Interested in investing in cryptocurrency? If you’re just getting started, it’s important to know that there are thousands of different cryptocurrencies available today. So, the first question to ask yourself is, which category of cryptocurrencies do you want to buy? For example, the market includes various categories of coins such as meme coins, NFT cryptocurrencies, coins associated with Artificial Intelligence, gaming, and more.
One highly promising category at the moment is DeFi tokens. Many believe that DeFi is a sector of the future, and numerous cryptocurrencies are competing to establish themselves in this space. In this article you will discover the best DeFi cryptos to buy this year and into 2024, and how to do it.
What is DeFi crypto?
Before delving deeper into DeFi coins, let’s talk about what DeFi is. DeFi is an acronym for Decentralized Finance. It can be defined as a set of applications that enable decentralized finance, meaning finance without intermediaries. Two key aspects to remember from this definition are “applications” and “decentralized.”
To automate its processes, DeFi uses applications. These applications are called dApps (Decentralized applications) and operate using smart contracts. Smart contracts are computer programs that allow the automatic execution of the application as soon as the conditions are met. With a decentralized model, DeFi advocates for solutions that are faster and more secure than those in traditional finance, as everything is automated.
Let’s consider a simple example involving a flight delay. In the traditional model, you would file a claim with the airline to receive a refund or compensation. With DeFi, you don’t need to go through these steps. Your ticket purchase and flight data are integrated into applications. If your flight is delayed and this delay entitles you to compensation according to the airline’s regulations, you will receive the corresponding amount automatically.
The last important feature of DeFi brings us back to cryptocurrency. To function in a decentralized manner, applications usually use a cryptocurrency or token. This is why we talk about DeFi cryptocurrencies (or tokens). Currently, it’s one of the most significant categories in the world of cryptocurrencies. While Ethereum is the leading cryptocurrency in the DeFi space, the sector consists of several hundred other cryptocurrencies and tokens. New projects continue to enter the market.
Why invest in DeFi crypto?
The DeFi space is highly attractive to investors for several reasons:
- Practical Application: Unlike many other cryptocurrencies whose utility may not be immediately obvious, DeFi provides a concrete application. It offers users more freedom and control over their financial activities. Users are no longer tied to the time-consuming and often frustrating processes of visiting banks or contacting customer service. DeFi puts users back in the driver’s seat, aligning with the growing desire for consumer freedom and empowerment.
- Disruptive Potential: DeFi represents a crypto application that serves significant needs and has immense disruptive potential. It aims to change many of our financial habits and redefine the relationship between “banks” and consumers. Investing in such a promising sector is therefore enticing. DeFi has a much stronger and more practical ambition compared to other crypto sectors, such as meme coins.
- Institutional Interest: While DeFi may still be in the shadow of traditional finance, this sector is rapidly maturing, and it can no longer be ignored. Even major banks are starting to develop DeFi products, recognizing that it represents the financial model of the future.
According to data from DeFiLlama, the DeFi crypto sector contains liquidity (Total Value Locked, TVL) equivalent to $47 billion. Looking closer at TVL figures, DeFi started gathering its first thousands of dollars towards the end of 2018. This means that it’s an extremely young and dynamic field, making it the best time to get involved. To get a better idea of DeFi’s potential, it’s worth noting that at the peak of the 2021 crypto bull run, its TVL reached $180 billion.
Which is The Best DeFi Crypto To Buy?
That isn’t an easy question as there are many promising DeFi crypto options available. Here we present a DeFi crypto list of some of the very best. It is a selection that emphasizes the ability to develop decentralized applications (DApps) on the corresponding blockchain. Further than that though, your chosen cryptocurrency should be able to interact with other ecosystems through various communication solutions like bridging or establishing parallel chains.
What is Ethereum (ETH)?
Ethereum is the world’s second-largest cryptocurrency by market capitalization. Along with Bitcoin, Ethereum dominates the market. However, unlike BTC, Ethereum focuses on the DeFi segment. The Ethereum blockchain enables the development of decentralized applications in various fields, including NFTs, banking (DeFi), gaming, and more.
