Whether you are interested in borrowing crypto or want to run DeFi trading bots on popular DEX platforms, the choices of tools that are laid out before you are numerous and diverse. It seems that just a decade ago we did not have the same variety of instruments that would provide us with sound financial advice, control portfolios better than humans, or simply help us stay afloat in the crumbling global economy.
Users of top DeFi exchanges have access to a massive collection of digital assets some with unique properties and utility. The use of smart contracts on blockchains like Ethereum allows all market participants to enjoy full automatization of their operations without worrying about security and errors in settlement. While technical issues like glitches and bugs persist, their number is dropping regularly and trusted systems gain popularity among individual retail investors and large established institutions.
With total value locked (TVL) over $100 billion across multiple platforms, it is easy to see why many financiers are interested in working in this growing industry. There are several ways that make decentralization so attractive to all investors:
- Entry barriers are lower. Financial services are either too expensive or complicated for many people to get started without prior consultation and some education. In theory, a DEX platform that has an intuitive interface and good UX design will be able to provide many financial services cheaper and in a more convenient manner.
- Many new forms of economic activity. Cash flows create growth. It is hugely important to allow for as many cash-flow channels as possible to exist in an economy that struggles with incentivizing activity in its numerous sectors. A variety of new institutions governed by engaged communities may produce the necessary additional flow of assets.
- Fairer environment for everyone. The democratization of finance is one of the core philosophies adopted by Bitcoin enthusiasts from the beginning of its existence. Studies suggest that up to 70% of the global population is unbanked which severely inhibits their ability to buy goods or pay for services that can be life-changing. We are already seeing how the biggest DeFi exchanges thrive and grow in areas where banking is unavailable or hard to access reliably.
Some believe that there are so many positives associated with this new growing sector that it is inevitable for them to grow into a much bigger ecosystem by the end of this decade. At the same time, the current saturation of the market is far from being an advantage. The relatively small target audience is spread thin across many platforms that offer what is essentially the same product. Picking potentially profitable coins from the list of the best DeFi platforms in 2024 is quite challenging even with our help!
Nevertheless, we want to give you a list of interesting decentralized services that may catch your attention and look like a solid investment target for retail traders. Remember that the vast majority of these platforms have their own native tokens that can be traded on the open market and can appreciate if everything goes according to plan.
The building blocks of the industry
A regular person may feel overwhelmed by the variety of choices in the crypto market packed with different types of digital assets and investment methods. One can focus on yield farming, lending their assets, trading for profit, market making, and many other forms of capital allocation in the industry. It is important to learn how to invest in decentralized finance at the moment when it is still taking shape instead of playing catchup later.
There are several types of products that define this particular sector of the industry:
- Top DeFi crypto exchanges or DEX platforms are the foundational blocks with projects like Uniswap, PancakeSwap, and SushiSwap helping market participants to move wealth around without any oversight from central authorities. In many cases, you will be able to quickly complete any operation thanks to so-called AMMs or automatic market makers. Unlike traditional institutions, the service is fully non-custodial meaning that all market participants hold their assets which moves the responsibility of managing money into the hands of users.
- Lending/borrowing protocols, as the name suggest, facilitate financing of investment operations. Names like Aave, MakerDAO, and Compound are familiar to any active retail trader. These three platforms manage over $30 billion and act as strong competitors to banks. In some regions of the world where banking is limited or unavailable, these services become crucial to local businesses. In theory, they also provide a much better and more accessible product and are often cited as the most user-friendly DeFi platforms in the industry.
- Stablecoins are critically important components of the growing crypto infrastructure that relies on coins backed by fiat money for quick exchange between tradfi and DeFi. Tether, USD coin, and DAI are all very popular among retail investors who want to actively participate in the market to make money here and now. The market cap of $USDT and $USDC is close to $150 billion indicating that people are more than just willing to use these tokens for all sorts of financial transactions within the cryptocurrency market.
