Decentralised Finance (DeFi) has ultimately become an integral part of the cryptocurrency ecosystem. Riding on the success of 2021 where many DeFi cryptocurrency watered the dry accounts of its investors, more projects have now sprung up. Interestingly some of these emerging cryptocurrencies have been tipped to outperform the older generation before 2022 ends.
It doesn’t just end there. The total value locked of this ecosystem that was worth less than $1 billion in 2020 is not valued at almost $60 billion. So, what projects in this cryptocurrency space should you consider stacking up before 2022 ends? In this detailed article, we will highlight ten of the most promising ones in no particular order, and attach reasons why you can add them to your portfolio.
1. Convex Finance (CVX)
Few years back, this cryptocurrency was relatively unknown. However, with a stunning market cap of $370 million as of this writing, CVX has become a top choice for DeFi investors. But what exactly is Convex Finance and why should you consider owning some CVX tokens?
Convex Finance is simply a DeFi protocol that rewards another DeFi project, Curve Finance (CRV) with yields. So, as a CVX holder, you can earn interest from CRV while not owning a stake in the latter. If you seem confused about how this CVX protocol works, joining the BitAlpha AI community is one way to have a team of experienced investors break down the process. As per why you should consider investing, it is because CVX seems very undervalued at the moment. Investors who bought the cryptocurrency in early 2021 can testify to its incredible performance which made as much as 500% in pure profits.
2. Uniswap (UNI)
If you have not heard of Uniswap, it means that you were late to the crypto party. In 2021, the Uniswap team distributed airdrops to its holders to the tune of at least $1,000. During the same period, the coin went on to skyrocket over 200 %within one week. Built on the Ethereum blockchain, Uniswap has its own decentralised exchange in two separate versions while providing access to liquidity pools for investors.
In 2021, the UNI coin did three times its worth. With its current price largely below 2021 levels, UNI is one coin that can be considered currently undervalued.
3. Curve Finance (CRV)
With $6 billion locked in total value, CRV stands as one of the most promising DeFi tokens of 2022. Curve Finance is a one-of-a-kind project that allows users to exchange stablecoins on its network. In addition, Curve allows users to lock their CRV holding while allowing other users to make use of it with the providers getting rewards for lending their assets.
CRV investors who held from the beginning of 2021 till the end make more than a 7x ROI. While that may not be enough reason to buy, knowing that the protocol has sufficiently increased in community number provides another reason.
Aave is ranked third in the DeFi market considering its Total Value Locked is around $6.61 billion at the time of this writing. The open-source protocol which allows users to earn interest and borrow assets for a stipulated period also runs on the Ethereum blockchain. In 2021, AAVE invesotors made as much as 2.4x their investments.
With the proposal of its own stablecoin in the works, AAVE has the potential to become a highly profitable DeFi token before 2022 ends. Besides this, AAVE also offers numerous advantages— from no transaction fees to regular discounts, the AAVE protocol has proven to be a project “made for the people”.
5. Lido Finance (LDO)
Lido Finance is one of the top surprises in this list. In fact, its own extraordinary performance does not date back to 2021 as it has performed extraordinarily well since 2022 began. According to CoinMarketCap, LDO has gone from $0.56 to trade as high as $2.72 in less than three months in the same year. So, what exactly is the idea behind Lido Finance?
Lido Finance offers a liquid staking solution for Etheruem. The protocol also offers this solution at no minimum deposit as users are allowed to stake as low as possible via the chain. LDO boasts a market cap of $631billion with 312 million LDO tokens in circulation. With the performance of the LDO from the first to third quarter, there are high chances that the last quarter of 2022 will bring even more gains for its holders.
6. MakerDAO (MKR)
You can call this saving the best for last if you want. You probably have heard of MakerDAO, the DeFi protocol behind stablecoin, DAI. Like others, MRK allows users to lend and borrow cryptocurrency without any hassle. One solid reason why MKR may be a good buy is because of the stability of its stablecoin. After being pegged to the United States Dollar, there were conversations that DAI would struggle in the midst of USDT, USDC,and BUSD. Fortunately, that has not been that case as DAI has maintained its dollar-peg solidly. This is more reason it has more total value locked than any other DeFi protocol with its $8.51 billion worth.
MKR’s performance in 2021 gave a 3.5x return after it ended the year at $2,337. In 2022, the price went as low as $733. At the time of this writing, MKR was trading at $747.51. While this level might not seem impressive, it obviously offers a buying opportunity before the next bull market resumes. So, if you have been watching MKR, it may be time to activate the buy button.
Now that you know some of the best buys in DeFi, it is also important that you do not make the mistake of taking this article as investment advice. For clarity, these options have been provided as a result of the development activities and price history of the cryptocurrencies. While you can potentially make a positive return on investment, you can lose all too.
Finally, note that the DeFi ecosystem is an important part of blockchain technology, especially as it concerns the decentralisation mission. All of the projects mentioned above contribute to the objectives and not one is considered superior to another.