Currently, Ethereum hosts the most applications among all blockchains. Last year, the blockchain implemented a significant update called “The Merge,” which reduced its energy consumption by 99%, a significant advantage in today’s context.
The price of Ethereum (ETH)
At the time of writing, the price of Ethereum (ETH) is €1,668. It has seen a strong recovery since the beginning of 2023, as its price was only €1,115 on January 1st. The all-time high price of Ethereum was reached on November 16, 2021, at €4,476.
Why buy Ethereum this year?
- Ethereum is the reference cryptocurrency for DeFi.
- It has a robust development community.
- The adoption of Proof of Stake (PoS) in 2022 to reduce energy consumption.
- The price is still affordable compared to its 2021 record.
What is Solana (SOL)?
The cryptocurrency Solana experienced significant growth in 2021 but faced some challenges in 2022 that caused a drop in its price. Nevertheless, the Solana blockchain remains among the top 10 in terms of market capitalization. Like Ethereum, Solana allows the deployment of smart contracts for decentralized applications. Its main strength lies in its high scalability, which means it can process a large number of transactions.
The price of Solana (SOL)
At the time of writing, the price of Solana (SOL) is around €30. This is a very low price, making it attractive. The all-time high price of Solana was €237 on November 6, 2021.
Why buy Solana this year?
- Solana is considered one of the major “Ethereum killers.”
- It offers high scalability.
- The price is very affordable compared to its 2021 record.
What is Cardano (ADA)?
Cardano competes with Ethereum and is also often referred to as an “Ethereum killer.” The Cardano cryptocurrency was launched by Charles Hoskinson, a highly influential figure in the cryptocurrency space. The Cardano network is built on robust technological foundations and has an ambitious roadmap. As of the time of writing this guide, Cardano is ranked 7th in terms of market capitalization, with a value of $11.5 billion.
The price of Cardano (ADA)
The price of Cardano (ADA) is approximately €0.3 at the time of writing. During the 2021 bull run, the price of ADA reached a record high of €2.84.
Why buy Cardano this year?
- Cardano is considered one of the major “Ethereum killers.”
- It has an ambitious roadmap.
- The price is very affordable.
- It has a strong community centered around Charles Hoskinson.
What is Avalanche (AVAX)?
Avalanche is another platform similar to Ethereum. What distinguishes it is its high scalability, which allows it to handle up to 4,500 transactions per second. Its architecture and consensus mechanism are designed to provide security and efficiency.
The price of Avalanche (AVAX)
At the time of writing, the price of Avalanche (AVAX) is around €9.23. The all-time high price of Avalanche was €80 on November 9, 2021.
Why buy Avalanche this year?
- Avalanche offers high scalability.
- The price is attractive compared to its 2021 record.
- Its community is growing fast.
What is Aptos (APT)?
Aptos is a layer 1 blockchain that enables the deployment of decentralized applications. Its programming language for smart contracts is called Move. Despite only emerging in 2022, this cryptocurrency is already considered one of the primary “Ethereum killers.” Its strength lies in its substantial scalability, estimated at around 150,000 transactions per second (TPS). A sign of its appeal, the crypto project has successfully raised significant funds in a challenging context.
The price of Aptos (APT)
At the time of writing, the price of the Aptos cryptocurrency stands at €5.77. The project’s market capitalization has already exceeded the billion-dollar mark, settling at around $1.4 billion and ranking 34th in the market.
Why invest in Aptos this year?
- Rapid development.
- Major investors supporting Aptos development.
- High scalability.
- Opportunity to invest in an emerging project with substantial potential.
What is Uniswap (UNI)?
Uniswap is a decentralized exchange (DEX) built on the Ethereum blockchain. It facilitates the exchange of various cryptocurrencies and tokens without the need for a centralized intermediary. Users can also provide liquidity to the platform and earn UNI tokens as rewards. Uniswap is a fundamental component of the DeFi ecosystem.
