It has been nearly two years since the DeFi sector exploded, and during that time, it has been marked by rather consistent growth. Things did take a turn in November 2021, when the crypto industry saw the second harsh crash of the year. However, DeFi seemingly found stability in early 2022, and the money is slowly starting to flow back in, currently sitting at early August 2021 levels.
At the time of writing, DeFi TVL exceeds $77 billion, while its ATH before the crash was at $110 billion. This shows how much demand there is for DeFi protocols and different services that they offer, and since these levels were reached once, they will undoubtedly be reclaimed at some point in the future, as soon as the market trends allow it. In the meantime, we recommend investors use this time to look into different projects and seek out the ones with the greatest potential. We can even recommend our own favorites in the following top 7 DeFi tokens to watch in April 2022 list.
The first on the list is Kyber Network, which was developed to act as a hub of liquidity protocols. It aggregates liquidity from a number of different sources in order to provide instant transactions and high security on any decentralized application. Kyber Network’s main goal is to enable DeFi dApps, DEXes, and regular uses with easy access to liquidity pools.
Since liquidity has been one of the biggest flaws of DeFi protocols in the sector’s history, Kyber Network wishes to ensure that this will never again be the case, as good liquidity means that orders will be fulfilled faster, and as a result, more people will come to DeFi and abandon CeFi with its high fees, centralization, slow transactions, and other downsides.
The unique thing about Kyber — which is what sets it apart from the rest — is the fact that it is the first tool of this kind that allows anyone to instantly swap tokens without needing the assistance of some sort from third parties. Plus, the protocol also has a very unique, developer-friendly architecture that allows for easy integration of the protocol with apps and other blockchain products.
To learn more visit our Investing in Kyber Network guide.
Moving on, we have yearn.finance. This is an aggregator service for DeFi investors that uses automation to allow said investors to maximize profits when engaging in yield farming. The project has a fairly simple goal — it wishes to make it easier for investors to understand the DeFi space. Similarly to how the adoption of any product works, DeFi protocols and cryptocurrencies need to be simple enough so that even people who don’t have technical background can use them and understand what they are doing. Obviously, not everyone is a tech expert and some people are interested in casually approaching the crypto industry, rather than being professional traders and investors who need to know every aspect of the industry.
By simplifying DeFi investments and activities like yield farming, the project can help more people, and simultaneously attract more money to DeFi and its own TVL
To learn more visit our Investing in Yearn.Finance guide.
In the third spot, we have Aave — one of the largest DeFi protocols out there. Aave is a project that focuses on lending and borrowing, essentially providing a platform for users to lend their money, or borrow other users’ funds if they have need of it.
Aave has a number of unique selling points, and it has actually been around for even longer than the 2-year DeFi hype. Before DeFi went big, Aave was one of the protocols with the largest TVL. These days, it is still the third-largest DeFi protocol based on TVL, proving that the project is definitely deserving of dominating the sector.
Essentially, Aave allows users to lock up their funds in a lending pool and receive rewards in exchange for doing so. The funds can be borrowed by users needing a loan, and in order to borrow the funds, they have to provide collateral. The loan is eventually paid back, of course, with interest. This interest is the lender’s fee, and the amount they earn from offering their tokens.
Aave currently supports around 20 different cryptos, meaning that users are not limited to only locking up its native AAVE token if they wish to lock up their cryptos in exchange for earning some passive income.
To learn more visit our Investing in Aave guide.
Next, we have Uniswap, which has made quite a name for itself over the last 2 years. Uniswap is an Ethereum-based decentralized exchange, and also the largest DEX in the crypto industry. It facilitates automated trading of DeFi tokens, and it aims to serve anyone who holds one or more of the tokens it has listed on its platform.
Meanwhile, Uniswap continues to improve the efficiency of trading, attempting to make it better and more efficient than trading on traditional platforms. Furthermore, Uniswap also works as an automated market maker (AMM). By solving the liquidity issues that troubled DeFi, and DEXes, specifically, it created a more efficient solution that actually became capable of standing up to centralized platforms. Furthermore, Uniswap is also capable of offering trading with leverage.
To learn more visit our Investing in Uniswap guide.
In the fifth spot, we have Origin Protocol. This is a project that does not only focus on the DeFi sector, but also on NFTs. Essentially, its goal is to make it easy for everyone to be able to reach DeFi and NFTs at any time.
The protocol has its own flagship product, which has already supported many NFT drops, some of which were quite high-profile. Another major product that the project offers is Origin Dollar (OUSD), which is not its main coin — that would be Origin Protocol (OGN) — but instead it’s a stablecoin. Not only that, but it is the first stablecoin that allows users to earn a yield while holding it in their wallets, completely automatically.
It is certainly a project worth checking out, especially since it has seen massive growth starting in mid-March, which allowed it to make a massive amount of recovery and nearly reach the price it had at the start of 2022.
To learn more visit our Investing in Origin Protocol guide.
Nearing the end of the list, we have Polkastarter. This is a platform that was created to offer an easy-to-use launchpad for cross-chain token pools and auctions. Typically, it is used by new blockchain projects that are still in very early stages, and they need help in raising capital and distributing their tokens at the same time.
By using Polkastarter, blockchain projects can create new cross-chain swap pools with ease, and use them to raise funds in a safe and secure way. Meanwhile, users get to invest with no risks, since all swaps are executed automatically by smart contracts.
The project has a native cryptocurrency called POLS, which plays a number of roles in its ecosystem, such as being used for governance, liquidity mining, gaining access to POLS-holder-only pools, and paying transaction fees.
To learn more visit our Investing in Polkastarter guide.
Finally, we have selected Maple for our last suggestion. This is a decentralized corporate credit market that allows borrowers efficient and transparent financing that runs entirely on-chain. Maple offers a sustainable yield source to its liquidity providers who can lend to diversified pools. Meanwhile, it also has Pool Delegates, who manage the pools, perform due diligence, and ensure that the terms with borrowers are set in a way from which everyone can benefit the most.
The project features a native token called MPL, which allows token holders to participate in governance, stake insurance to Liquidity Pools, and share in fee revenues. Furthermore, users can access fixed-income yield opportunities simply by depositing funds into its Liquidity Pools. The pools are all managed by experienced investors.
The project also sees to the needs of Institutional Borrowers who require transparent and efficient financing on the blockchain. They can request capital on Maple, and even use their reputations to take under-collateralized loans. Pool Delegates help with agreeing to terms with Institutional Borrowers also, before funding loans from the Liquidity Pool that they manage.
To learn more visit our Investing in Maple guide.
With that, we conclude our list of the top 7 DeFi tokens to watch in April 2022. As you can see, the DeFi sector is not slowing down — in fact, it continues to attract more users, money, and projects. DeFi has great potential to improve the financial situation of all those who are not offered services by the banks which do not bother to go to places where there is no profit to be made for them.
DeFi, on the other hand, serves everyone equally, and with even a little bit of money set aside, it can be used to increase people’s wealth. It still has risks associated with other cryptocurrencies, such as high volatility and potential for hacking attacks, but it is arguably less risky than open trading.