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Top DeFi coins 2022: Top 3 market cap tokens in April

By  Yoke Wong

Edited by Vanessa Kintu

14:07, 21 April 2022

Top DeFi coins 2022: Top 3 market cap tokens in April DeFi -Decentralized Finance on dark blue abstract polygonal background. Concept of blockchain, decentralized financial system. 3d illustration
Top DeFi coins 2022: Top 3 market cap tokens in April Photo: Photon photo / Shutterstock.com

As the decentralised finance (DeFi) sphere continues to grow, more investments are flowing into cryptocurrencies projects. DeFi projects develop digital, peer-to-peer financial service technologies that could bypass traditional institutions and banks. 

These projects are often built on open-source blockchains such as Ethereum, which was founded in 2017 and became the most established DeFi blockchain with smart contract functionality. According to data provider Statista, the total value locked (TVL) in DeFi on the Ethereum blockchain was at $83.4bn in March 2022, up 42% from the previous year.

Total value locked in DeFi on the Ethereum blockchain, $ millions

Many have recognised the growing importance of DeFi projects, including David Yermack, a finance professor at New York University’s Stern School of Business, who wrote in January 2022: 

“Decentralised finance platforms will keep expanding into areas like lending, trading and derivatives.”

Some popular DeFi coins are accepted by retailers and merchants as payment for goods and services. 

Terra (Luna) coin price chart

Are you interested to learn which are considered the best DeFi coins? Read on for an analysis on the top performing DeFi coins, as well as their risks and potential benefits.

However, it is important to note this article does not constitute financial or investment advice. Before you choose to invest in any DeFi coin, always do your own research and remember that your decision should be based on your attitude to risk, your expertise in this market, the spread of your portfolio and how comfortable you feel about losing money. There are no guarantees. The cryptocurrency market is volatile. You should conduct your own analysis, taking in such things as the environment in which it trades and your risk tolerance. And never invest money that you cannot afford to lose.

According to data from crypto-asset tracking site CoinMarketCap, the top three DeFi coins by market capitalisation, as of 21 April, were Terra (LUNA), Avalanche (AVAX) and Wrapped Bitcoin (WBTC).  

Terra (LUNA)

terra (LUNA) token price chart]

Terra (LUNA) was one of the top performing DeFi coins in April. Its value  ncreased to $95.06 on 21 April, up 9% from the previous week, data from coinmarketcap showed. The coin had a market capitalisation of $33.29bn.

Terra network is a blockchain project founded in 2018 by South Korea-based Terra Labs.

According to Terra’s whitepaper, the blockchain aims to be a peer-to-peer electronic cash system. To overcome the challenge of volatility in cryptocurrencies and promote wide adoption of Terra, the network deploys a system of stablecoins – cryptocurrencies with value pegged to fiat currencies or commodities.

“The Terra Protocol with its balance between fostering stability and adoption represents a meaningful complement to fiat currencies as a means of payment and store of value.”

The Terra Protocol runs on a Proof of Stake (PoS) blockchain, where miners need to stake LUNA to mine Terra transactions. Miners are rewarded with the transaction fee on Terra network, which is default between 0.1% and 1%.

Terra claims that e-commerce transaction on the network could be much cheaper than with traditional payment options such as credit cards, as the fee per transaction is capped at 1SDR – an asset based on a weighted basket of currencies (US dollar, euro, Japanese yen, pound sterling, Chinese renminbi) created by the International Monetary Fund (IMF).

According to cryptocurrency research and data site Is This Coin A Scam, the Terra project had a safety score of 6.61 and was awarded a ‘good’ rating, at the time of writing. Terra scored a nine out of 10 on trading volume, more than eight for market sentiment and under seven for community. 

The other metrics (development, awareness and credibility) were awarded less than six out of ten. The score is based on the site’s research on social media platforms such as Reddit and Twitter. According to the research data site, LUNA coin “is suited to an adventurous investment style”.

Avalanche (AVAX)

Avalanche (AVAX) token price chart

BTC/USD

67,598.00 Price
-0.130% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

US100

19,815.20 Price
+1.500% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 1.8

ETH/USD

3,442.85 Price
-1.410% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

XRP/USD

0.61 Price
+2.440% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

Avalanche is a smart contracts platform with a PoS protocol. The network’s coin is AVAX.