The price of Uniswap (UNI)
At the time of writing, the price of Uniswap (UNI) is around €4. Its all-time high price was €32 on May 3, 2021.
Why buy Uniswap in 2023?
- Uniswap is one of the most popular DeFi projects.
- It’s essential for decentralized cryptocurrency exchanges.
- The price is very affordable compared to its 2021 record.
What is Chainlink (LINK)?
Chainlink is not a blockchain, but a decentralized network designed to facilitate smart contracts on various blockchains, providing them with external data (e.g., real-time weather or stock market data). Chainlink operates on many blockchains and plays a critical role in the functioning of decentralized finance. Chainlink’s token, LINK, is a cryptocurrency used to pay for the services provided by Chainlink’s network of nodes.
The price of Chainlink (LINK)
At the time of writing, the price of Chainlink (LINK) is around €9.69. Chainlink’s all-time high price was €55 on May 9, 2021.
Why buy Chainlink this year?
- Chainlink is vital for the functioning of DeFi.
- It’s not affected by competition with other DeFi cryptocurrencies.
- The price is attractive compared to its 2021 record.
What is 1inch Network (1INCH)?
The 1inch Network platform was created in May 2019 by Sergej Kunz and Anton Bukov. This blockchain platform serves as a decentralized exchange (DEX) aggregator. To refresh your memory, a DEX is a decentralized exchange that allows you to buy, sell, and trade cryptocurrencies.
- Good quotes and low fees
- Does not hold your cryptos
- Use of limit orders on a DEX
In practical terms, 1inch Network scans all the DEXs in the market to find the best rates and trading pairs. 1inch Network can be thought of as a comparison tool designed for trading. The platform’s algorithm analyzes liquidity pools from around ten different blockchains, including Ethereum, BNB, Polygon, Avalanche, Arbitrum, Fantom, Klaytn, Aurora, Gnosis, and Optimistic.
The price of 1inch Network (1INCH)
The price of the 1INCH cryptocurrency is €0.25 at the time of writing this article. The project’s market capitalization is close to 300 million euros, positioning the crypto in the global top 100.
Why invest in 1inch Network this year?
- A platform that provides a practical service by comparing DEXs.
- A platform at the heart of DeFi.
- A very affordable price compared to its record high of €7.2 on May 8, 2021.
What is Ankr (ANKR)?
The Ankr project is relatively unknown, despite its launch in 2017. Nevertheless, its market capitalization of 220 million euros places the crypto on the cusp of the global top 100. The creators of Ankr are Chandler Song and Ryan Fang. While these names may not ring a bell, these two individuals were among Forbes’ top 30 under 30.
Ankr’s goal is to provide its users and clients with a range of web3 tools and services. In February 2023, the firm forged a partnership with the tech giant Microsoft. Through this collaboration, Microsoft will be able to offer node hosting services on its Azure platform.
The price of Ankr (ANKR)
The price of the ANKR cryptocurrency is €0.02 at the time of writing this article. Its record high price was recorded on March 28, 2021, at €0.20.
Why invest in Ankr this year?
- A highly promising project still relatively unknown
- Very affordable price
- A significant recent partnership with Microsoft
- A platform at the heart of the web3 and DeFi boom.
What is Aave (AAVE)?
The Aave platform was launched in London in 2017. It is a platform that offers various decentralized financial services. For example, on Aave, users can borrow cryptocurrencies or lend their cryptocurrencies to earn passive income.
The platform operates on several blockchains, including Ethereum, Optimism, Polygon, Avalanche, Fantom, Harmony, and more. The project has a market capitalization of 800 million euros, placing Aave in the global top 50.
The price of Aave (AAVE)
The price of AAVE is €71.90 at the time of writing this article. Its record high price was recorded on May 18, 2021, at €610.
Why invest in Aave in 2023?
