The Hottest DeFi Tokens of 2022

Decentralized finance, the ability to use tokens in various ways to get the usual financial services – deposits, loans, and trading – without intermediaries, has undoubtedly proved its worth over the past couple of years. With hundreds of projects available and a market value of over $150 billion, DeFi looks like a serious contender for legacy financial systems. However, rapid growth and a wide range of choices are causing concern for many investors. The sheer number of tokens means it can be challenging to determine the most viable tokens. Here is a list of the most popular DeFi tokens to look out for in 2022. Read on to not miss a single thing!

What is DeFi?

In an increasingly digital financial world, DeFi focuses on providing the convenience of peer-to-peer transactions for investors. Using the efficiency and power of smart contracts — digital contracts that run on a blockchain — DeFi platforms create a space for lending, borrowing, trading, saving, and earning interest that doesn’t require all the usual bureaucracy and minutiae.

The goals of the DeFi network are very simple:

• Get rid of paperwork. No paperwork and no waiting at the bank to confirm transactions.
• Remove intermediary. Automating the contract process on the blockchain eliminates the need for human intervention.
• Doing business with DeFi is easy and fast.
• Equalize Opportunities. DeFi is closing the gap between the individual and the financial oligarchy.

At the beginning of 2019, the TVL of lending platforms (mainly MakerDAO) was $270 million. This momentum continued into 2020, to the point where Compound launched its governance token, COMP, which started the craze and initiated the first call for liquidity mining.

By December 2021, TVL DeFi has jumped over 1,000 times to reach $322.41 billion. You can see the Top 15 projects below.

EQIFi 

EQIFi is a project that intends to change the way DeFi and its users interact. Unlike many other well-established projects and platforms, EQIFi believes in simplicity. This extends to everything from its core services to an easy-to-use mobile app allowing people with little or no access to DeFi to join the best and start their journey into the world of crypto finance.

EQX, a native token, has a number of benefits. The automatic aggregator can offer up to 70% annual returns accrued daily. Instant loans – flash loans – have one of the lowest interest rates of 0.1% per year.

But what sets EQIFi apart is its seamless switching between the two financial systems. With a licensed bank behind them, EQIFi users can seamlessly buy and sell their digital assets, use traditional financial instruments, and even get a cryptocurrency credit card.

The EQX costs around $0.08, and with the services it offers, it’s at a stage where it can be purchased quite cheaply.

CHAINLINK (LINK) 

Many decentralized applications in the crypto space need oracles to interact with various kinds of data. And the current leader in oracles is Chainlink.

Chainlink offers a decentralized set of data through a range of oracles and smart contracts, providing a sweet spot between real data and blockchain applications.

Chainlink has grown exponentially since 2019, providing over 75 price channels for 300 smart contracts and decentralized applications.

It is important to note that Chainlink as a project has been designed and developed to the point where it provides grants to crypto initiatives deemed beneficial to the ecosystem.

In the DeFi space, Chainlink is making a significant impact by helping other projects power their functionality with oracles.

A few examples of famous projects using Chainlink oracles: Synthetic, AAVE, and KyberSwap.

Uniswap 

The simplest form of DeFi, Uniswap, is a decentralized crypto exchange that allows users to exchange their crypto assets without a centralized intermediary. While there are many centralized heavyweights such as Binance, Coinbase, and others, Uniswap has taken its place primarily due to its security and non-custodial nature.

The project’s native UNI token is considered one of the best DeFi tokens. The token is currently worth $10, and the token has seen tremendous growth since its launch.

Sushi Swap

At first glance, SushiSwap looks like just another AMM platform and Uniswap clone. Everything is more difficult. Similar to Uniswap and offering a decentralized exchange service that does not require intermediaries, SushiSwap takes it a step further and offers various DeFi services such as farming, staking, and lending – landing.

If you want to dabble in profitable DeFi services, you’ll need to get your hands on SUSHI, the platform’s token.

Terra 

Terra Network does not offer typical DeFi services but is a full Blockchain network that has several DeFi projects. In addition, Terra is a digital money network that uses algorithms to back various stablecoins. From the popular US dollar to the Japanese yen, it’s all here.

The extensive network of different projects offering DeFi services is the reason why the Terra LUNA coin has proven to be one of the most successful investments in recent years.

Polkadot 

Blockchain to unify all blockchains, Polkadot is an innovative project that uses parachains to allow anyone to create their own network. Since all parachains are connected to Polkadot, assets, and tokens can be transferred between different chains without any problems.

At the heart of the ecosystem is DOT, a token that serves multiple purposes, including staking, bonding (staking DOT to fuel the parachain), and even governance. Starting with less than $3 at the start of public trading, DOT has grown significantly, with its ATH hitting $54 in less than a year.

AVALANCHE (AVAX) 

Avalanche is an interoperable smart contract platform for running decentralized financial applications, financial assets, and other services. The platform supports the Ethereum virtual machine, as well as application-specific segmentation, network-level programmability, and NFTs.

Avalanche uses the Proof-of-Stake consensus protocol to offer a network where decentralized assets are traded and run by users with transaction confirmations in less than a second.

Initially, AVAX had a 1-year period for Seed Sale, Private Sale, and Public Sale tokens. But currently, tokens are issued at an annual rate of 7-12% as a staking reward.

And in order to balance the supply coming into the market, AVAX uses a burning mechanism that removes the commission paid on the network.