DeFi, short for Decentralized Finance, is a relatively new and rapidly growing concept in the world of finance but its use cases rapidly found their space in everyday world. It refers to a financial system that is built on blockchain technology and operates without intermediaries such as banks or other financial institutions. Instead, DeFi platforms and protocols are powered by smart contracts, which are self-executing pieces of code that automate financial transactions. In this era of digitalization, DeFi is gaining momentum as people become more aware of the advantages it offers.
In this article, we will mainly talk about the best DeFi protocols and platforms of the moment as well as their different projects in order to allow you to orient yourself towards the DeFi protocols which correspond best to your needs. Don’t hesitate to do extensive research on DeFi, given the frequency of scams and frauds in the crypto community.
TOP DeFi Protocols & Platforms and their Use Cases
RenQ Finance (RENQ)
RenQ Finance is one of the most well-known DeFi’s on the market. It stands out for its commitment to the democratization of finance. DeFi also offers an app that makes it easier for you to manage your finances.
Thanks to its RENG currency that connects all blockchains, you can participate in exchanges in agriculture, mining, and even participate in short sales while having good control over your assets. RenQ also features low transaction fees that can save you significant money over time.
Curve Finance ($CRV)
Curve Finance specializes in the decentralized exchange of Stablecoin. It is a DeFi that is considered to be one of the best investment opportunities in DeFI. The reason is that a protocol that specializes in the exchange of stablecoins can take the largest share of the market.
A major advantage of Curve is its low slippage and high liquidity, achieved through a unique liquidity provision mechanism called the constant product market maker (CPMM), which makes it easy to trade stablecoins even if there is no order book. This means that users can trade stablecoins with minimal price impact and high efficiency. It also offers a high return on its cash pools, making it an attractive option for yield producers.
Pancakeswap
Pancakeswap is a decentralized exchange (DEX) built on the Binance Smart Chain (BSC), a blockchain platform compatible with the Ethereum Virtual Machine (EVM). Pancakeswap allows users to buy, sell and trade a variety of crypto-currencies, including non-fungible tokens (NFTs).
Pancakeswap operates using a decentralized automated market maker (AMM) model, which means it uses algorithms to set prices for assets traded on the platform. This allows for fast and efficient trading, as there is no need for an order book or for orders to be matched by a centralized entity.
Avalanche (AVAX)
Avalanche is one of the fiercest competitors of Ethereum. But it is distinguished by several criteria. Notably, its ability to perform up to 6500 transactions per second without registering a bug. This is something that most other DeFi’s can’t do.
This feat is possible thanks to the unique architecture of Avalanche which is composed of 3 individual blockchains namely the X-Chain, the C-Chain, and the P-Chain. Each chain has a distinct purpose, and this innovative approach is a radical departure from the “all nodes validate all transactions” approach used by Bitcoin and Ethereum.
If you want to join the blockchain revolution, it may be worth taking a look at Avalanche, which offers huge possibilities.
Lido DAO
Lido DAO is a DeFi that allows you to earn rewards passively. You can bet your ETH with no minimum deposit and generate profits constantly in a passive way.
What’s also interesting about Lido DAO is that as a member you can participate in the decision-making regarding the future of the platform. Basically, your opinion counts too. Feel free to research further to learn more to protect yourself from scams.
Top DeFi Projects with Major Potential that Failed
Numerous DeFi projects have failed due to various reasons in recent years. Some failed due to mistakes, while others failed due to external forces. And some projects failed due to a combination of both factors. There are several well-known examples of such circumstances that we’ll discuss below.
The Rise and Fall of Solana
Solana DeFi was a decentralized finance platform built on the Solana blockchain. It was meant to bring together all aspects of digital ownership and financial services, allowing users to access a wide range of services such as lending, borrowing, trading, and investing. With Solana DeFi, users could take advantage of automated liquidity pools and earn rewards for providing liquidity, as well as access marketplaces to purchase and sell digital assets. Additionally, Solana DeFi offered a range of tools for developers to build and deploy their own decentralized applications.
The Macalinao brothers, the founders of Solana, managed to make their team look enormous when the reality couldn’t have been further from the truth. The brothers used multiple accounts to fake a vast ecosystem and essentially pulled off a scam. This became evident over time and most lost their faith in the project, causing Solana to lose almost 97% of its original value since November 2021. The coin is down by 95% since the start of 2022. The Solana DeFi project is an example of how an inspiring idea turned into a disappointment for many users.
Victims of Dubious Tokenomics: Luna with Anchor Protocol
The Luna with Anchor Protocol is one of the most prominent victims of dubious tokenomics. The project, which was launched in late 2018, was a decentralized lending and borrowing platform that allowed users to leverage their crypto assets for liquidity. In order to provide this service, Luna with Anchor created its own ERC-20 token, which was used to facilitate transactions on the platform.
Unfortunately, the project quickly encountered issues due to the lack of transparency and accountability with its tokenomics. Most notably, Luna with Anchor Protocol failed to provide consistent information about its token supply, which caused confusion and suspicion among users. Additionally, the project raised funds in an unregistered security offering, leaving investors with no legal recourse if they were to experience any losses.
Hacked Projects: Wormhole Bridge
Wormhole Bridge aims to bridge the gap between traditional financial products and decentralized finance (DeFi) projects. The platform seeks to provide a secure and transparent infrastructure for users to quickly transfer value between the two ecosystems. Unfortunately, it was recently hit by a malicious attack, resulting in stolen funds and a temporary suspension of services.
The attack occurred when hackers exploited a vulnerability in the project code, allowing them to deposit tokens on Wormhole Bridge without verification. This allowed the hackers to take control of the tokens and subsequently withdraw them from the platform. As a result, an estimated $1.3 million in user funds was stolen. The team tried to counteract, but the damage to their reputation was done. We will see a similar case with RING Financial in the next section.
RING Financial Token: The Experimental Project with Great Potential
We can’t finish our list of the best DeFi without talking about RING Financial which was also one of the most promising DeFi but had some security issues.
Unlike the other DeFi’s we’ve seen above, RING Financial offered something unique in terms of democratizing finance. RING Financial was a platform where one could purchase tokens in all of the best DeFi protocols at the same time. The difference with other platforms is that here you can enter the market with small prices. In other words, there is virtually no barrier to entry.
In addition, RING Financial offered rewards to those who had the RING Financial Token. In fact, RING Financial was so successful that its direct competitors began to lose their reputation.
Only a short time after the release of the RING Financial Smart Contract, a hacker noticed a flaw in the rewards section of the RING Financial token. The hacker took advantage of this to offer himself a large number of rewards. This scam led to the failure of the project. Otherwise, today, RING Financial Token would surely be one of the best DeFi. We hope that RING Financial project will be back very soon.
So here is our list of top DeFi projects for 2023. And while scams, frauds, and hacks are abundant in the world of DeFi, keep in mind that through each iteration, the DeFi space keeps evolving. Scams and hacks are vastly different and all that is left to do for both scammed users and hacked projects is to learn from these experiences.
Meta title: 2023’s Top DeFi Protocols including RING Financial and More
Meta description: Uncover the top DeFi protocols of 2023 and their revolutionary use cases. Explore the potential of RING Financial in reshaping decentralized finance.