- A platform at the heart of DeFi with a range of decentralized financial services
- A very affordable price
- A serious project with a substantial market capitalization
- A platform that operates on different blockchains.
Where to Buy DeFi Crypto?
To purchase a DeFi cryptocurrency, you’ll need to go through a cryptocurrency platform, whether it’s centralized (CEX) or decentralized (DEX). Exchanges come in many varieties on the market, but the key is to do your homework to ensure you choose a reliable and secure platform. Below, we offer information on three trusted exchanges where you can buy a DeFi cryptocurrency.
You can’t ignore Binance, the world’s largest cryptocurrency exchange. Binance was founded in 2017, and the platform provides access to a wide range of coins and tokens. You’re likely to find what you need to buy a DeFi cryptocurrency here.
- Low fees
- One of the largest crypto exchanges
- Fee discount for using native BNB
Crypto.com is another popular centralized exchange established in 2019. The platform offers a comprehensive suite of services. In addition to buying a DeFi cryptocurrency, Crypto.com allows you to stake your assets and even spend them using their cryptocurrency debit card.
- Free crypto card
- Reputable exchange
- Competitive fees
In contrast to the first two exchanges, Uniswap is a decentralized platform (DEX). As such, it may be a bit more complex to navigate. Nevertheless, it’s accessible to everyone. DEXs typically offer a broader catalog of cryptocurrencies compared to CEXs. With Uniswap, you’ll find over 900 coins and tokens to choose from!
- A top decentralized exchang
- Integrates the BNB Chain
- High liquidity
How to Buy DeFi Cryptocurrencies
If you’ve decided to invest in any of the DeFi cryptocurrencies listed above, here are some general steps on how to buy them:
- Choose a Cryptocurrency Exchange: Select a reputable cryptocurrency exchange that supports the DeFi cryptocurrency you want to purchase. Popular exchanges for this purpose include Binance, Coinbase, Kraken, and Bittrex.
- Create an Account: Sign up for an account on the chosen exchange. You’ll need to provide some personal information and complete identity verification procedures in compliance with Know Your Customer (KYC) regulations.
- Deposit Funds: Deposit funds into your exchange account. You can usually deposit funds via bank transfer, credit/debit card, or other payment methods supported by the exchange.
- Place an Order: After funding your account, place an order to buy the DeFi cryptocurrency of your choice. You can typically set a market order, limit order, or stop-limit order.
- Secure a Wallet: While your cryptocurrency can be stored on the exchange, it’s recommended to transfer it to a secure wallet for added security. For crypto, ‘DeFi wallet’ can mean hardware wallets, software wallets, and paper wallets, and all are popular options.
- Stay Informed: Keep up with news and developments in the DeFi space to make informed investment decisions. The cryptocurrency market is highly volatile, and prices can change quickly.
- Practice Risk Management: Only invest what you can afford to lose, and diversify your investments to spread risk. Set stop-loss orders if you’re concerned about potential losses.
- Consider Long-Term Holding: DeFi investments can be speculative, but holding some assets for the long term can be a strategy to ride out market fluctuations and potentially benefit from the growth of the sector.
Always exercise caution when investing in cryptocurrencies, conduct thorough research, and seek advice from financial experts if needed. Additionally, it’s crucial to stay updated on the regulatory environment in your region regarding cryptocurrency investments.
DeFi Crypto: A Conclusion
DeFi cryptocurrencies are a prominent category in the crypto market, with the potential to reshape the traditional finance sector. Ethereum remains a dominant player in this field, but it faces competition from various “Ethereum killers” like Solana, Cardano, and Avalanche. Chainlink, Binance Coin, Polygon, and Uniswap play critical roles in the DeFi ecosystem.
When investing in DeFi cryptocurrencies, do your research, consider the project’s fundamentals, and assess your own risk tolerance. Keep in mind that the cryptocurrency market is highly speculative and volatile, so it’s essential to make informed decisions and diversify your investments.