HomeCrypto UpdatesBest 10 DeFi Platforms to Use in 2023

Best 10 DeFi Platforms to Use in 2023

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As we move into 2024, finance will be about decentralization. Decentralized Finance (DeFi) is one of the biggest and most exciting trends in the blockchain industry, with many believing it will overtake traditional finance in the coming years. This growing financial sector relies on the promise of robust, decentralized support networks that promote innovation (both financial and technical) that could fundamentally disrupt how we think of money exchange. At the forefront of this movement is the collection of DeFi platforms that support crypto and blockchain projects, facilitate transactions across blockchains, and serve as a trading hub of sorts for investors around the world. With that said, we must understand that DeFi platforms hold both peril and promise. In this guide, we’ll cover the top 10 DeFi platforms for 2024, looking at both the potential risks and rewards. Beyond TVL: How We Rank DeFi Platforms When our analysts assess DeFi platforms, they use criteria that articulate the “trust factor” of these platforms, such as year of launch, community following, and Total Value Locked (TVL) in supported protocols. Even though DeFi is a young industry, we’re looking for platforms that have stood the test of time (relatively speaking), typically with a large user base and significant value. Total value locked is like money “locked” in traditional mutual funds or CDs. This metric does matter, representing the sum of funds available to a DeFi platform, like a bank’s lending and borrowing capacity. But many DeFi projects quickly attract a lot of capital and then promptly flame out as users leave the service, rendering TVL a less-than-useful metric. This is slightly different from other analysts. Most DeFi rankings look exclusively at Total Value Locked, which can be misleading. The DeFi industry has nearly $44 billion locked in apps. So, TVL is just one part of the picture. We also look for longevity and the long-term ability to sustain a strong community of users — in the same way that we would look at a bank’s history and customer happiness, not just its size. Aave (AAVE) Aave, formerly known as ETHLend, is an Ethereum-powered, decentralized peer-to-peer marketplace for borrowing and lending digital assets. The peer-to-peer lending platform enables borrowers and lenders to agree on the loan terms executed using smart contracts. While Aave doesn’t have the largest TVL (Lido takes that award), it does have the greatest transaction volume and the longest history of any platform in our list, giving it the edge over other platforms. Year Launched: 2017 Blockchain: Ethereum Services: Borrowing and Lending Total Value Locked: $5,490,000,000 Community Following: 549,500 BMJ Score: 4.5 Check out BMJ’s Aave Investor Scorecard here. Lido (LDO) Lido was launched parallel to the Ethereum 2.0 Beacon Chain as a liquid staking solution for Ethereum and other PoS chains. The protocol offers non-custodial staking services, allowing users to stake their tokens without locking assets or maintaining staking infrastructure. Since Ethereum has switched to Proof-of-Stake Lido has exploded. It’s huge TVL lands it very near the top of our ratings. Year Launched: 2020 Blockchain: Ethereum Services: Liquid staking Total Value Locked: $16,360,000,000 Community Following: 269,000 BMJ Score: 4.0 Uniswap (UNI) Uniswap is a decentralized exchange on the Ethereum network that enables users to trade ERC20 tokens autonomously and swiftly. It does so through an algorithm that matches trades based on supply and demand in a liquidity pool, removing middlemen and intermediaries. Uniswap is one of the earliest DeFi platforms and has a huge user base, giving it a very strong showing in our ratings. Year Launched: 2018 Blockchain: Ethereum Services: Token Exchange/Lending Total Value Locked: $3,310,000,000 Community Following: 4,500,000 BMJ Score: 4.0 Check out BMJ’s Uniswap Investor Scorecard here and Risk scorecard here. Maker (MKR) The Ethereum-powered MakerDAO is a decentralized Collateralized Debt Position (CDP) platform that supports the stablecoin DAI, which aims to maintain its value one-to-one with the US dollar. Users can open a Collateralized Debt Position (CDP) by locking up ether (ETH) or other Ethereum assets as collateral to receive DAI as a debt against the locked-up assets. The platform uses the MKR token for interest payments, and the DAI and MKR paid are burned once the CPD is closed out. With its focus on borrowing and lending, along with a