DeFi protocols are the standards and procedures that govern financial transactions on decentralized financial applications. They are not controlled by single entities, governments, or central banks. Users are its backbone, as their funds, transactions, and investments keep the market afloat.

Protocols charge users fees for their services and possess more liquidity when they attract revenue. There are so many existing protocols, and it may be confusing to make a choice for investments. DeFi protocols offer a lot of services, which are permissionless and do not need intermediaries for transactions to be completed.

Top DeFi Protocols

DeFis, despite their autonomous nature, have evolved to become a popular borrowing and lending scheme, raking in millions of dollars as an investment. The following are top DeFi protocols according to market capitalization.

Compound

Compound is a DeFi protocol that runs on the Ethereum blockchain with a market capitalization of $21,280,038,207 with 19 tokens. It has been audited by several firms and has been in several wallets and exchanges. Compound allows users to earn interest in their funds, transfer, trade, and use their money on other crypto applications.

Curve

Curve is a decentralized finance protocol that allows users to swap multiple stablecoins with low fees. It has a market capitalization of $ 17,169,680,152 with 36 tokens. Investors can inject liquidity into Curve Pools to earn trading fees. There are two ways of depositing funds: normal deposits and stake-and-gauge, which can be unstacked whenever the investor wishes.

Marker DAO

MarkerDAO is a decentralized finance platform that runs on the blockchain network. It provides a cryptocurrency named Dai, a stablecoin powered by the Maker Protocol, attached to the US Dollar and backed up to locked-up crypto assets.

The Maker Protocol is controlled by a community of MKR token holders that vote on protocol management through the Maker decentralized autonomous organization, Marker DAO.

Uniswap v2

Uniswap v2 is the second version of the original Uniswap founded in 2018. Uniswap v2 is a decentralized finance protocol hosted on Ethereum that allows users to borrow ERC20 tokens without collateral. Users are expected to pay back on the same transaction. v2 signifies the second version of the protocol, and it offers more scalability, flash swaps, liquidity, and price accuracy. The protocol is governed by a group of UNI token holders that vote on protocol management through the Uniswap decentralized autonomous organization, Uniswap DAO.

Synthetix

Sythetix is a DeFi protocol that started out as a stable coin before it evolved to become a protocol. Users can create and trade synthetic assets, whose values are backed by SNX collateral. Synthetix’s native cryptocurrency is SNX and the protocol is managed by a group of SNX holders that vote on protocol management through the Synthetix DAO.

Bancor Network

Bancor Network is an ecosystem of decentralized, open-source DeFi protocols that foster on-chain trading and liquidity. It functions on Carbon, a decentralized protocol for automating on-chain trading strategies. Users can combine orders together to create automated strategies for buying and selling. Bancor Network is controlled by a community of BNT holders who vote on protocol management through the Bancor DAO.

Aave

Aave is a DeFi protocol and a crypto marketplace hosted on the Ethereum blockchain where users can borrow and lend funds without middlemen. It is governed by Aave token holders who vote on the protocol management through the Aave DAO. It has expanded to other blockchain networks like Polygon and Avalanche for cheaper alternatives.

Conclusion

It is important to note that the market capitalization of these protocols is unstable and subject to change. They may change based on the price of tokens, the rate of their demand, and their supply. There are many other DeFi platforms to be chosen to be chosen at users’ discretion. They are built as open-source projects, which allows for easy inspection, audition, and innovation.