The DeFi sector of crypto industry, according to data provided by CoinGecko, is valued at over $126 billion, with a total trading volume of over $7 billion in the past 24 hours alone. With so many innovative projects in this space, it might be a daunting challenge to figure out which ones can be the real deal for you. In this article, we’ve compiled a list of the best DeFi coins you should keep an eye on in 2022.

Before we begin with the list, let’s understand why this sector of digital currency is a great deal.

Introduction to Decentralized Finance (DeFi)

Decentralized finance, or DeFi, refers to financial transactions that do not go via banks. Bitcoin was created in the aftermath of the late-2000s global financial crisis to allow individuals to access the services they require. According to the World Bank, 1.7 billion individuals do not have a bank account, yet nearly two-thirds have access to a mobile phone. Decentralized finance advocates seek to reach out to these people and give them banking services, promoting financial inclusion.

The goal is to create an online version of traditional financial services that are easily accessible online. The purpose of decentralized finance is to provide a modern, inexpensive alternative to these internet-based services.

Theoretically, there are additional advantages to international financial transactions. Traditional financial institutions’ exorbitant commission costs and remittance service charges, and the cost of currency conversion are two issues that many consumers face when sending money cross-borders. The theory is that by providing a less expensive option, remittance and commission costs will decrease, and currency conversion will have to become less expensive in order to remain competitive.

How Does This Sector Work?

The majority of DeFi apps, protocols and other services are now based on the Ethereum blockchain network. And if you’re a crypto enthusiast, you’ve probably heard of this word before.

If you don’t know what we’re talking about, here’s a simple summary!

Ethereum is a massive technological undertaking with a concept similar to Bitcoin. Ethereum, on the other hand, is a decentralized technology network that stretches all the way to the extreme ends of the world rather than merely using currency.

As a result, it, as well as the apps and protocols, are controlled by no single entity. That implies Ethereum isn’t supported by any third-party applications.

Ether is Ethereum’s native cryptocurrency, and it, like Bitcoin, may be purchased from any crypto exchange website.

The Basics of DeFi Coins

Before you decide to jump into the game and invest in DeFi coins, you’ll need to know what they’re all about.

DeFi coins are de facto currencies based on decentralized applications and protocols. They resemble cryptocurrencies in certain ways. While both terms are often used interchangeably, there are some distinctions between the two coins.

People can borrow and lend money with DeFi coins and do other tasks connected with traditional banking. They are, in other words, tokens for a completely new financial ecosystem.

It’s worth noting that most of DeFi coins are built on the Ethereum platform. Because of its popularity and size, Ethereum has drawn the greatest attention, resulting in more DeFi tokens and other crypto assets being used on the network.

DeFi Coins: Are They A Good Investment?

If you’re looking to put your capital into a specialized sector that’s developing exponentially, DeFi coins could be a suitable fit for your portfolio.

However, DeFi coins are exceedingly volatile and frequently speculative like all crypto assets. As a result, before investing in the greatest DeFi projects for your portfolio, we recommend performing some research.

Best DeFi Coins With High Potential to Grow in 2022

As the popularity of DeFi coins grows, an increasing number of people are looking for ways to invest in them. However, with tens of thousands of possibilities to choose from, it might be difficult to find the best one.

Fortunately, we’ve created this section for you to read about the top 5 DeFi coins that are expected to rise this year.

Let’s find out which one can offer you enormous wealth.

1. Uniswap ($UNI)

Uniswap is a well-known decentralized trading platform that helps automate the trading of DeFi coins.
Uniswap, an automated market maker (AMM), launched in November 2018, has grown in popularity due to the DeFi craze and the resulting spike in token trading.

Uniswap seeks to keep token trading automated and open to anyone who owns tokens while enhancing trading efficiency over traditional exchanges.

Uniswap improves efficiency by using automated ways to solve liquidity issues, avoiding the early decentralized exchanges’ problems.

