Decentralized finance (DeFi) is a financial ecosystem composed of decentralized applications (dApps) built on blockchain networks, most popularly, Ethereum.
It’s difficult to pinpoint precisely when DeFi was born, as there is not a universally agreed-upon date marking the birth of the DeFi sector. What could be stated is that DeFi was born over time thanks to different components of blockchain stacks and critical developments in the crypto industry that synergized to solve specific problems or innovate upon existing features/services.
DeFi runs on decentralized networks, primarily blockchain technology, which means no single entity controls the system. This differs from traditional finance, where centralized institutions oversee and manage financial transactions. Instead of a middleman, DeFi relies on smart contracts —self-executing digital contracts that are triggered if certain conditions are met.
Further, In DeFi, decentralized autonomous organizations (DAOs) are behind the development and sustainability of DeFi projects. Each DAO can implement a governance structure with its own rules and procedures, including voting mechanisms, vesting schedules, token delegation, protocol development, and more.
The following is an in-depth guide on the best DeFi projects not just on Ethereum but on other popular chains such as Solana, TRON, Base, and more.
Quick Navigation
The 14 Best DeFi Projects to Watch in 2024
Uniswap: Top Ethereum Decentralized Exchange
Aave: Largest Lending Platform on Ethereum
Lido: Leading Staking Protocol on Ethereum
EigenLayer: Top Ethereum Restaking Protocol
Ondo Finance: Largest RWA Protocol
PancakeSwap: Top Decentralized Exchange on BNB Chain
Jito: Top dApp on Solana Blockchain
MakerDAO: Creators of Largest Decentralized Stablecoin (DAI)
Raydium: Leading Decentralized Exchange on Solana
1inch: Veteran Ethereum DEX
Aerodrome: Top Lending Protocol on Base
Just Lend: Biggest Lending Protocol on TRON
Is DeFi Safe?
Is DeFi Suitable for Beginners?
What Problems Does DeFi Solve?
Does Bitcoin Have DeFi?
Closing Thoughts – the Best DeFi Projects
The 14 Best DeFi Projects To Watch in 2024
The following projects were selected based on their popularity and impact in the DeFi market. Without further ado, let’s see some of the best DeFi projects in 2024.
Uniswap: Top Ethereum Decentralized Exchange
Quick summary:
Leading decentralized exchange
Pioneered and popularized Automated Market Makers (AMMs)
A heavily-backed protocol with nearly $180M in funding
Uniswap (UNI) is one of the best DeFi projects in the industry, a decentralized exchange that has amassed billions of dollars in total value locked. It allows users to swap, earn,
It is fully open-source and provides resources and tools for founders to build on its ecosystem, including starting guides, protocol documentation, a Javascript SKD, and more. If that’s not enough, it also offers grant funding for projects with great potential.
The DEX is a household name in the DeFi industry. It popularized the use of AMMs to source liquidity through liquidity pools in contrast to traditional order books, which rely on buy and sell orders placed by market makers.
Uniswap introduced the constant product formula, which underpins its AMM model. In short, the formula states that a pool’s base liquidity needs to remain the same despite two or more tokens dropping or soaring in value.
Founders
Uniswap, originally called Unipeg, was founded by Hayden Adams, who was laid off from Siemens in July 2017.
Adams spent several months learning all about Ethereum, including its programming language, Solidity and JavaScript. In November 2018, Uniswap was launched, experiencing notable success in the market.
The protocol is at its third iteration, Uniswap V3, which introduces benefits such as concentrated liquidity, better risk management features for LPs, and fewer slippage events for arbitrage traders.
Investors and Backers
Uniswap has received $176M in funding from 17 investors, including high-profile institutions like Andreessen Horowitz (a16z), Polychain, Paradigm, and Union Square Ventures.
Aave: Largest Lending Platform on Ethereum
Quick summary:
The most popular platform for staking and lending stablecoin.
Has its own stablecoin called GHO, which is overcollateralized and backed by Aave assets.
