Without a doubt, dApps will continue to disrupt the crypto world as companies are investing heavily in the development of the DeFi ecosystem. Likewise, investors are willing to earn more returns by plowing various cryptocurrencies back into DeFi, which in a way is also responsible for the growth.
Decentralized Finance, or DeFi, is gaining more credence from crypto enthusiasts daily with the development of dApps, which utilize the Ethereum blockchain. The blockchain’s smart contract eliminates the need for middlemen during transactions, therefore, creating secure, efficient and fast transactions.
DeFi Projects You Should Follow in 2021
Following the rise in popularity of DeFi in 2020, many crypto users are on the lookout for projects that can help them maximize profits this year. Some of the projects you can follow in 2021 include:
Aave is built on the Ethereum blockchain and is best described as a lending pool that gives both lenders and borrowers access to 17 different cryptocurrencies including ETH, SNX, YFI and stablecoins like DAI.
To incentivize users and facilitate lending and borrowing, the platform has two types of tokens; the aTokens and AAVE tokens. The aTokens are issued to lenders who deposit to the liquidity pool so that they can earn interest on their deposits. The AAVE token, which is the native coin, offers more benefits such as discounted fees when borrowers use AAVE as collateral.
A phenomenal attribute of the Aave protocol, which is why crypto users are crazy about it, is the “flash loan” feature. This provides an avenue for advanced crypto users to have access to flash loans, borrow as much money and repay within the same transaction very fast. Users can profit from this through arbitrage, collateral swapping and wash trading.
Just recently, on the 26th of January, AAVE reached a new all-time high at $278. 90 with its TVL (Total Value Locked) reaching a new high of $3.75 billion. This is a result of the spike in demand for flash…