Defi, or decentralized finance, is one of the hottest trends in cryptocurrency right now. And for good reason – with Defi, you can earn interest on your crypto without having to entrust it to a centralized entity. That said, there are a ton of different Defi tokens out there, and it can be tough to know which ones are worth investing in. Here are 5 Defi tokens that we think have the potential to give you the biggest gains in 2022.
Maker is the token that powers the MakerDAO platform, which is one of the leading protocols in the Defi space. MKR holders can vote on governance decisions that affect the platform, and they also earn interest on their tokens (in the form of DAI, which we'll discuss next). MKR is a great choice for those looking for both high returns and an active role in governance.
Dai is a stablecoin that is pegged to the US dollar. It's important to have some stablecoins in your portfolio to balance out the volatility of other crypto assets. But what makes Dai special is that it's an ERC20 token on the Ethereum blockchain, which means it can be used in all sorts of different Defi protocols. That makes it a very versatile asset, and one that we expect will continue to rise in value as more and more people adopt Defi protocols.
Synthetix is a platform that allows users to trade synthetic assets, which are assets that derive their value from other assets (such as stocks, commodities, or even other cryptocurrencies). SNX holders can staking their tokens to earn interest, and they also get voting rights on platform governance decisions. Synthetix is a great choice for those looking for exposure to a wide variety of assets without having to actually own them.
Compound is a protocol that allows users to earn interest on their crypto by lending it out to borrowers. COMP tokens give holders voting rights on decisions affecting the protocol, and they also entitle holders to a portion of the fees earned by the protocol. Compound is a great choice for those who want exposure to both lending and borrowing activities in the Defi space.
Yearn.finance is a protocol that allows users to deposit their crypto into yield-bearing vaults and earn interest on their holdings without having to do any active management themselves. YFI tokens give holders voting rights on decisions affecting the protocol, and they also entitle holders to a portion of the fees earned by the protocol. Yearn.finance is a great choice for those who want exposure to passive income strategies in the Defi space.
There you have it – 5 Defi tokens that we think have big potential in 2022! As always, do your own research before investing in any cryptocurrency, and never invest more than you're willing to lose.
Your Friend,
Wade