- Yield and liquidity farming. Some investors want to enjoy good returns without exposing their capital to excess risks. One of the easiest ways to do so is by working with top DeFi platforms for yield farming like Yearn.Finance or Curve by providing liquidity. The former has been reporting impressive numbers. It claims that the platform manages over $5 billion in different digital assets. These services are invaluable to the blockchain industry as a whole as they provide the necessary resources and mediums to allow for higher economic activity.
- Insurance products are also available through projects like Nexus Mutual or InsurAce which deal with various risks in the industry and covering unforeseen events like technical issues with smart contracts and security breaches on exchanges. Note that it is impossible to prevent some of these issues from happening as robust safety measures are still being figured out. Working with reliable and secure DeFi exchanges in 2024 is obviously preferable, but finding platforms that are impenetrable is not as easy as it sounds.
Oter products that can elevate the quality of financial activities and make everyone happy are being released regularly, but only the best stick around in the long term. Since the blockchain industry is largely speculative in its nature, DEXes are services that usually survive easier than others. All newcomers to the market are constantly bombarded with ads for new DeFi exchanges in 2024. Selecting which one of them deserve your attention is a big challenge even if you have experience.
New DeFi exchange list
Despite reaching a point where saturation negatively affects the industry and its consumers, it is still producing new startups and interesting trading platforms that promise to make us believe in their vision after a couple of transactions. We strongly recommend waiting for these new brands to establish themselves and earn a good reputation before using their services.
Here are new, up-and-coming decentralized exchanges that may catch your attention:
- Encore is built on the foundation of Ethereum and claims to be a facilitator of fairer and more secure transactions between market participants on a large scale. It will be able to do by using the liquidity from established players like Uniswap or Quickswap. The idea is to connect all these independent services into a thriving ecosystem where operations are effortless and allow for the execution of any trading strategy regardless of target assets. The project is governed by a DAO and issues its native token $ENC which can also be staked for yield farming.
- OraiDEX is the brain child of the team behind Oraichain, a hugely successful AI startup that operates in the blockchain ecosystem. The platform aims at bringing together most useful components and practices from centralized and decentralized systems. On paper, it is a great way to make operations happen across the industry and far beyond. Whether it works practically is a different question the answer to which we will have only a couple of years from now. The developers promise users a workflow similar to what one can expect from a well-designed centralized platform, but without its weaknesses.
- StormGain also wants a piece of this sweet decentralized pie. The name is known to many crypto traders thanks to its CEX services offered internationally. The solution is built on the Ethereum architecture and will be handling operations with several hundred different tokens. The promise of the dev team is that you won’t have to pay any commissions and deductions do not happen even when funds are withdrawn. Another great perk is its full anonymity and the absence of KYC policies which make the concept of privacy advertised by the crypto community pointless.
These are fresh guys on the block. We do not know whether they will deliver on their promises and reach any form of relevancy in the future. However, it is a good idea to keep an eye on new players in the industry. $ENC is still a new token with a huge potential for growth. People who like to bet on up-and-coming projects may find Encore interesting. We have to remind you that it is not financial advice. A more reasonable strategy is to wait for the platform to mature and evaluate it based on past performance.
The best DeFi staking platforms in 2024
If you are interested in building a stream of passive income, staking sounds like fun. In many cases, you can use the necessary functionality of the target project to stake native tokens, but it is also possible, and more convenient, to use centralized platforms to manage your stakes on different chains. A newcomer will find it quite easy to get started if they do not have to learn a hole new skillset just to stake their tokens.
Picking the right place to become a stakeholder is not easy since there are dozens of centralized platforms offering services that seem and feel completely indistinguishable from each other. Nevertheless, some companies are better than others or offer such good deals that you simply cannot ignore them.
Note that we do not promote any of the projects below. Here are some places where staking is effortless and can be profitable:
- KuCoin is a great destination for users interested in staking a wide range of tokens. Currently, the platform supports over 40 different stakable assets and encourages customers to use the whole lineup of products associated with generating passive income. Depending on the target coin, you may earn from 1% to 16% annualized making it a better choice than many other asset classes. KuCoin is considered one of the biggest DeFi exchanges by volume and holds a significant market share.
