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What are DeFi tokens?

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Introduction

With the advent of digital platforms and tokens, advances have been made in the field of cryptocurrencies that have been able to attract positive feedback from cryptocurrency enthusiasts. According to Mohammad Hosseini, DeFi platform tokens have become the best tokens available, surpassing Ethereum and Bitcoin tokens. He explains about these tokens through an interview.

Mohammad Hosseini is one of the young entrepreneurs who has established a holding company in the field of digital currencies in Iran. He was born in July 1996 in Tehran and has a master’s degree in mechanical engineering. After getting acquainted with the stock market and many successes he achieved in this market, he entered the field of cryptocurrencies in 2015 as a Bitcoiner and trader. Now he is a well-known analyst in the field of cryptocurrencies and an experienced lecturer in this field.

What is DeFi?

“Decentralized Finance” refers to the Blockchain finance system based on the Blockchain, which was created to provide decentralized financial services to users. DeFi has been one of the most successful platforms for creating the largest high-demand tokens in the cryptocurrency ecosystem.

Given that DeFi tokens have performed better than Bitcoin tokens, the system has made great strides in decentralized financial tokens as a valuable tool for economic growth. One of the main drivers of cryptocurrency markets has been defaults. Last year, Ethereum and Bitcoin which grew by 200 and 380 percent, respectively, failed to grow as much as DeFi tokens. In the following, we will introduce some famous tokens in this field.

1inch

This token was introduced by a 1inch cryptocurrency exchange affiliated with Mooniswap. This beneficial token is a governance token. In fact, 1inch is a platform for decentralized exchanges. This exchange creates the highest exchange rate of tokens by dividing the order and combining several routes in different exchanges. 1inch also supports various wallets and other exchange cash pools.

A total of 90 million 1-inch tokens worth $ 20 have been awarded to those who have used the exchange at least once. This token is based on the Ethereum network, which rewards liquidity providers.

Aave

Aave is one of the first and most advanced decentralized financial protocols, and it enjoys one of the highest market values among other DeFi coins. Aave is a management token or governance token created on the Ethereum Blockchain. So, the owners of this token can vote on the development path of the project and actually manage Aave. Ethereum owners can easily lend their cryptocurrencies and take cryptocurrency through Aave.

Synthetix

Synthetix, abbreviated as SNX, is one of the leading decentralized financial operating systems. Synthetix is ​​primarily a decentralized exchange. Synthetix provides a platform for the dissemination of artificial assets that enables users to export and trade in artificial assets, the digital assets that represent other real assets such as stocks, fiat currencies, commodities, or cryptocurrencies. This mechanism also provides an incentive for users to provide operating system liquidity.

The Synthetix protocol was developed in early 2017 by Kain Warwick. Warwick is currently the non-executive director of blueshyft, a network of more than 1,200 retail outlets in Australia.

Yearn

Yearn finance is a system of protocols built in Ethereum that aims to simplify user interaction with popular DeFi protocols and maximize the annual percentage return (APY) of cryptocurrencies deposited in DeFi. This protocol allows users to optimize their yield farming results by combining different platforms. The most popular protocol is the Yearn platform (the ecosystem), which automatically shifts the user budget between DeFi lending protocols such as Compound, Aave, and Dydx to maximize APY. The entire ecosystem of Yearn is developed and managed through its YFI token.

Uniswap

Uniswap, which is a decentralized exchange, operates using liquidity pools, and individuals invest in these pools to provide liquidity for various token transactions. These investors are rewarded for their work and share in the transaction fee. These pools are automatically managed by smart contracts. In this way, the UniSwap platform has been able to solve the liquidity problem and this is the reason for its popularity.

Uniswap is an Ethereum network-based protocol for trading ERC20 tokens. Unlike many exchange offices designed to charge commissions, UniSwap is a tool for people in the community to exchange tokens without the need for an intermediary or third party. Unlike many other exchanges, the UniSwap platform also does not match the buyer and seller to set the price and execute the trade.

Sushiswap

SushiSwap calls itself an improved and user-friendly form of Uniswap. Unlike traditional, centralized exchanges such as Binance, where marketers are employed, Sushiwap is a decentralized, community-based platform where users provide liquidity.

Users who can be said to be market makers of the SushiSwap network receive a reward for their work, which is the same as Sushi tokens. This token allows its holders to participate in the management of the network and allows them to earn some trading fees. Sushi token holders must submit a bid to participate in network management, and all token holders can use their tokens to vote.

Compound

Compound is a decentralized, Blockchain-based protocol that provides a platform for borrowing and lending in the field of cryptocurrencies. Holders of the main token of the Compound network, called Comp, are allowed to comment on the management of this network.

The popular Compound protocol is one of the most successful projects in the field of DeFi, created for decentralized lending and borrowing. Compound network and cryptocurrency is supported by Coinbase, and Coinbase has been with the project since its inception, investing about $ 8 million in it from the beginning. Later, the Compound community created the COMP token to manage this protocol, which is one of the most popular ERC-20 tokens and was created on the Ethereum Blockchain.

Maker

The Maker token, abbreviated as MKR, is a utility token for a Maker project created on the Ethereum Blockchain. This particular platform is based on Blockchain technology and was created to facilitate international payments alongside peer-to-peer (P2P) transfers. The DAI coin is a fixed coin created and operated in conjunction with the maker. The main motto of the Maker platform is to fight the current market fluctuations.

0x Protocol

This protocol is based on a non-chain order relay with a chain settlement. In particular, orders are signed and distributed on the Blockchain page, while settlement is made on the Blockchain. Unlike DEXs 1.0 built by Ethereum, for example, this protocol allows you to maintain and cancel orders while maintaining the non-binding feature of DEX without any associated hassle costs. In addition, the 0x protocol enables collaboration between dApp (Decentralized Application) and enhances network liquidity through network effects.

0x protocol tokens called ZRX are used for 0x drive and control functions. They are also used by relays to create liquidity pools.

Balancer

The Balancer protocol is an Ethereum-based automated market maker (AMM) that enables users to monetize the platform with cash. Balancer is a second tier platform built on ion swaps that allows marketers to combine several assets of different weights in a single pool.

Automated Marketplace (AMM) is a decentralized exchange protocol that relies on a mathematical formula for asset pricing. Pricing in automated market makers is based on the pricing algorithm instead of using the order book that exists in traditional exchanges.

Traditional marketing usually takes place in companies that have complex resources and strategies. Marketers help you to get the right price and difference in purchase and sale prices in order offices such as exchange offices. Automated marketers decentralize this process and allow everyone to create a market in the Blockchain.

Concluding remarks

DeFi literally became a banquet for those who got attacked from one pool of liquidity to another to obtain tokens of sovereignty. After earning the tokens, these people quickly sold them in the market. DeFi tokens attracted the attention of many people and in this article, the top 10 tokens in the field of DeFi were discussed.

Summary: DeFi has had successful projects in the field of cryptocurrency tokens that were able to attract the attention of many users and have become one of the most successful projects. However, it should be noted that not all projects on this platform have been successful, and there have also been some failed projects.

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