Decentralized finance (DeFi) is one of the hottest trends to emerge from the cryptocurrency markets. DeFi refers to financial services built on the blockchain, primarily the Ethereum network, that allow anyone to access financial products and services online in a decentralized and borderless manner.<\/p>\n\n\n\n
Today, DeFi users can borrow, lend, trade, invest, and make payments without the need for a financial institution as an intermediary. Instead, the role of financial institutions is replaced by decentralized smart contract protocols.<\/p>\n\n\n\n
Today, the total value locked in DeFi has more than doubled from January of this year, standing at over $42 billion.<\/p>\n\n\n\n
In this guide, we will list the best Ethereum-based DeFi protocols, ranked by the dollar value locked in each platform\u2019s smart contracts.<\/p>\n\n\n\n
We referenced data from DeFi analytics provider, DeFi Pulse,<\/em><\/a> to present our list of top DeFi applications.<\/p>\n\n\n\n Maker<\/a> is the most notable DeFi application on the market today. The platform has over $7 billion worth of tokens locked in Maker protocol smart contracts.<\/p>\n\n\n\n MakerDAO is a decentralized lending application on the Ethereum blockchain that supports Dai (DAI), a USD-pegged stablecoin. You can use Maker to drill into a vault, lock up collateral like ETH, and generate DAI as debt against that collateral.<\/p>\n\n\n\n DAI is the only stablecoin that you can use without any limitations. Unlike other dollar-backed stablecoins, it does not hold dollars in the bank. Instead, the Maker protocol relies on smart contracts and collateralized ETH to maintain price stability.<\/p>\n\n\n\n In addition, DAI holders can lock their DAI in Maker\u2019s Dai Savings Rate (DSR) contract and earn a variable share of Dai produced from security fees.<\/p>\n\n\n\n Check it out<\/strong>: 4 Best Cloud Mining Sites | The Most Profitable<\/a><\/p>\n\n\n\n Compound<\/a> Compound is a decentralized money market protocol built on the Ethereum blockchain that allows digital asset holders to borrow and lend cryptocurrencies against collateral. You can add assets to Compound\u2019s liquidity pool and start earning compound interest immediately. Interest rates automatically adjust in relation to supply and demand.<\/p>\n\n\n\n Compound reserves ten percent of the interest paid as reserves, with the remainder going to liquidity providers. The protocol has over $6 billion locked in its liquidity pools, making it one of the most popular DeFi platforms out there.<\/p>\n\n\n\n Ghost<\/a> is a decentralized, non-custodial liquidity market protocol where you can participate as a lender or a borrower. Lenders provide liquidity to the market to get passive income<\/a> , while borrowers can obtain both over-collateralized and under-collateralized loans.<\/p>\n\n\n\n Aave offers unsecured and collateral-free lending, where the loan and repayment must occur in the same transaction. The protocol\u2019s native governance token is LEND, but it can support 16 digital assets (13 of which can be collateralized).<\/p>\n\n\n\n Aave currently has over $5 billion locked up in its smart contract.<\/p>\n\n\n\n Uniswap<\/a> is a decentralized exchange protocol that allows users to swap between ETH and ERC20 tokens on-chain or earn fees by providing any amount of liquidity. Converting ERC20 tokens is done through a simple UI in a private, secure, and non-custodial manner.<\/p>\n\n\n\n Uniswap allows users to create markets (i.e. liquidity pools) that help improve the protocol\u2019s exchange liquidity. Each liquidity pair is denoted by a restricted and freely transferable ERC20 token.<\/p>\n\n\n\n Currently, $4 billion worth of Ethereum tokens are held in Uniswap liquidity pools.<\/p>\n\n\n\n SushiSwap<\/a> is a decentralized application that aims to incentivize a network of users by providing a platform where users can buy and sell digital assets<\/a> . Essentially, it is a transfer and paste of Uniswap, with some changes to Uniswap's open source code.<\/p>\n\n\n\n The platform allows you to create a liquidity pool for your own token by sourcing ETH and any ERC20 of your choice and swapping one token for another.<\/p>\n\n\n\n With over $4 billion locked in its trading pools, SushiSwap has emerged as a leading DeFi platform that allows you to trade digital assets without the need for any intermediaries.