- Binance is the largest CEX platform out there with a sizeable 17% market share and offices all around the world. Thanks to its continuous investment in proprietary technology, the company offers a rich variety of interesting products including ETH 2.0 staking with their new coin BETH. You can also work with other digital assets with some of the options including XRP and Chainlink. The Simple Earn product gives access to ADA, AVAX, and DOT. Returns vary between 0.05% and 6% depending on what you choose to invest in.
- Kraken focuses on direct, on-chain staking offering its clients access to 15 different tokens including Kava, Kusama, Algorand, Solana, Cosmos, and many others. If you want to start investing right away without any issues, this particular platform is an excellent choice. APY ranges from 1% to 15% while the system allows for flexible staking periods. The only issue for US customers is that the product is unavailable in the country.
- Bake is a centralized entity that offers its users access to a wide range of different products including joined staking with rewards paid out daily. It can be a good choice for newcomers seeking easier ways to enter the market and learning how to earn passive income on DeFi instead of spending a lot of time trying to figure out the quirks of the industry before investing. Bake’s APY numbers change all the time so the product requires a certain degree of attention and dedication from users.
- Nexo has an impressive lineup of products designed to take advantage of different staking opportunities in the market. Unlike many other similar solutions, Nexo has an interesting approach with its smart staking feature allowing users to use ETH and receive rewards in $NETH with daily payouts. At the time of writing, the platform offers a very attractive 12% APY with the minimum deposit being less than $10. If you wanted to stake your $ETH but felt intimidated by the size of the standard stake on the mainnet, Nexo may be the perfect solution.
Note that even the best DeFi platforms may never reach the numbers necessary for you to beat the inflation or other asset classes with staking. Remember that you are paid in tokens that are highly volatile. The price can go up and make you rich. At the same time, it is possible for the market to collapse leaving you with significant financial losses. Considering various risks associated with staking is hugely important if you plan to focus on this method of investing.
TOP DeFi exchanges in 2024
It is possible that the defining part of this ecosystem is what we call a DEX trading platform where users engage in self-custody of funds and can interact directly with buyers and sellers. While these services often do not have the same level of fidelity and workflow optimization like traditional brokers or centralized exchanges, they provide the much necessary competing products that many institutions have to respect.
The market is saturated with supply and we will definitely see some companies failing during the next decade with not a single new name to replace them. It is important for the industry to go through this difficult period to ensure that only the best DeFi crypto exchanges come out on top and make the whole ecosystem faster, more convenient, and cheaper for everyone.
While these platforms have many advantages, retail traders must also remember about downsides that inhibit the adoption of even the best decentralized exchanges. For example, you cannot really run traditional crypto trading software offered by automation vendors since trades often happen with delays or require peer-to-peer transfer of goods. Self-custody and interacting with users through smart contracts or P2P networks also come with great risks.
Despite the negatives, it is important to support DeFi protocols to ensure that centralized entities have strong competitors pushing them to make better products and focus on developing stronger safety and security measures. The interoperability and cross-chain trading are also crucial for the long-term survival of the industry. You may use them or simply buy their tokens to support their growth.
Here are some popular DeFi platforms in 2024:
- UniSwap is the best choice for people interested in working with Ethereum and ERC-20 tokens. Right now, the TVL is over $4 billion. The $UNI token has a$4.9 billion market cap at the time of writing and routinely reaches over $100 million in daily trading volume. UniSwap allows users to quickly trade tokens issued on the Ethereum blockchain. Since this particular network is considered the most important part of the whole decentralized ecosystem, investing in its tokens seems like a good idea.