Popularized the use of flash loans in DeFi
Aave (AAVE) is one of the most popular crypto lenders in the DeFi industry. It was once the largest DeFi app in 2021, with over $18B in total value locked. The protocol still holds well at $13B (July 2024), a 255% increase from its all-time low of 3.64.
Aave, formerly called ETHLend, was built on Ethereum and supports multiple chains, such as Polygon, BSC, Arbitrum, Avalanche, Harmony, and Fantom. This allows users to lend and borrow crypto in multiple ecosystems without intermediaries.
You can do other things in Aave, such as staking crypto and stablecoins like USDC or providing liquidity to the protocol’s liquidity pools (LPs). Further, you could become a member of the governance community and vote or submit proposals called Aave Request for Improvement (AIP).
Founders
Stani Kulechov, a Finnish entrepreneur and programmer, founded Aave in 2017. He holds a law degree from the University of Helsinki, but he started coding at 12 and became interested in blockchain technology later on.
Investors and Backers
Aave has raised nearly $50M from four investments. Notably, the Fantom Foundation is one of their biggest investors, pouring $10M into the protocol in May 2024.
Lido: Leading Staking Protocol on Ethereum
Quick summary:
Largest dApp on Ethereum and in the broader DeFi market.
Reached a peak of over $30B in TVL, one of the highest in DeFi history
Pioneered the liquid staking narrative
Lido (LDO) is the largest decentralized finance (DeFi) protocol, with a total value locked that has exceeded $30B in the past.
Lido pioneered the liquid staking narrative on Ethereum and the broader crypto market, becoming a success almost overnight.
The protocol allows you to stake Ethereum and receive a liquid token in exchange, known as stETH (Staked Ethereum). stETH can be used in other DeFi applications to earn additional yields while still receiving staking rewards and providing security to the Ethereum Beacon Chain.
It’s worth noting that Lido has invested over $4 million in security measures, including audits and bug bounties.
EigenLayer: Top Ethereum Restaking Protocol
Quick Summary:
An Ethereum-based heavyweight protocol, dominating much of the market with its restaking feature
Changed the game liquid staking game by introducing restaking, allowing users to maximize yields even further.
EigenLayer is one of the best DeFi projects in the Ethereum blockchain, a prominent protocol that introduced the concept of restaking, which involves depositing staked Ethereum (stETH) or liquid staked tokens (LSTs) into the protocol’s liquidity pools.
Restaking enhances pooled security by repurposing staked ETH, effectively allowing these staked tokens to be lent to other protocols. This process occurs through an opt-in mechanism on EigenLayer, where users agree to two key terms: 1) granting EigenLayer access to the staked ETH’s withdrawal credentials and 2) accepting the slashing conditions set by the validator. This setup encourages participation and, most importantly, promotes honest behavior.
EigenLayer then acts as the middleware, creating a free and open market where validators and protocols can trade pooled security for a price. Protocols have the option to purchase staked tokens or stETH, controlling the supply, allowing them to buy additional network security without the need to bootstrap it or invest in validator services.
Validators, in turn, can evaluate and select the protocols they consider safe and profitable to supply with staked tokens (they also have the ability to regulate the amount supplied to these protocols for security purposes). Ultimately, the process on EigenLayer is neither automated nor random but carefully managed.
Founders
EigenLayer was founded in early 2021 by Sreeram Kannan, a distinguished expert in engineering, computer science, and telecommunications. Kannan’s academic journey includes studies at the College of Engineering, Guindy, the Indian Institute of Science (IISc), and the University of Illinois Urbana-Champaign.
Kannan also served as a postdoctoral researcher at UC Berkeley and later became an associate professor at the University of Washington, where he led the UW Blockchain Lab.
Investors and Backers
EigenLayer has received over $164M in funding, according to data from Crunchbase. Their latest funding was raised on February 22, 2024, from a Series B round. Some of the protocol’s most prominent investors include Blockchain Capital, a16z, WAGMI Ventures, and Ambush Capital.