<\/p>\n\n\n\n O Curve Finance<\/a> is an Ethereum-based decentralized exchange liquidity pool tailored for efficient Stablecoin trading. The protocol enables low-slippage exchanges of stablecoins such as USDT, DAI, and USDC.<\/p>\n\n\n\n Tokens held by liquidity pools are also supplied to the Compound protocol and generate revenue for liquidity providers. There are currently seven Curve pools, including Compound, PAX, BUSD, Y, REN, sUSD, and sBTC, which support exchanges for a range of stablecoins and digital assets.<\/p>\n\n\n\n Curve Finance currently has $4 billion worth of digital assets locked in its liquidity pools.<\/p>\n\n\n\n Synthetix<\/a> is an Ethereum-based decentralized investment platform that allows users to produce and trade so-called 'Synths', which provide on-chain exposure to tokenized synthetic versions of physical assets.<\/p>\n\n\n\n Originally published as Havven, Synthetix allows users to invest ETH in synthetic assets that can be tokenized against dollars, gold, bitcoin, stocks, and more. Trading on the non-custodial platform happens on a peer-to-peer basis.<\/p>\n\n\n\n Synthetix has a native token called SNX. Users can obtain collateral such as SNX and ETH to mint Synths. Synths are essentially freely tradable ERC20 tokens.<\/p>\n\n\n\n Synthetix currently has around $2 billion in its liquidity pools.<\/p>\n\n\n\n Balancer<\/a> Balancer is another decentralized exchange (DEX) that allows you to buy tokens at the best possible prices and exchange them directly. Unlike other DEXes, where liquidity pools contain only two assets, Balancer\u2019s pools come with up to eight digital assets to improve liquidity.<\/p>\n\n\n\n Users can deposit liquidity and earn money from the pool\u2019s trading fees. Alternatively, they can trade via DEX to swap tokens.<\/p>\n\n\n\n As mentioned above, these are different design options for balancer pools. Private pools are for private purposes and should not tolerate external liquidity providers. The pool design is solely determined by the parent and can be customized as such.<\/p>\n\n\n\n On the other hand, shared or public pools are open to all interested parties, but are final and cannot be customized to your liking.<\/p>\n\n\n\n $1.7 billion worth of digital assets is currently sitting in Balancer\u2019s liquidity pools.<\/p>\n\n\n\n Banking<\/a> is a decentralized exchange (DEX) protocol that allows users to exchange digital assets instead of going through a centralized exchange.<\/p>\n\n\n\n The Ethereum-based application uses smart contracts to enable non-custodial trading of digital tokens. Bancor plans to create liquidity for digital assets through the use of what it calls \u2018Smart Tokens\u2019.<\/p>\n\n\n\n Bancor has a native token called Bancor Network Token (BNT), which serves as a Smart Token hub connecting other digital tokens in the Bancor ecosystem.<\/p>\n\n\n\n Over $1.5 billion worth of cryptoassets are currently locked in the Bancor Protocol.<\/p>\n\n\n\n Badger DAO<\/a> is a decentralized autonomous organization that aims to build infrastructure and products to bring bitcoin to DeFi. This means that users will be able to use bitcoin in DeFi to mint, lend, provide liquidity, flexibility, and more.<\/p>\n\n\n\n For example, users will deposit different types of tokenized bitcoins, such as WBTC, renBTC, and tBTC, into Badger\u2019s \u2018Sett Vault\u2019 to generate automated yield. Setts will automatically invest your tokens according to yield-generating strategies that optimize returns and reduce costs.<\/p>\n\n\n\n The native cryptocurrency governing Badger DAO is DIGG. At the time of writing, over $1.3 billion worth of assets are locked in the Badger smart contract.<\/p>\n\n\n\n InstaDapp<\/a> is a creditless smart wallet for decentralized finance. The application allows users to manage, optimize, and deploy their assets and receive the best returns across multiple protocols.<\/p>\n\n\n\n For new entrants to the DeFi space, InstaDapp has a user-friendly UI that allows users to manage their DeFi investments across protocols like Maker, Uniswap, and Compound.<\/p>\n\n\n\n Currently, over $1 billion is locked up in InstaDapp smart contracts.<\/p>\n\n\n\n Read Also<\/strong>: 5 Best Bitcoin and Altcoin Faucets |\u2192 Free Cryptocurrencies<\/a><\/p>\n\n\n\nMaker<\/h3>\n\n\n\n
Compound<\/h3>\n\n\n\n
Ghost<\/h3>\n\n\n\n
Uniswap<\/h3>\n\n\n\n
SushiSwap<\/h3>\n\n\n\n
Curve Finance<\/h3>\n\n\n\n
Synthetix<\/h3>\n\n\n\n
Balancer<\/h3>\n\n\n\n
Banking<\/h3>\n\n\n\n
Badger DAO<\/h3>\n\n\n\n
InstaDapp<\/h3>\n\n\n\n
Alpha Homorra<\/h3>\n\n\n\n