connection to DAI and a long history, Maker ranks very highly. Year Launched: 2018 Blockchain: Ethereum Services: Borrowing and Lending/Stablecoin Total Value Locked: $4,950,000,000 Community Following: 261,000 BMJ Score: 3.5 Check out BMJ’s Maker Investor Scorecard here. PancakeSwap (CAKE) PancakeSwap is a popular decentralized exchange providing token trading alongside features like staking and liquidity pools. The DEX is based on the BNB Chain, formerly the Binance Smart Chain. While PancakeSwap is relatively new, it has a huge following. Its prominent place in the Binance ecosystem makes it a good choice for Binance users. Year Launched: 2020 Blockchain: BNB Chain Services: Trading, Staking, Yield Farming Total Value Locked: $1,100,000,000 Community Following: 2,000,000 BMJ Score: 3.5 Check out BMJ’s PancakeSwap Investor Scorecard here. Curve Finance (CRV) Curve finance is a decentralized exchange protocol where users can swap and trade Ethereum-based assets. It also focuses on providing liquidity to the markets using a market-making algorithm that automatically buys and sells assets while profiting from the bid and ask price spreads, incentivizing users to add their funds to the overall pool and earn interest. Curve is another relatively new addition to the DeFi ecosystem. It’s large TVL helps lift it in our rankings. Year Launched: 2020 Blockchain: Ethereum Services: Borrowing and Lending/Decentralized Exchange Total Value Locked: $2,401,000,000 Community Following: 354,600 BMJ Score: 3.0 Check out BMJ’s Curve Investor Scorecard here. JustLend (JST) The first-ever official lending platform on TRON, JustLend enables users to borrow and lend their assets and earn interest on deposits. The overall supply and demand of TRON assets decide the interest rates on fund pools. While JustLend is focused on the Tron ecosystem, this hasn’t kept it from amassing nearly $6 billion in TVL. While the community following is small it is a great choice for anyone focused on the Tron ecosystem. Year Launched: 2020 Blockchain: TRON Services: Borrowing and Lending Total Value Locked: $5,795,000,000 Community Following: 58,600 BMJ Score: 3.0 Compound (COMP) Compound Finance is an Ethereum-based, open-source money market protocol that enables users to borrow or lend against collateral. Anyone can participate in Compound’s liquidity pool and start to earn interest on their digital asset holdings. The interest rates adjust according to the supply and demand on the platform. Compound supports DAI, ETH, and USDC, among other digital assets. Compound remains a popular choice for borrowing and lending, but is overshadowed by larger competitors Maker and Curve. Year Launched: 2018 Blockchain: Ethereum Services: Borrowing and Lending/Stablecoin Total Value Locked: $2,070,000,000 Community Following: 850,000 BMJ Score: 2.5 Check out BMJ’s Compound Investor Scorecard here and Risk scorecard here. Convex finance (CVX) Convex Finance is a DeFi protocol built on Curve finance. Convex protocol maximizes yields by streamlining the boosting experience. Curve LP (liquidity pool) providers can claim boosted CRV (Curve DAO Token) and earn trading fees without locking CRV. Users receive a token called cvxCRV when they deposit a certain amount of CRV tokens into Convex. Moreover, users can choose to stake cvxCRV tokens and receive CVX tokens as staking rewards along with a part of CRV rewards from Curve through Convex. Convex is a smaller service due to its ties with Curve. If you’re a frequent Curve user then Convex could be a good choice for you, but its niche status led us to rank it somewhat lower. Year Launched: 2019 Blockchain: Ethereum Services: Assets Total Value Locked: $1,710,000,000 Community Following: 54,800 BMJ Score: 1.5 InstaDApp (INST) Popularly known as the “DeFi Smart Layer,” InstaDApp is a DeFi app based on the Ethereum network. It is designed to provide a single, easy-to-use access point to interact with multiple DeFi protocols. Instead of using 2-3 separate apps for lending, borrowing, or staking across protocols, InstaDApp allows users to do everything in one place. While InstaDapp is a great service it hasn’t really caught on as users seem to prefer interacting directly with their lending, borrowing and staking apps rather than using a third-party service. Year Launched: 2019 Blockchain: Ethereum Services: DeFi Token, DeFi Smart Accounts Total Value Locked: $1,970,000,000 Community Following: 47,700 BMJ Score: 1.5 What Is Decentralized Finance? Decentralized finance (DeFi) refers to websites that offer “decentralized” financial…

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