The 15 Best DeFi Projects That Are Gaining Momentum in 2024

The decentralized finance space is growing as more people (and institutions) see the benefits of carrying out financial activities on chain, and as interest increases, the best DeFi projects have risen to fill the demand.

Now the question is, what are these projects? If you’re going to invest money into a project, it needs to be legit, profitable, and secure.

We explore the best DeFi crypto projects on the market right now. We highlight what these DeFi protocols do, why they are good investment decisions and the most prominent risk inherent in investing in them.

The Best DeFi Projects in 2024

The Top DeFi Projects Reviewed

What is a DeFi Project?

A DeFi project is any protocol, platform, or dapp that runs on a blockchain and allows people to carry out either DeFi loans, borrowing, liquidity provision, staking, or yield farming activities. The key differentiator between DeFi and regular finance projects is that all transactions in DeFi are carried out on a blockchain.

The main goal of DeFi projects is to provide a cheaper, faster, and more accessible way to carry out financial activities. Most DeFi projects are available to people across the world, do not require traditional bank accounts, and have low barriers to entries, thereby upholding the ethos of decentralization.

What Are the Different Types of DeFi Projects?

Money markets: These are lending markets that allow people to borrow and lend money at a percentage interest and return, respectively. Examples are Aave and Compound.
Yield aggregators: These are platforms that gather data from various liquidity pools, yield farms, etc, and display them in one place, allowing investors to pick the best. Some go further to offer vaults that run set strategies. A good example is 1Inch.
Decentralized exchanges: These are exchanges that let users easily swap between tokens. A good example is Uniswap.
Liquid staking derivatives: These protocols allow users to stake certain cryptos and obtain a derivative token that represents the stake which can be used in many DeFi project activities. A good example is Lido.
Stable swaps: This protocol runs specialized algorithms that govern stablecoin pools. They allow users to swap between stablecoins at a rate that is significantly cheaper than regular swaps. A good example is Curve.
Yield managers: These protocols allow users to manage the yield on yield-bearing cryptos like ETH. A good example is Pendle Finance.
Perpetual trading protocols: These protocols allow users to trade cryptos using leverage, thanks to financial contracts called perpetuals.
Derivatives: These protocols include synthetics that create tokens that track real-world traditional financial services securities like stocks and forex.
Automated market makers: These are algorithms that govern the balance of tokens in liquidity pools and facilitate swaps. All decentralized exchanges rely on an AMM. An example is Curve.
Cross-chain bridges: These protocols allow users to send tokens between different blockchain networks. A good example is Synapse.

Why is a DeFi Project a Great Investment Opportunity?

Potential returns: The best DeFi tokens can grow in value with usage and time.
Profitable investment strategies: The best DeFi projects themselves can also provide profit, eg, Lido provides a 4% staking reward on ETH while also providing LSDs which can be used in other DeFi projects to earn yield.
Growth potential: As DeFi projects gather users by offering access to financial services, they become more valuable.

Are There Any Potential Risks to DeFi Projects?

Bad tokenomics: Some projects print too many tokens which dilute their values in the DeFi industry, making them unattractive to hold for the long term.
Inflationary mechanics: When tokens emissions outpace DeFi coin demand, inflation sets in. This occurs regularly for projects that pay yields in their native tokens. Users tend to sell these tokens which creates perpetual sell pressure that often drives prices to zero over time.
Smart contracts risk:Even the best DeFi projects can be hacked (and have been) when attackers find a weakness in the smart contract code.

Are DeFi Projects Safe?

Many DeFi projects are only as safe as their smart contracts are secure, their tokenomics are solid, and their internal economics are sound. Meaning that a lot of the factors that pour into safety depend on how well developers build the protocols.

Well laid out projects have sound internal economics and mechanics where all participants give and receive value. Some projects go further to capture much of that value using their tokens for crypto investors, while some do not.

What Does the Future Hold for DeFi?

The future of DeFi remains largely unpredictable, however, there is a growing interest in crypto as a whole and this may spill into DeFi. While it is easy to speculate and be bullish, an interest in crypto may not translate into an interest in DeFi in its current form.

Major financial system institutions may like Bitcoin, but DeFi is a different ball game as it bypasses much of their services. DeFi grants retail users the power to be their own banks and asset management firms, which is not necessarily a great thing for banks.