- PancakeSwap works well for the Binance Smart Chain and allows users to work with a wide range of digital assets traded on the Binance platform and many other centralized exchanges. With the total value locked over $2 billion, it is one of the most popular DeFi trading platforms out there. If you are a fan of the BNB smart chain, PancakeSwap is a great destination for your capital. $CAKE has a sizeable $500 million market cap and good daily trading volumes.
- Curve is a great place for people who want to quickly swap stablecoins and work with a powerful market making service that offers its users a rich variety of investment opportunities. The main product of the project is the effortless swapping of ERC-20 tokens for USDT and other stablecoins. Since the release, Curve lost a lot of its initial value, but continues to be an interesting platform governed by the community. Right now, the price of $CRV s just over $0.29.
- 1inch has a questionable business model and architecture often criticized for the lack of unified vision. The long lineup of products offered by the platform feels overwhelming to newcomers and provides utility on different levels instead of trying to wrap everything in a single offering. Despite the challenges and valid criticisms, 1inch is a valuable player in the industry and offers a new way of approaching investment in the blockchain ecosystem. Low fees also make it an attractive destination for individual retail traders. At the time of writing, $1INCH has a $531 million market cap.
- SushiSwap is often described as the best place to go if you are interested in receiving rewards for liquidity provision. Despite having some useful utility, the $SUSHI token has been struggling to achieve success in the market losing over 70% of its initial value after a short-lived period of bullish movement. The price drop may seem like something negative, but the platform is stabilizing in the market while looking for its sure footing. If you are interested in platforms that offer ways to generate passive income while trading, SushiSwap is a good choice.
Note that top DeFi platforms often launch after a massive wave of hype making their market performances way less impressive than it is. Many tokens are destined to lose some of their value before the market finds the right price eventually. Buying these tokens without considering all potential risks is not a good idea. However, staying away from these promising digital assets due to fear and doubt is also suboptimal.
How to interact with digital assets from this sector
There are several ways to support the industry without directly working with decentralized platforms. Many retail traders do not need to swap their assets between chains and want to see the fruits of their labor right here and right now. It means that long-term solutions like locking capital in stakes for years or trying to participate in market making can be an unattractive proposition for many potential investors.
Here are some approaches you may take to work with the assets without directly using their respective platforms:
- Stake on centralized exchanges like Coinbase, KuCoin, Binance, Kraken, and others. It is a great way to benefit from yield farming opportunities without burdening yourself with technical knowledge and spending time and effort on learning how these solutions work. Instead, you can simply use CEX services as middlemen.
- Trade tokens on centralized trading platforms. It is possible to engage with the market in a “traditional” way by trading tokens on Binance or Coinbase. Since these businesses are centralized and have API, you can also set up a novel, powerful system like an AI crypto trading bot to work with $SUSHI, $UNI, $CAKE, or any other token without actually working on these platforms.
- Start trading on DEXes. This approach is not for everyone since it requires some technical knowhow and extreme caution. P2P transactions or using smart contracts for trustless operations can be quite rewarding if you know what you are doing. However, you must be aware of security risks, technological limitations, and other concerning aspects of self-custody.
- Simply use stablecoins. These assets are issued by fully decentralized networks while being pegged by fiat currencies like the US dollar, euro, or other national currencies. By using them when trading on any platform, you are effectively interacting with decentralized solutions. Holding capital in USDT or USDC can be a good choice if you are afraid of inflation and want to have easily swappable funds that can be removed from the traditional economy effortlessly.
If you are not afraid of investing directly in various platforms in the ecosystem, we highly suggest checking out yield farming programs, lending platforms, and other new-age financial services enabled by the blockchain technology. We are certain that many of these new exciting products will define how we interact with money tomorrow. Learning the basics of the technology early is a good idea for any forward-thinking individual.
The main takeaway
The crypto industry offers us an endless stream of investment opportunities that are often rivaling and surpassing offerings from traditional banks and financial institutions. If you are interested in making money or want to support an alternative, more democratic financial system, working with DeFi can be the best choice you can ever make. However, it is hugely important to consider various risks associated with exploring novel financial concepts.