Decentralized Finance (DeFi) is one of the trending topics in the crypto space today. For this reason, DeFi lending platforms continue to look promising to prospective users every day in the DeFi space. In fact, this has opened the door for our top 10 DeFi lending platform in 2021 discussion today. Now, let’s consider the most influential DeFi lending platforms today.
However, DeFi lending platforms enable users to become lenders and borrowers in a decentralized manner. DeFi lending platforms mostly are based on smart contracts that operate in an open-source blockchain network. This means that they mostly operate via Ethereum.
DeFi means a category of platforms capable of providing financial services like investing, lending, trading, etc. This article will cover the top and the leading DeFi lending platforms that have a significant impact among the top 10 DeFi lending platforms in 2021.
Also, DeFi lending platforms give loans to no one but emerging companies, businesses, and the already existing firms. They do all these without any peer-to-peer (P2P) interference from nowhere. This is because the DeFi platform is decentralized.
In addition to this, DeFi protocols issue loans for the public and give access to everyone to earn interest completely on cryptocurrencies. Now, join me to talk about the best DeFi lending platforms in crypto one at a time.
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Top 10 DeFi Lending Platforms 2021
Now without further ado, let’s meet the top 10 DeFi lending platforms in 2021.
To begin with, Maker (MKR) is one of the top 10 DeFi lending platforms this 2021. In fact, Maker is well-known within the DeFi ecosystem.
Maker is a cryptocurrency that operates mainly via the Ethereum blockchain. Moreso, Maker mainly offers support for the DAI stablecoin functionality and its price stability. This specifically pushes Maker among the best DeFi lending platforms in crypto.
The Maker protocol is designed in such a way that it reduces the price volatility of the DAI stablecoin. Through Ethereum powered MakerDAO, Maker enables borrowers and lenders to borrow different types of digital currencies without any counterparty risk.
Maker provides an easy option for individual users to create a Collateralized Debt Position (CDP) on its blockchain network. They can do so by locking up Ethereum to receive DAI. In terms of payment, users make transactions using MKR token and DAI. Right after the transaction gets approved, the MKR token and DAI burn completely once the CPD gets closed.
Meet UniSwap, it is an open-source and decentralized crypto exchange that was issued via the Ethereum network. As a DEX platform, it was built into the crypto market in 2018.
Likewise, centralized exchanges that charge a higher fee before listing new coins, UniSwap charges almost a near-zero fee in terms of coin listing. Due to its decentralized (DEX) features, users control their funds securely and effortlessly compared to centralized exchanges.
Based on its DEX functions, UniSwap operates on two major smart contracts called ‘Exchange’ smart contract and ‘Factory Smart contract’. This pushes Uniswap among the top 10 DeFi lending platforms in 2021.
Both contracts are automated computer software created purposely for a specific task on the UniSwap exchange platform. Hence, the factory smart contracts are specifically designed to add new tokens to the platform while the exchange contract enables all the token swaps and tradings.
Similar to Uniswap, Aave is also a decentralized lending platform in the DeFi market. Aave is popularly known as ETHLend powered by the Ethereum blockchain. This means that Aave runs via the Ethereum network.
Established in 2017 and founded by Stani Kulechov in Switzerland, Aave offers its users several advantages. In this list of top 10 DeFi lending platforms in 2021, Aave DeFi protocol plays an outstanding role among the influential DeFi lending platforms today.
As a decentralized peer-to-peer marketplace, it has features that enable the borrowing and lending of digital currencies. The Aave’s P2P network guarantees borrowers and lenders to agree on terms and conditions on loans.
After the agreement is done, it issues the loans through a smart contracts protocol. Aave’s platform operations also depicts that it allows individual users on its DeFi platform to earn interest in crypto with no counterparty involvement.
Aave users do not have to gain trust from any person or institution to handle their funds.
The next is Compound, a DeFi-based lending platform in the crypto space. As an influential DeFi lending platform today, it functions mainly using the Ethereum blockchain. Compound was built basically in 2018.
On this note, Compound smart contract is specifically built via the Ethereum network. In terms of technology, Compound operates as an open-source marketplace.
As an open-source protocol, it allows users to borrow or lend against collateral. Moreso, Compound provides options that allow its users to access the compound liquidity pool anytime, anywhere without hassle. Also, users allow crypto lovers to deposit different kinds of cryptos for trading.
By giving users access to its liquidity, holders easily earn interest based on the digital asset they hold. Best of all, Compound gives support to several digital assets including DAI, ETH, USDC, etc. COMP functions as a native currency within the Compound ecosystem.
In terms of rate, Compound automatically regulates based on users supply and demand for it. For this reason, it enables users to easily supply their assets to the compound liquidity pool to earn interest as soon as possible.
Next on the list is Curve Finance, a decentralized exchange network that enables its platform users to effortlessly swap and trade Ethereum. Much like Compound’s lending protocol, Curve also provides liquidity in the DeFi market.
As an influential DeFi lending platform today, Curve pioneers its liquidity to the market by using a market-making algorithm. This algorithm specifically buys and sells cryptos wherein its benefit from bid and ask price spreads.
Moreover, Curve works as an automated market maker protocol that allows users to swap stablecoins with low mining fees. Anyone anywhere can also add their assets mainly to many other liquidity pools and earn interest seamlessly.
