance Protection

As the world of decentralized finance becomes larger - both in terms of its user base and the amount of invested money brought over from fiat currencies and real-world assets via crypto assets - so too do other needs grow. Specifically, a decentralized insurance platform for providing additional protection when trading on decentralized exchanges is becoming a more sought-after option. is one of the leaders in this in this corner of the DeFi industry. Based on two popular blockchain networks - the Binance Smart Chain and the Ethereum network - it's one of the most promising projects of its type. It's already gained support and backing from companies in the financial world, including Defiance Capital and Huobi Labs, and such backing is enabling users and insurance providers alike to do more.

The platform allows users to gain projection on their DeFi products and investments, including centralized exchange risks and smart contract vulnerabilities, with plans to include more risks, including crypto wallet protection, in the future. As DeFi becomes a more serious proposition in both business and personal lives, companies like InsurAce may just fill the void as a decentralized autonomous organization for the kind of protection that's already commonplace in traditional financial solutions.

Terra Luna - International Decentralized Exchanges

Cross-border trading is one of the biggest areas DeFi projects are looking to improve. As we mentioned before, fiat currency has a high degree of stability and ease of access, but that comes at the cost of the increasing complexity and rigidity that a typical user may experience during international trade.

Terra Luna answers this need with its smart contract network, Terra. This, paired with its stablecoin digital currency, Luna, enables users to conduct transactions and trades across digital country borders with ease.

The DeFi project is worth keeping an eye on, to see how closely linked Terra and Luna remain. Will Luna continue to be required, or will the system become more open-ended, similar to the likes of Alpha Finance? Only time will tell, but Terra Luna's growing popularity has certainly proved the market demand for the decentralized protocol in this area of finance.

Polka Dot -Bringing Smart Contracts Together

The need for standardization across different blockchains, smart contracts, and DeFi protocols has been mentioned more than once already, and that's for good reason. When it comes to financial contracts, inoperability and the inability to access information from certain ledgers run a bigger risk for the respective ledgers being left out.

Polka Dot is a promising solution for this issue. It provides a "relay chain" that can transfer data and information securely from other platforms that need it. What's more, it has the potential to support multi-chain networks in areas where trust is quite low. In DeFi, this is an area where a non-custodial protocol is just the tip of the problem. Polka Dot becomes the neutral ground to ensure trust between trading pairs and their respective blockchain networks.

In time, solutions like Polka Dot may become an underlying asset for many future DeFi projects, and possibility a few inclusions on this list!

Uniswap - One Of The Best Decentralized Exchanges

It can be said that a decentralized exchange is only as good as the automated market maker underneath it. For DeFi transactions, Uniswap is one of the most promising. It enables users to exchange digital coins directly from their wallets for a minimal fee.

An automated market maker, as it implies, is automated. But unlike a traditional financial system, it draws DeFI coins from liquidity pools, rather than going through old-fashioned exchange processes. This is possible due to the verification process of peer-to-peer networks.

Uniswap stands out by its near-instant payments, a wide range of DeFi coins (including its own native UNI coin). Like Aave, its credibility is doing all of DeFi justice, as its gaining support and interest from both traditional and DeFi investment organizations alike.

Top DeFi Projects - What Can We Learn From These?

So, there you have it, our recommendations on the best DeFi solutions to keep an eye on both now and in the future.

  • The market is still very broad with no one central authorization. This, of course, means the focus still remains high on the decentralized autonomous organizations rather than one central authority across all of DeFi.
  • Specialization is on the rise, with numerous diverse solutions. Whether it's liquidity providers, yield farming positions, lending pools, market capitalization, or prediction markets, DeFi tokens are finding their way into many areas previously only inhabited by traditional financial institutions.
  • Yet the underlying technology still remains true to blockchain and peer-to-peer processing. This ultimately means that the minor details of a technical analysis aside, it's very possible to bridge the gap between different ledgers, platforms, and systems.
  • Stabilization, however, is key. Many solutions use their own native token or stablecoin to add extra stability on the currency side. This isn't a hard rule, but the use of DeFi coin with blockchain technology can alleviate many concerns over trading with synthetic assets.
  • DeFi, like the wider blockchain space, is becoming more user-friendly. Individuals can - and want to - use DeFi for instant payments, finding ideal lending rates or interest rates, and more. We expect this trend to only grow.

Ultimately, the future of DeFi is still open. We won't say anything on the market is perfect as-is, and improvement proposals are always welcome, judging by the rate at which such companies are adapting.

For those looking to invest or get to grips with DeFi personally, it's a great time to be alive. For businesses or those looking to build new solutions, the building blocks are all here: crypto assets, DeFi protocols, and smart contracts. Throw in an automatic market maker and any number of the above solutions and you might just be able to take on the financial world.

Easter egg ;)