As the world of cryptocurrency continues to expand and evolve, more and more investors are looking towards decentralized finance (DeFi) as the next big thing in the industry. DeFi, which aims to eliminate the need for traditional financial intermediaries by using blockchain technology, has been gaining traction in recent years as a way to democratize finance and give users more control over their assets.
With the rise of DeFi platforms and applications, a number of cryptocurrencies have emerged as potential game-changers in the industry. Here are the top 5 crypto coins to watch in 2021:
1. Ethereum (ETH)
Ethereum is widely considered to be the backbone of the DeFi movement, with its smart contract functionality allowing developers to build decentralized applications (dApps) on its network. As the second-largest cryptocurrency by market capitalization, Ethereum has already made significant strides in the DeFi space, with platforms like Uniswap and Compound leveraging its blockchain for their operations.
In 2021, Ethereum is set to undergo a major upgrade known as Ethereum 2.0, which aims to improve the scalability and security of the network. This upgrade could potentially make Ethereum even more attractive for DeFi applications, driving up its value and utility in the ecosystem.
2. Chainlink (LINK)
Chainlink is a decentralized oracle network that aims to connect smart contracts with real-world data. By providing a secure and reliable way for blockchains to access external information, Chainlink has become a crucial component of many DeFi applications that require accurate and timely data feeds.
In 2020, Chainlink experienced a massive surge in value as the demand for its oracle services soared. In 2021, Chainlink is expected to continue its upward trajectory, with more DeFi projects integrating its technology to enhance their functionality and security.
3. Aave (AAVE)
Aave is a decentralized lending protocol that allows users to borrow and lend cryptocurrencies without the need for traditional intermediaries. By using smart contracts to facilitate peer-to-peer lending, Aave offers users a more efficient and cost-effective way to access liquidity in the DeFi space.
In 2020, Aave emerged as one of the top DeFi platforms in terms of total value locked, demonstrating the growing demand for decentralized lending solutions. In 2021, Aave is poised to build on its success and expand its market share, as more users look towards DeFi for their borrowing and lending needs.
4. Synthetix (SNX)
Synthetix is a decentralized platform that allows users to create and trade synthetic assets that are pegged to the value of real-world assets like commodities, currencies, and cryptocurrencies. By using its native token, SNX, as collateral, users can mint synthetic assets and earn fees by providing liquidity to the platform.
In 2020, Synthetix gained popularity for its innovative approach to asset tokenization, attracting users who wanted exposure to a wider range of assets in the DeFi space. In 2021, Synthetix is expected to continue expanding its offering and attracting more users looking for synthetic asset trading opportunities.
5. Yearn.finance (YFI)
Yearn.finance is a decentralized platform that automates yield farming strategies to help users maximize their returns on their cryptocurrency investments. By connecting users with the highest-yielding opportunities in the DeFi space, Yearn.finance offers a convenient way for users to optimize their passive income in the cryptocurrency market.
In 2020, Yearn.finance experienced explosive growth, with its native token, YFI, reaching a market capitalization of over $1 billion in just a few months. In 2021, Yearn.finance is expected to maintain its momentum and further solidify its position as a leader in the DeFi yield farming sector.
In conclusion, decentralized finance is poised to revolutionize the traditional financial system, with cryptocurrencies playing a key role in this transformation. As the industry continues to evolve, these top 5 crypto coins are worth watching in 2021 for their potential to drive innovation and growth in the DeFi space.