Founders
Lido was founded in 2020 by three renowned crypto and tech entrepreneurs:
Konstantin Lomashuk: A seasoned entrepreneur and blockchain expert, Lomashuk is also a co-founder of P2P Validator, a prominent staking service provider. He has been actively involved in the crypto space since 2012.
Vasiliy Shapovalov: A blockchain developer and researcher with significant experience in smart contract development and blockchain architecture. Before Lido, Shapovalov worked on various blockchain projects and contributed to developing decentralized systems.
Jordan Fish (also known by the pseudonym “Cobie”): A well-known figure in the cryptocurrency community, Fish has been involved in various crypto projects and is recognized for his insights into the DeFi ecosystem. He is also known for co-hosting the popular cryptocurrency podcast “UpOnly.”
Investors and Backers
According to Crunchbase, eight investors, including VCs Quiet Capital, Pareto Holdings, and NextView Ventures, have funded Lido in two private rounds.
Ondo Finance: Largest RWA Protocol
Quick summary:
Largest RWA protocol
Specializes in tokenized treasuries
Has expanded into multiple blockchain ecosystems and has opened offices in several continents.
Ondo Finance is dedicated to integrating real-world assets (RWAs), such as bonds and treasuries, onto the blockchain, mainly focusing on the Solana network. This initiative aims to enhance liquidity and efficiency for investors by tokenizing these assets, allowing for seamless trading on secondary markets without the usual delays and administrative hurdles.
Moving on, Ondo launched USDY, a tokenized note backed by short-term U.S. Treasuries with a 5.2% annual yield, on the Cosmos platform in June. The integration makes Ondo’s token offerings accessible across over 90 blockchains interconnected through Cosmos’ Inter-Blockchain Communication Protocol (IBC).
The protocol experienced substantial growth in early 2024, mostly due to the rising interest in tokenized assets, especially tokenized treasury bills, of which Ondo dominates the market share.
Ondo has also expanded to other continents, opening an office in the Asia Pacific region to meet demand for tokenized assets.
Founders
Ondo Finance was founded in 2021 by Nathan Allman, who previously worked with Goldman Sachs’ digital assets team. The team includes former executives from Goldman Sachs, McKinsey & Co., BlackRock, and Bridgewater.
Investors and Backers
Ondo Finance has raised approximately $34M in funding over three rounds. Wintermute Ventures and Pantera Capital are some of the lead investors.
It should be noted that Ondo Finance moved $95 million into BlackRock’s tokenized fund, BUIDL, enabling instant settlements for Ondo Finance’s OUSG tokens, backed by short-term government treasuries.
The protocol has also partnered with regulated and qualified custodians, including Ankura and StoneX.
PancakeSwap: Top Decentralized Exchange on BNB Chain
Quick summary:
Largest dApp on the Binance Smart Chain (BSC)
Offers some of the lowest fees in the market
Interoperable with Ethereum
PancakeSwap (CAKE) is a decentralized exchange (DEX) built on the Binance Smart Chain. The protocol is known for its low fees and user-friendly dashboard, making it a standout DEX on the Binance Smart Chain.
Like other DEXs, PancakeSwap allows users to trade cryptocurrencies directly without a central authority or the need for orderbooks, thanks to its use of Automated Market Maker (AMM). In short, AMMs are algorithms that aggregate liquidity from multiple sources without relying on makers or takers for liquidity provisioning.
PancakeSwap is popular for its vast liquidity pools, allowing traders to earn yields through staking. Additionally, it’s compatible with MetaMask and supports cross-chain transfers from BSC to Ethereum and vice versa.
PancakeSwap V4 brought many benefits, including support for native gas tokens, minimized slippage and impermanent loss, native ETH support, and more.
Founders
PancakeSwap was launched by an anonymous team of developers in September 2020. Nevertheless, the developers use pseudonyms and are usually active on social media. Despite their anonymity, the platform has garnered substantial trust and adoption within the DeFi community.