As such, we’ve seen banks like JP Morgan develop blockchain-based systems for payment settlement on private permissioned blockchain networks. This trend may spill into the finance space where activities are carried out on bank-owned blockchain networks which will reduce costs and improve liquidity but will remain largely a central authority.

This does not mean that completely decentralized finance projects will become obsolete. The future may very well see the coexistence of both DeFi and a version of blockchain-powered CeFi.

How to Buy the Best DeFi Projects

You can buy the best DeFi projects on cryptocurrency exchanges. Our top pick is eToro, but you can use any that is secure and convenient. To get started:

1. Open an account

Go to the eToro website and create an account by clicking on the Start investing icon. You can download the mobile app from the Play Store/App Store and click on Sign up. Fill out the form with your full name, email address, and password.

2. Verify Your Account

Verify your account by setting up your profile and submitting KYC documents like a valid government ID and proof of residence documents like a utility bill.

3. Make a Deposit

Once your account has been verified, click on Deposit funds on the left pane of the page. Available payment options will be displayed. Choose a convenient method and set the amount you’d like to deposit.

4. Buy Crypto

Once your account is funded, search for any of the cryptos mentioned in the Discover tab. An interface like the one below should load. You can then set your parameters and buy.

Where to Buy the Best DeFi Projects

To get your hands on new cryptos from promising DeFi projects like Chancer, you may need to go directly to the crypto’s official website. You’ll need a crypto wallet like MetaMask. We created a guide to walk you through this process.

Step 1: Download a Wallet

Download MetaMask as an app on your phone or as a browser extension on your laptop and create a new wallet. Ensure you keep your seed phrase safe and offline.

Step 2: Buy Some Crypto

You’ll need BNB to buy new Chancer tokens. Buy some on an exchange like eToro and transfer to your wallet, or use a fiat onramp on the MetaMask web interface to buy with a credit card.

Step 3: Connect Wallet

Navigate to Chancer’s website and connect your wallet to join the presale. Buy CHANCER tokens using BNB. Ensure you have enough to pay for gas fees.

Step 4: Wait To Claim

You’ll need to wait until the presale is over to claim your tokens.

Latest DeFi Project News

Yield management platform, Pendle Finance, expands to the BSC chain in a move to bring yield strategies to more users.
Uniswap launches on the Avalanche network as the decentralised exchange moves to achieve a multichain presence.
Curve launches a stablecoin, crvUSD, backed by pools of wstETH, WBTC, ETH, and sfrxETH.

Final Thoughts on the Best DeFi Projects to Buy

We explored the best-decentralized finance projects and chose Chancer as the best option because of its growth potential within the DeFi ecosystem, its ability to disrupt a growing market in innovative ways, and the staking mechanism that rewards community members.

Nonetheless, all projects on our list are viable, although some more than others. For example, Radiant has a higher growth potential than Aave because it is newer, has better token utility, and possesses cross-chain capabilities while the latter’s token is mainly used for governance.

If you’re unfamiliar with the concept of cryptocurrency investments, read our how to invest in cryptocurrency page to get a handle on it.

Methodology - How We Picked the Best DeFi Projects

The DeFi crypto projects covered in this guide were chosen through rigorous research. We paid attention to reputation, price, market capitalization, and growth potential.

The tokens listed are the best we found for a crypto investment in the various categories we listed them.

Check out our why trust us and how we test pages for more information on our testing process.

FAQs

What Does DeFi Mean in Crypto?

DeFi is short for decentralised finance and includes all financial activities that are carried out on public, decentralised blockchain networks.

Can you Make a Living From DeFi?

While you can make a living from DeFi, it is ill advised. You’d need significant funds to begin with and run the risk of smart contract weaknesses and fluctuating yields.

Is DeFi Passive Income?

DeFi can be both active and passive income. There are services that offer preset strategies that are pretty plug-and-play.

How Risky is DeFi Investing?

DeFi investing is very risky. It is a high risk high reward industry, as is all of crypto. Several DeFi projects fail, especially those with unsustainably high yields.

Do you Pay Taxes on DeFi?

This depends on the laws in your jurisdiction. You should consult with a local legal practitioner for more accurate information.