By doing this, all you need to have is an Ethereum wallet. Moreso, Curve makes it easy to swap all kinds of tokenized versions of coins at all times. It also provides swapping options for tokens that have almost similar price range.
We cannot talk about the top 10 DeFi lending platforms in 2021 without mentioning WBTC. Wrapped Bitcoin (WBTC) is also a DeFi-based lending protocol created in 2019. It mainly operates as an ERC20 token. However, each one of WBTC assets is equivalent or equal to one Bitcoin.
On the other hand, WBTC integrated itself into many other platforms like Ethereum Wallets, Decentralized Applications (DApps), and Smart Contracts. Via WBTC, users can convert Bitcoin to Wrapped Bitcoin, and vice versa.
Specifically, WBTC functions in such a way that users can gain access to Bitcoin cryptocurrency via the Ethereum network without any counterparty risk. Hence the name, WBTC is among the DeFi trending protocols this 2021.
As an open-source platform, it offers intuitive and easy-to-flow liquidity within the DeFi market. In terms of staking, WBTC makes it easy for individual users to stake Bitcoin via an interest earning protocol.
Up next is Harvest Finance, a decentralized finance (DeFi) platform aggregator in the DeFi space. An automated platform designed for users who are looking to put their assets together to produce a higher quantity, hence the name ‘Harvest’.
On the other hand, to yield more on the harvest Finance marketplace, individual users support themselves with tokens to start. Moreso, Harvest Finance directs users to the best and suitable place to farm. By doing this, it uses the newest farming approach to improve upon the yields.
Additionally, issues such as high transaction fees and the need for smart contract auditing is what led to the creation of the yield protocol. As a result, companies such as Haechi Audit and PeckSheild audit Harvest Finance.
In addition, Harvest Finance effectively manages and handles farmers Annual Percentage Yield (APY) and transaction costs. Alongside this, it strategically secures farmers’ funds in a more efficient manner.
FARM operates as a native currency within the Harvest Finance ecosystem. It ensures the to and fro of funds across the Harvest Finance ecosystem. Meanwhile, FARM started at a supply of 0 at launch. Both decentralized and centralized crypto exchanges list the FARM token.
As we see the DeFi ecosystem rapidly growing, the Synthetic protocol also plays a major role. This pushes Synthetic among the best and top 10 DeFi lending platforms in 2021. A Synthetic lending platform easily tokenizes real-world assets like metals, stocks, and currencies.
However, any tokens that are issued via the Synthetix blockchain network are called ‘Synths’. Synthetic offers a derivative trading service and allows anyone anywhere to gain a full on-chain experience with a wide range of digital assets. Synths are decentralized oracles.
Synthetix uses an ERC-20 smart contract. This means that it runs via the Ethereum blockchain network. It also enables the issuance of synthetic assets. By doing this, it gives support to synthetic commodities like gold, silver, synthetic cryptocurrencies, synthetic fiat currencies, etc.
Of note, Synth effectively tracks digital asset prices. By doing this, it gives users the option to hold and exchange Synths in the underlying assets. In fact, since Synth functions via Ethereum, it is easy to deposit it on various DeFi platforms without hassle.
Synthetix pioneers very essential volatility features for creating mature market platforms. In this case, it increases exposure to digital currencies that are not even accessible to crypto investors.
Everytime decentralized finance (DeFi) comes up in the cryptocurrency industry, Yearn.finance always shows up. Yearn.finance is a DeFi-based aggregator platform that focuses more on borrowing, lending, and yield farming. Also, it operates via the Ethereum blockchain network.
It increases individuals’ earnings specifically from yield farming platforms that provide stablecoins. As a DeFi-based protocol, it automatically switches between lending platforms, by doing this, one becomes more profitable compared to the other but the actual tokens remain the same.
Yearn.finance mostly offers its services using code. By using the code, it removes third-party involvement in terms of the transaction. It consists of several other independent products like:
APY – its an acronym that means annual percentage yield. In fact, APY is a percentage of a user’s interest earned from their savings. It also shows interest rates mainly across several other lending protocols.
Earn – a feature designed specifically to provide high returns from many other decentralized finance projects. Individual users easily generate YFI tokens by locking digital assets within Yearn.finance contracts that run through Balancer and Curve.
RenVM is an open-source platform that provides easy access to inter-blockchain liquidity for overall DeFi applications. Best of all, RenVM combines many digital assets including Bitcoin, Bitcoin Cash, ZEC, and many others to the Ethereum application.
It operates by enabling Bitcoin cryptocurrency to exist via other blockchain networks, particularly on Ethereum. People can also access different kinds of tokens from different blockchains by using RenVM smart contracts without any difficulties wrapping or unwrapping tokens.
In this discussion of the top 10 DeFi lending platforms in 2021, we have seen that in terms of technology, decentralized finance protocols contribute massively to the DeFi space. Best of all, due to how best the DeFi protocols operate, they greatly push DeFi adoption not only in the DeFi ecosystem but also everywhere. This makes them the most influential DeFi lending platforms in crypto today. However, DeFi lending platforms continue to look more promising with attractive services to users in the DeFi space.