The platform claims to be highly scalable with the ability to handle a large volume of transactions at a speed of less than two seconds per transaction.

According to Avalanche whitepaper, the native coin’s supply is capped at 720 million coins, with 360 million available on mainnet launch on 21 September 2020. According to CoinMarketCap, the circulating supply of AVAX is estimated at 268.47 million coins. The coin had a market cap of $20.9bn at the time of writing (21 April).

AVAX is used for staking on the platform and governance of the network. Coin holders can vote on changes to the network.  They can also stake their coins to ensure the security of the platform and earn rewards. A validator must stake a minimum of 2,000 AVAX tokens for at least two weeks for a maximum period of a year.

Since Avalance’s launch on mainnet in September 2020, 191 projects have since deployed on the platform. The number of AVAX staked on the network at the time of writing (21 April) was 267 million.

According to Is This Coin A Scam, the Avalanche project had a safety score of 7.3 and was awarded a ‘very good’ safety rating. The cryptocurrency scored 10/10 on community, nine on development and more than eight for trading volume. 

The other metrics (sentiment, awareness and credibility) were awarded six or below. The site stated that AVAX was “suited to an adventurous investment style”.

Wrapped Bitcoin (WBTC)

Wrapped Bitcoin (WBTC) token price chart

Wrapped Bitcoin (WBTC) is a Bitcoin-backed cryptocurrency created to allow transactions on Ethereum’s DeFi ecosystem. WBTC is the first ERC20 token with the value pegged to Bitcoin in a 1:1 ratio. 

The circulating supply of WBTC is estimated at 280,105 coins. The coin has a market cap of $11.69bn as of 21 April.

According to WBTC, the aim of the cryptocurrency is to “bring greater liquidity to the Ethereum ecosystem including decentralised exchanges (DEXs) and financial applications”.

Bitcoin is the oldest cryptocurrency. The majority of trading takes place on centralised exchanges. By standardising the coin to the ERC20 format, smart contract functionality is enabled in bitcoin transfers on the Ethereum blockchain.

WBTC transactions on Ethereum are also faster than on the Bitcoin network. WBTC holders benefit from increased liquidity and processing speed. The minting of WBTC can only be performed by a custodian.

On Is This Coin A Scam, the Wrapped Bitcoin project had a 5.88 safety score and was awarded a ‘good’ rating. WBTC scored eight on sentiment and more than seven on trading volume. The other metrics were awarded six or below. The site claimed WBTC was “suited to an adventurous investment style”.

When considering what DeFi coins to invest in, investors should remember that the market is very volatile. Cryptocurrencies are high-risk assets. Forecasts are based on past performance. They can be wrong.

You should do your own research and base your decision to buy cryptocurrencies on your attitude to risk. Investors should gauge how comfortable they are about losing money. You should never invest money that you cannot afford to lose.

FAQs

Are DeFi coins a good investment?

Whether DeFi coins are good investments for you or not will depend on your portfolio composition, investment goals and risk profile. Different trading strategies will suit different investment goals with short or long-term focus. You should do your own research. And never invest money that you cannot afford to lose.

How many DeFi coins are there?

According to data on CoinMarketCap, there are 539 DeFi cryptocurrencies tracked by the crypto-asset tracking website. They have a combined value of approximately $154.5bn, as of 21 April.

What are the top DeFi coins by market capitalisation?

According to data from crypto-asset tracking site CoinMarketCap, the top three DeFi coins by market cap, as of 21 April, were Terra LUNA, Avalanche AVAX and Wrapped Bitcoin WBTC. 

What are the best DeFi coins to buy (now)?

Before you decide on which DeFi coins to buy, there are many factors to consider, including your investment goals, portfolio composition, risk profile among other factors. Only you can decide what are the best DeFi coins to buy. 

Markets in this article

AVAX/USD
Avalanche / USD
32.2964 USD
-0.3588 -1.110%
WBTC/USD
WBTC/USD
68471.15 USD
524.1 +0.770%
LUNC/USD
LUNA Classic / USD
0.00009582 USD
-0.00000049 -0.540%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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