The crypto market is diverse and provides massive earning opportunities to traders across all the industries in it. Although most traders have familiarized themselves with the centralized market, the decentralized finance market brings a whole new twist. With peer to peer system becoming one of the go-to options, the DeFi market, as it is fondly called, provides clients with this opportunity. This is because traders can earn fortunes through different protocols in the sector carrying out activities like staking and the likes. In this article, we will be looking at the top 5 decentralized finance tokens to watch out for as we approach 2022.
What is Decentralized Finance (DeFi)?
With most traders relying on the digital market to make profits, the decentralized finance (DeFi) sector avails them with the tools to carry out their activities through a peer-to-peer system. By deploying smart contracts, traders are able to carry out their buying and selling activities on protocols. The main reason traders communicate with smart contracts is that the sector thrives without the need for a third party. Unlike a centralized exchange that uses a financial third party to facilitate transactions, traders do not need them when carrying out transactions on the blockchain.
Top 5 DeFi tokens to watch out for in 2022
With the world of decentralized finance (DeFi) getting bigger as the day rolls by, there are a bunch of tokens entering the space. However, traders who intend to make profits cannot just pick a token to trade that is why we have made this list of the top 5 tokens to watch out for.
#5 Aave (AAVE)
Launched in 2017, Aave was one of the first few platforms to make its way into the DeFi market. Aave works as a liquidity platform that allows traders to borrow assets and reward traders for lending assets. The decentralized protocols match lenders with borrowers in the market as it aims to provide equal space for traders. Traders who intend to make profits on the protocol can stake AAVE, the native token of the platform. Also, holders of its native token can have a say in the changes made on the platform. Presently, AAVE is trading at $233, seeing a loss of 1.20%. The token has a market cap of $3,120,434,867 with a 24 hours trading volume of $217,259,821.
#4 Avalanche (AVAX)
Launching its mainnet in 2020, Avalanche is a blockchain on Layer 1 where decentralized applications are built. Although Ethereum is by far the biggest and most used network in the DeFi sector, Avalanche is aiming for its spot. To do this, Avalanche intends to carry out up to 6,500 every second without any scalability issues. In actualizing this, the developers deployed three chains; X, P, and C chains. This approach is different from other blockchains because the three chains work together to validate transactions. To make profits from Avalanche, traders can stake their token, AVAX, which is used to ensure the platform is secure. AVAX is presently trading at $113, with a 24 hour gain of 4.90%. The coin has a market cap of $25,303,198,028 and a 24 hour trading volume of $1,256,780,409.
#3 Cardano (ADA)
Cardano was designed off the back of bringing global change through visionaries and innovators. Developed in 2017, the network is a proof of stake blockchain that intends to provide an ecosystem that is secure, fair, and open. Its native token, ADA, allows holders who hold it to decide changes on the ecosystem. With this, they can vote on any change that is proposed on the platform. Cardano is presently trading at $1.5, seeing a 1.01% fall in the past 24 hours. It has a trading volume of $1,607,851,868 and a market cap of $51,689,872,204.
#2 Chainlink (LINK)
Chainlink is a decentralized oracle system that bridges smart contracts with live data using its oracle technology. The platform recently deployed a bridge that will help different DeFi blockchains have better communication. With this, various projects will increase their scalability and avoid issues that earlier blockchains have suffered. Chainlink is having an enjoyable period in the market, having gone up by 2.20% in the last 24 hours to trade at $24. Ranked #20 on CoinMarketCap, the token has a market cap of $11,613,396,477 and a 24 hours trading volume of $792,297,831.
#1 Polkadot (DOT)
Polkadot helps different blockchains share information using a trustless system brought about by its Polkadot relay chain. With this, projects built on the chain enjoy a faster speed coupled with massive scalability. Polkadot has been seen as a big rival for Ethereum in the DeFi, as it had always battled with issues regarding speed and congestion. With more projects hoping on the chain, it continues to enjoy massive growth and adoption. DOT is presently ranked #9 on CoinMarketCap, trading up at 6.31% with a price of $37.17. Its market cap is $36,652,959,436 with its trading volume about $1,278,588,734 in the last 24 hours.
The decentralized finance (DeFi) sector is currently undergoing one of the best times in the market. With this, more traders and entities are flocking into the sector, trying to leverage it for profits. With funds raised in the sector, a massive amount of financial products have debuted in the sector through different protocols. The tokens above show massive potential and are primed to push further upward with great adoption. However, you should know that things change drastically in the DeFi sector, and you need great research. The research will tell you what the next step is about any token that you intend to trade.
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