Investors and Backers
PancakeSwap has received over $4M in funding from at least three investors, including ICONIUM (during PancakeSwap’s ICO) and Platinum (Seed Round).
PancakeSwap is also backed by Binance Labs. The exchange’s venture capital and incubation arm invested an undisclosed amount in PancakeSwap’s utility and governance token, CAKE.
Jito: Top dApp on Solana Blockchain
Quick summary:
Largest dApp on the Solana blockchain
Solidified its presence in the market with a unique approach towards MEV and frontrunning
Ran one of the largest airdrops in crypto history
Jito (JTO) is one of the best DeFi projects on the Solana blockchain —widely recognized for its ease
of use and intuitive dashboard.
It’s a liquid staking platform similar to Ethereum’s Lido. However, Jito’s success comes largely from its innovative approach to handling MEV (Maximal Extractable Value), a frontrunner strategy in DeFi trading.
Jito addresses the MEV challenge by implementing an auction system in which traders bid on profitable transaction sequences optimized by third-party block engines. This approach boosts staker rewards and mitigates the benefits of spam transactions.
MEV will remain a debatable topic in crypto as one side argues that MEV miners exploit the system by front-running trades on DEXs or reordering transactions to maximize profits, leading to unfair advantages and a negative user experience.
Conversely, proponents assert that MEV can enhance market efficiency by identifying the best token prices across exchanges and resolving economic inefficiencies in DeFi protocols. For instance, MEV ensures lenders are repaid when borrowers fail to meet collateral requirements.
Founders
Jito was established by Jito Labs, with Lucas Bruder (CEO) and Zano Shermani (CTO) at the helm.
Bruder has a background in robotics and firmware, having worked at Ouster and Tesla. At the same time, Shermani previously served as a Software Engineer at Parsec and is an alumnus of George Mason University. Brian Smith, the COO, is also a significant contributor to the Jito Network.
Investors and Backers
In 2022, Jito Labs secured $12 million in a Series A funding round led by Multicoin Capital and Framework Ventures. Since then, Jito has become increasingly prominent within the Solana ecosystem, experiencing a substantial rise in total value locked in the first quarter of 2024.
Additionally, Jito conducted a major token airdrop on December 7, 2023, further solidifying its presence in the market.
MakerDAO: Creators of Largest Decentralized Stablecoin (DAI)
Quick summary:
An OG protocol in the Ethereum ecosystem, founded in 2014
Created DAI, one of the largest stablecoins by market capitalization
Established Maker RWA to invest in off-chain assets
MakerDAO is a decentralized autonomous organization (DAO) built on the Ethereum blockchain. It is best known for creating the Dai stablecoin and contributing to the rise of Real-World Assets (RWAs) in the Ethereum network.
Established in 2014, MakerDAO operates through smart contracts that allow users to borrow and lend crypto, specifically Dai (DAI), by using other assets as collateral. DAI is supported by almost every dApp in the industry and can be used for staking, lending, and as a utility and governance token.
MKR token holders handle governance, participating in decisions related to the protocol’s parameters and risk management.
Founders
Rune Christensen is the co-founder and CEO of MakerDAO. Prior, he co-founded a recruiting company in China and studied biochemistry at the University of Copenhagen.
Christensen became interested in stablecoins after discovering Bitcoin in 2011 and experiencing the Mt. Gox hack, which influenced his vision for creating a more stable financial solution through MakerDAO.
The other co-founder is Nikolai Mushegian, a well-respected figure in the crypto community known for his work in decentralized finance. He had a background in computer science and software engineering and contributed significantly to the project’s development until his passing in 2022.
Investors and Backers
MakerDAO has secured substantial investment from leading venture capital firms, including a16z and Polychain Capital. According to Crunchbase data, the protocol has secured nearly $80M in funding, with the latest round raised on December 1, 2021.