$UNI Coin

At the time of writing, $UNI is trading at $9.42 USD with a 24-hour trading volume of $193 million. Uniswap has been up 1.31% in the last 24 hours.

The current Coingecko ranking is #34, with over a $6 billion market cap. It has a circulating supply of 690,496,925 UNI coins and a max. supply of 1,000,000,000 UNI coins.

2. Terra ($LUNA)

The next token on our list of best DeFi coins in 2022 is Terra ($LUNA).

TERRA is a stablecoin-based blockchain protocol that creates a vibrant ecosystem, delivering DeFi technology to the masses.

TERRA operates by issuing a set of stablecoins that are linked to the price of fiat currencies. The $LUNA token, which is TERRA’s staking and governance token, absorbs the price volatility.

This system allows users to speculate on the $LUNA price while also reaping the benefits of staking and Yield Farming rewards.

$LUNA Coin

At the time of writing, $LUNA is trading at $94.13 with a 24-hour trading volume of over $2 billion. Terra has been up 4.45% in the last 24 hours.

The current Coingecko ranking is #8, with over a $33 billion market cap. It has a circulating supply of 353,843,221 LUNA coins.

3. Avalanche ($AVAX)

Avalanche is the industry’s quickest smart contracts platform. Furthermore, AVAX has the most validators securing its protocol of any proof-of-stake network.

Holders of Avalanche tokens are urged to stake their tokens to help safeguard the network while also earning incentives. Avalanche is a DeFi ecosystem that includes dozens of exchanges, wallets, markets, and other services.

Avalanche is a great long-term pick for 2022 as the top DeFi project on the market. You can’t go wrong with Avalanche if you’re looking to invest in DeFi for the coming year.

$AVAX Coin

At the time of writing, $AVAX is trading at $79.49 with a 24-hour trading volume of $575 million. Avalanche has been up 3.07% in the last 24 hours.

The current Coingecko ranking is #10, with over a $21 billion market cap. It has a circulating supply of 268,475,623 AVAX coins.

4. PancakeSwap ($CAKE)

PancakeSwap is also a decentralized exchange built on Binance Smart Chain. Think of it as a direct competitor to Uniswap, which is a decentralized exchange built on the Ethereum network.

Because CAKE is on the BSC network, PancakeSwap has a significant advantage over Uniswap in terms of transaction costs.

PancakeSwap, as a DeFi platform, also allows users to earn rewards through Yield Farming. You can help PancakeSwap by providing liquidity in exchange for tokens, which can then be exchanged for any cryptocurrency of your choice.

PancakeSwap, being the top decentralized exchange on BSC, has a bright long-term future in 2022. As cryptocurrency becomes more mainstream, exchanges such as PancakeSwap will experience a growth in users and transaction volume, resulting in a rise in total worth.

$CAKE Coin

At the time of writing, the $CAKE coin is trading at $8.62 with a 24-hour trading volume of over $193 million. PancakeSwap has been up by 2.31% in the last 24 hours.

The current Coingecko ranking is #54, with a live market cap of over $2 billion. $CAKE coin has a circulating supply of 285,300,908 tokens.

5. UniFarm ($UFARM)

UniFarm is a one-of-a-kind staking solution where the best projects in DeFi space come together to provide value to investors. UniFarm allows you to stake one token but earn multiple high-value tokens, so in addition to a great APY, your returns are automatically diversified as well.

$UFARM Coin

At the time of writing, the $UFARM coin is trading at $0.011002 with a 24-hour trading volume of $47,642.59. UniFarm has been up by 0.48% in the last 24 hours.

The current Coingecko ranking is #2354, with a live market cap of $422,209. $UFARM coin has a circulating supply of 38,375,919 UFARM tokens.

Closing Thoughts

As the DeFi ecosystem evolves, more and more people are joining it. Over the last year, we’ve seen a significant increase in users and overall acceptance of DeFi coins and their applications. This trend is expected to continue until 2022, implying a higher price for projects in the space.

This is not investment or trading advice. Before purchasing any cryptocurrency, always conduct your own research.