DeFi is a decentralized financial system that connects investors and borrowers without the need for a central bank. It eliminates the need for a middleman in all types of transactions and assures that the borrowing and lending process is transparent, scalable, and secure. DeFi is rebuilding many old tools from traditional finance inside the digital economy, as well as creating entirely new financial primitives. Many individuals believe the top DeFi coins to be a solid investment opportunity due to their popularity.
We look at the best 6 Polygon DeFi projects applications in this article, and while we think they’re solid investments, we are not offering any professional investing advice. You are solely responsible for your finances if you choose to invest in them.
What are the main uses of DeFi projects?
Asset management: This includes staking, buying, selling crypto, and loan for interest rate.
Asset tokenization: They assist companies in dematerializing assets in the form of legally compliant tokens that are digitally accessible to investors via a decentralized blockchain.
DAOs (decentralized autonomous organizations): They manage fundamental financial operations such as assets, fundraising, and governance implementation.
Decentralized exchanges: These exchanges reduce the possibility of market manipulation while also allowing for speedier settlement and lower exchange fees.
Insurance: It allows users to submit automated insurance claims that are transparent and secure.
Borrowing and lending amongst peers (P2P): They use autonomous interest-based protocols that allow two parties to borrow and lend assets for the purpose of earning interest.
Payment solutions: They eliminate central authorities to provide unbanked people with speedier, more efficient, and more transparent payment methods.
Savings: You can earn compound interest in real-time without making a long-term commitment if you choose a flexible savings plan.
Best Polygon DeFi projects
QuickSwap is an Automated Market Marker on the Polygon Network. It’s a copy of Uniswap, with a similar liquidity pool model. Users add pairs of tokens to liquidity pools and earn transaction fees from those that swap their tokens using the pools.
The Polygon Network’s QuickSwap has gained popularity owing to its speed and inexpensive fees. It’s also Ethereum-compatible, allowing you to swap ERC-20 tokens. However, there is always the possibility of temporary loss.
QUICK is an ERC-20 token that serves as the governance token for QuickSwap. Holders of QUICK can make proposals for new features or improvements to the platform and vote on them.
Aave is a non-custodial open-source protocol that allows users to earn interest on deposits as well as borrow cryptocurrency assets. It is built on the Ethereum network. It does, however, use a smart contract method to allow assets to be managed by a distributed network of computers that run its software.
Aave has two types of tokens: aTokens, which are issued to lenders in order for them to receive interest on deposits, and AAVE tokens, which are Aave’s native tokens. The AAVE cryptocurrency provides a number of benefits to its users; for example, borrowers who take out loans denominated in the token are not charged a fee, and those who utilize AAVE as collateral also receive a fee reduction.
Celsius X (CEL)
Celsius is primarily a decentralized financial infrastructure platform that focuses on crypto lending, borrowing, and earning. Its members are eligible for low-interest loans. Others who want to put their money to work might stake a deposit and get income if they guarantee not to withdraw the funds.
The CEL token is Celsius’s own loyalty incentive token. It also acts as the principal means of exchange on the network. CelPay is a one-of-a-kind function among cryptocurrency exchanges and loan platforms. It allows users to send crypto payments to friends and family with the same ease and speed that they can with more well-known platforms like PayPal.
Maker is a decentralized autonomous organization (DAO) based on Ethereum that allows anyone to lend and borrow cryptocurrency without having to go through a credit check. The network uses complex smart contracts and a stablecoin that is uniquely pegged.
The MakerDAO uses MKR crypto as its governance token to regulate the platform’s Dai stablecoin. Maker created the Dai stablecoin, which is tethered to the US dollar, as part of a bigger plan to solve the issue of volatility in crypto lending and borrowing. Maker has partnered with Digix, Request Network, CargoX, Swarm, and OmiseGO since its inception.
Yearn.Finance is a set of Ethereum-based protocols that allow users to maximize their earnings on crypto assets by using loan and trading services. Users earn YFI tokens by using the platform to lock cryptocurrencies in Yearn.Finance contracts running on the Balancer and Curve DeFi trading platforms.
In this way, Yearn.Finance capitalizes on a practice commonly called “yield farming,” in which users lock up crypto assets in a DeFi protocol in order to earn more cryptocurrency. The more assets users lock in a platform, the more tokens they are awarded by the protocols. YFI holders also regulate the protocol, which is maintained by a group of independent developers.
Beefy Finance is a multi-chain, decentralized yield optimizer tool that allows users to earn compound interest on their crypto holdings. It maximizes user rewards from the DeFi ecosystem’s various liquidity pools (LPs), automated market making (AMM) projects, and other yield farming options.
Its main product is the ‘Vaults,’ where you may store your crypto tokens. The investment strategy associated with the particular vault will automatically grow your deposited token amount by compounding random yield farm reward tokens back into your first invested asset. BIFI tokens are dividend-eligible revenue shares in Beefy Finance that allow holders to participate in Beefy Finance’s profits as well as vote on platform decisions.
DeFi platforms have enabled users to borrow, save, lend, and exchange cryptocurrency without the need for traditional financial market institutions. Polygon is currently best suited for DeFi projects because they benefit from the cheaper transaction costs and faster transaction times. In this article, we discussed top DeFi projects to invest in.