Raydium: Leading Decentralized Exchange on Solana
Quick summary:
The largest decentralized exchange on Solana by total value locked
It has integrated numerous features to make trading more smooth and faster in its platform
Raydium (RAY) is a prominent player in the decentralized exchange (DEX) space, often competing closely with Jupiter in terms of daily trading volume. It is recognized for its sleek, user-friendly interface, low transaction fees, and support for a wide range of cryptocurrencies.
The protocol has an user-friendly dashboard and allows anyone to create a liquidity pool for a token pair, promoting permissionless participation and enhancing liquidity within the ecosystem.
A standout feature of Raydium is its integration with OpenBook’s central limit order book, allowing Raydium users and liquidity pools to access the broader liquidity and order flow of the entire OpenBook ecosystem, and vice versa.
Founders
Raydium was founded by individuals who operate under pseudonyms. At the forefront is AlphaRay; heleads the protocol’s overall strategy, operations, product direction, and business development. He has a background in algorithmic trading in commodities, he transitioned to market-making and liquidity provision in the cryptocurrency space in 2017
Investors and Backers
While there is not any publicly available information about Raydium’s investors or backers, the protocol has made significant investments in the DeFi ecosystem. Its most recent investment was on June 9, 2022, when Orderly Network raised $20M.
1inch: Veteran Ethereum DEX
Quick summary:
One of the best DEX aggregators in the market, providing users with the prices for their trading orders.
Has received nearly $190M in funding
Backed by prominent investors, including Platinum Capital
1inch is a renowned DeFi protocol that acts as a DEX aggregator, helping users find the best prices and lowest fees for token swaps across different decentralized exchanges. It basically routes multiple liquidity sources, optimizing trades for efficient transaction execution.
At the heart of 1inch is its Aggregation Protocol, which enables cost-effective and secure swaps by pooling liquidity from multiple sources using Pathfinder, its algorithm that optimizes trading paths across different markets, considering gas fees for maximum efficiency.
Another element crucial for 1Inch functionality is the 1inch Liquidity Protocol, an advanced automated market maker (AMM) that enhances capital efficiency for liquidity providers while protecting users from front-running attacks. Users can earn annual percentage yields (APY) on staked assets and participate in liquidity mining programs to earn additional 1INCH tokens.
Founders
1inch was co-founded in May 2019 by Russian developers Serjez Kunz and Anton Bukov, both of whom have extensive experience in smart contract security and blockchain development. Kunz has around 13 years of experience in engineer and cybersecurity. Meanwhile, Bukov has been in software development since 2002.
Investors and Backers
1inch has secured over $189M in funding over six rounds, with the latest funding raised on June 1, 2022. Some of the protocol’s most prominent investors include Platinum Capital and Wave Digital Assets.
Aerodrome: Top Lending Protocol on Base
Quick summary:
The leading liquidity marketplace on Base
Backed by Coinbase Ventures
Aerodrome Finance is a DeFi protocol running as an automated market maker (AMM) and liquidity hub on the Base network, the Ethereum layer-2 built by Coinbase.
Officially launched on August 28, 2023, Aerodrome aims to facilitate efficient token swaps and attract liquidity within the Base ecosystem, incorporating advanced features from Velodrome V2, another DEX built on top of Optimism.
As a trader, you can swap tokens with minimal slippage and pay low fees to AERO lockers. Liquidity providers deposit trading tokens and receive AERO emissions as rewards.
It should be noted that Aerodrome employs a multi-token system in which AERO, an ERC-20 token, is used to pay fees, place trading orders, and interact with liquidity pools. Meanwhile, veAERO, an ERC-721, is a governance token obtained by locking AERO. This allows you to vote on emission distributions and receive trading fees and other incentives.
Founders
Alex Cutler is behind Aerodrome Finance. His background spans politics, technology, and consulting. Cutler is also a core team member at Velodrome Finance, a leading decentralized exchange on the Optimism network.
Investors and Backers
Aerodrome’s financing amount or latest valuation estimates have not been disclosed to the public. What it’s known is that Coinbase Venture made an undisclosed, strategic investment in Aerodrome’s native currency, AERO.
Just Lend: Biggest Lending Protocol on TRON
Quick summary:
The most popular lending protocol on TRON
Founded and backed by Justin Sun
JustLend is a DeFi protocol on the TRON blockchain, facilitating the lending and borrowing of digital assets without traditional financial intermediaries. It was created by Justin Sun to create pools based on the supply and demand for assets like TRX and TRC20 coins.
Users can lend cryptocurrencies to earn interest or borrow assets by providing collateral. Interest rates are algorithmically determined based on supply and demand for TRON-based assets. However, borrowers must provide collateral exceeding the loan amount to mitigate default risks. In other words, all loans must be over-collateralized.
Just Lend is part of the broader JUST ecosystem, which includes JustSwap, JustLink, and JustStable.
Founders
Just Lend was founded and is backed by Justin Sun, the creator of the TRON network.
Investors and Backers
There is little information regarding Just Lend’s investors, except for a small investment of £100,000 from multi-millionaire Steven Barlett.
Honorable Mentions
Below are some honorable mentions from other popular blockchain protocols.
Indigo Protocol
Indigo Protocol is a DeFi platform on the Cardano blockchain, enabling users to create and trade synthetic assets (iAssets). These synthetic assets provide exposure to real-world assets without requiring direct ownership, enhancing flexibility and accessibility in the DeFi space.
Indigo allows users to mint synthetic assets using smart contracts. These iAssets can be traded on various Automated Market Makers (AMMs) and used for yield farming.
The protocol features an Autonomous Oracle that updates the prices of real-world assets, ensuring that the synthetic versions remain aligned with their real counterparts.
Founders
Eric Coley and Dewayne Cameron are the founders of Indigo Protocol. They launched the platform in November 2022, reaching an all-time high of $125M in total value locked in March 2024. Coley is a blockchain and crypto entrepreneur with over 15 years of experience in the tech industry.
Cameron is Indigo’s CIO. He holds a Master’s in Finance from Durham University Business School.
Investors and Backers
There is no publicly available information regarding Indigo’s backers. However, Cardano’s founder, Charles Hoskinson, has recognized it as one of the fastest-growing protocols on the Cardano network.
Benqi
BENQI is a decentralized finance (DeFi) and Web3 protocol that offers various financial services, including lending, borrowing, and liquid staking.
The protocol provides a user-friendly and permissionless platform for various financial services, including lending, borrowing, and liquid staking.
As such, BENQI consists of three main components:
BENQI Markets: Users can lend, borrow, and earn interest on digital assets. This component offers a shared liquidity market where users can supply and withdraw liquidity, use their supplied assets as collateral, and view real-time interest rates based on market dynamics.
BENQI Liquid Staking: This service tokenizes staked AVAX, enabling users to use, swap, or collateralize the yield-bearing asset within other DeFi applications. It adds utility to staked assets by allowing the transfer of locked-up capital.
Ignite: Designed to bootstrap Avalanche validators and Subnets, Ignite makes it easier for institutions, individual developers, and Web3 natives to launch validators and blockchains with minimal capital.
Founders
Dan Mgbor is the founder of BENQI. He has a background in distributed ledger technologies and decentralized applications, managing projects and providing technology consulting at organizations such as Plan International UK, DXC Technology, and the Children’s Hospital of Wisconsin.
He holds a Master’s degree from the University of Southampton and a Bachelor’s from the University of Nottingham.
Investors and Backers
BENQI raised $6M in one private equity round in April 2021. Some of its investors include Arrington XRP Capital, Morningstar Ventures, Rarestone Capital, and The Spartan Group.
Is DeFi Safe?
DeFi is largely an unregulated industry. Let’s break down some of the key risks you should be aware of:
Smart Contract Vulnerabilities: Smart contracts are the backbone of DeFi, but if they’re not coded correctly, they can have weaknesses. Hackers can exploit these flaws to steal funds. To reduce this risk, many DeFi projects hire professional auditors to thoroughly review and test their code before making it public.
Flash Loan Attacks: Flash loans must be repaid within the same transaction. They can be used for legitimate purposes but also for scams; for instance, a malicious actor can manipulate token prices and drain liquidity pools, affecting those who provide liquidity.
Reentrancy Attacks: This type of attack happens when an attacker repeatedly calls a function in a contract before the initial execution is complete, draining funds in the process. It’s a common vulnerability that needs to be carefully guarded against.
Rug Pulls: This scam occurs when developers of a new token suddenly withdraw all funds from the liquidity pool, leaving investors with worthless tokens. It’s particularly common in DeFi because creating and promoting new tokens is relatively easy.
Regulatory Uncertainty: The legal landscape for DeFi is still developing. Regulatory actions, like the SEC’s case against LBRY, can significantly impact DeFi projects and their users.
User Error: Many DeFi losses happen because users don’t fully understand how the systems work. Education and caution are essential for anyone looking to participate in DeFi.
Is DeFi Suitable for Beginners?
DeFi emerged as the counterpart of traditional finance (which in the crypto industry is referred to as TradFi), building and innovating upon traditional financial mechanisms and services. That said, DeFi is not quite beginner-friendly.
In fact, DeFi is equally or more complicated than TradFi as you add the complexity of smart contracts, setting up and connecting cryptocurrency wallets, understanding blockchain technology, and more.
Despite being a multi-billion dollar industry, it’s a nascent, unregulated sector with many things to improve. There are risks of smart contract vulnerabilities, faulty programs, and hacks and phishing scams are rampant.
What Problems Does DeFi Solve?
Despite these risks, DeFi also offers significant potential benefits:
Accessibility: DeFi platforms are open to anyone with an internet connection, making financial services available globally without geographic restrictions.
Eliminating Intermediaries: By facilitating direct peer-to-peer transactions, DeFi removes the need for intermediaries like banks, potentially reducing costs and increasing efficiency.
Transparency: DeFi transactions are recorded on public blockchains, providing a high level of transparency and accountability compared to traditional finance, which can often be opaque.
Financial Freedom: Users have greater control over their assets, allowing them to negotiate lending and borrowing terms directly without relying on centralized institutions.
Innovation in Financial Products: DeFi enables the creation of new financial instruments and services, such as flash loans and yield farming, which aren’t possible in traditional finance.
Efficiency: DeFi transactions can be faster and more cost-effective than traditional financial services, especially for cross-border transactions.
Interoperability: Many DeFi protocols are designed to work together, creating a more integrated and flexible financial ecosystem.
Does Bitcoin Have DeFi?
Bitcoin did not inherently have a DeFi ecosystem, but integrating DeFi into Bitcoin was made possible through wrapped tokens such as Wrapped Bitcoin (wBTC).
Moreover, in recent years, Bitcoin layer-2s (L2) were designed and launched on top of the original Bitcoin blockchain to improve its scalability and throughput. These developments have incentivized the rise of different kinds of Bitcoin-native DeFi protocols, including platforms for lending, staking, and trading NFTs.
The rise of DeFi in Bitcoin is largely thanks to protocols like Ordinals, which enabled the creation of NFTs on the Bitcoin network by attaching data to individual satoshis. Similarly, the BRC-20 standard is an experiential fungible token designed for the BTC blockchain, built using the Ordinals protocol.
Closing Thoughts – The Best DeFi Projects
This article has covered some of the best DeFi projects in 2024. These projects come from different subsectors in DeFi, including RWAs, lending and borrowing, DEXs, and much more.
Further, we’re not sticking to Ethereum, as several dApps come from multiple blockchain networks, including Cardano, Avalanche, Solana, Base, and more.
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