Top 7 Best DeFi Cryptocurrencies To Invest In October 2021 

Last Updated September 30th 2021
8 Min Read

Here are seven best DeFi cryptocurrencies to buy this month

Today’s article introduces seven DeFi cryptos that worth buying in October.

What is the best DeFi cryptocurrency to buy this month? Looking for the top 7 DeFi Cryptocurrencies to invest In October 2021? We’ve got you covered!

Decentralized Finance (DeFi), a relatively novel concept with endless possibilities, has gained immense popularity in the crypto world over the past couple of years. DeFi is an umbrella term that defines a financial system functioning without third-party intermediaries such as banks. The entire ecosystem is dependent on every link in the chain rather than a central authority.

This nascent sector comprises financial instruments like cryptocurrencies, smart contracts, blockchain protocols, and decentralized apps (dApps). DeFi has been one of the fastest-growing sectors since 2019. In 2020, DeFi gained prominence, as evidenced by the rise of the sector from $700 million in January 2020 to the current $75.4 billion.

Thanks to DeFi, users can now obtain financial services such as loans, insurance, margin trading, and yield farming on a distributed ledger. Yield farming refers to earning rewards from staking digital assets on a network to help provide network liquidity.

The growth of DeFi has paved the way for a wide range of protocols and dApps, and this growth is likely to only move upwards from here. So if you are looking to become a part of this scaling ecosystem, investing in DeFi crypto assets could be a great start. 

Here are the top 7 DeFi cryptocurrencies to invest in October 2021:

  1. Uniswap 
  2. Chainlink
  3. Sushiswap
  4. MakerDAO
  5. Compound
  6. Aave
  7. Curve Finance

 

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Top 7 Best DeFi Cryptocurrencies To Invest In October 2021 

So, what’s the top Decentralized Finance (DeFi) cryptocurrency to buy for October 2021? We’ve compiled a list of 7 options for you to consider and explain why they’re the best you can get your hands on. 

1. Uniswap 

Total value locked (TVL): $4.2 Billion

Uniswap is a decentralized exchange (DEX) that is built on the Ethereum blockchain. Unlike centralized crypto exchanges such as Binance or Coinbase, DEXs allow investors to swap digital assets without creating an account. Uniswap transacts more than a billion dollars in cryptocurrencies daily, making it the most popular decentralized exchange in the world. 

The Uniswap exchange is an open-source project that has undergone a thorough review by the development community. All the smart contract coding on the platform is secure, and since Uniswap is non-custodial, hackers do not gain any profits from attacking it. 

The platform also provides more privacy protection when compared to centralized exchanges. The protocols of DEXs are permissionless, require no KYC, and allow users to trade without registering and logging in. The entire structure of Uniswap is geared towards privacy and anonymity. 

Uniswap's native governance token, UNI, kicked off 2021 with a price of $7.15. It has skyrocketed by over 750% in May with the price of $42 and is currently trading at around $24. UNI's impressive price movements and growing market cap make it a great investment choice. 

Don't Miss: Is Uniswap a Good Investment?

2. Chainlink

Total market cap: $10.9 Billion

Chainlink is a popular decentralized oracle network that plays a vital role in the implementation of blockchain technologies. The platform enables interoperability between the crypto and the fiat ecosystems by providing smart contracts (which drive DeFi) with secure, real-time data feeds. In other words, Chainlink serves as a middleware agent between traditional data sources, blockchain platforms, and smart contracts using its LINK token.

Chainlink is working to fight several blockchain-related issues such as the "oracle problem," centralization, and connectivity problems through various next-gen protocols. Decentralized finance protocols can improve their security and bolster development by offloading their oracle functionalities to Chainlink. The network strives to solve the protocol issues faced while creating safe and scalable oracles designed to suit their platforms. 

LINK is the digital asset used to pay for services on the Chainlink network. It is built on Ethereum in compliance with the ERC20 standard for tokens. LINK can be purchased and sold for fiat currencies or other cryptocurrencies. 

Chainlink is expanding the functionality of blockchain networks and is providing developers with a distinct level of flexibility. For these reasons, Chainlink (LINK) is one of the most promising DeFi coins in the market and is likely to generate massive gains in the future.

Check Out: Should You Buy Chainlink?

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3. Sushiswap 

Total value locked (TVL): $4.3 Billion

SushiSwap (SUSHI) is a DeFi platform designed to improve on other Ethereum dApps out there. Specifically, SushiSwap has introduced additional community control mechanisms and DeFi features compared to other protocols. It is an automated market maker (AMM) that helps in mitigating centralization in the market.

Unlike centralized exchanges that depend on an order book to link traders and dictate pricing, AMMs utilize smart contracts to build markets for any two crypto tokens. In this manner, the protocol achieves automated trading liquidity between any two cryptocurrencies. Sushiswap enables any project to obtain liquidity through smart contracts known as liquidity pools. Experts say that AMMs are ideal places to acquire scarce and low liquidity tokens.

One of the main benefits of SushiSwap is that the majority of the fees get paid back to users. Liquidity providers receive massive rewards for their continued contributions. Notably, SushiSwap is the first AMM to send all profits back to the community that sustains and maintains it. 

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4. MakerDAO

Total value locked (TVL): $11.9 Billion

Maker is a popular Ethereum-based decentralized autonomous organization (DAO) that lets people borrow and lend cryptocurrencies without credit checks. The network couples advanced smart contracts and a uniquely pegged stablecoin to accomplish this. MKR is the project's utility and governance token.

MKR is an ERC-20 token that represents an investment in the Maker ecosystem. The network is considered a pioneer in the market. For instance, Maker was one of the first tradeable tokens on the Ethereum network. Currently, it is one of the most popular Ethereum-based platforms and has over 2.1 million Ether locked in Maker CDP contracts.

Notably, Maker was also the first DAO ever. DAOs convert all the aspects of functionalities of corporations into smart contracts. They have become common in the market now partly because of the achievement of Maker. The central function of MKR is to affirm that DAO remains pegged to USD. This dual crypto strategy helps prevent volatility and provides users with more security.

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5. Compound

Total value locked (TVL): $10.5 Billion

Compound Finance is an emerging DeFi lending protocol that allows users to deposit cryptocurrencies and earn interest. Users can also borrow other crypto assets using the platform. Compound utilizes smart contracts that automate the storage and management of capital.

The interest rates for lending and borrowing on Compound are adjusted algorithmically, meaning that the platform automatically modifies them based on demand and supply. Additionally, COMP holders can also make adjustments to interest rates. 

Compound tokens (cTokens) are ERC20 tokens that represent a user's holdings deposited in the protocol. By putting ETH or other ERC20 tokens in Compound, users receive an equivalent amount of cTokens. For instance, locking up USDC in the protocol generates cUSD–tokens that the user can redeem for normal USDC later, in addition to the interest paid in USDC. 

Apart from earning interest on crypto assets, users can also borrow digital assets on Compound. Borrowing crypto has the added step of ensuring the value of your collateral is higher than a minimum amount relative to the loan. Compound, although relatively new, has witnessed significant growth and demand in recent times. 

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6. Aave 

Total value locked (TVL): $12.7 Billion

Aave is a famous decentralized lending system driving the demand and interest in the DeFi space to new heights. This next-generation protocol was one of the first projects to allow users to borrow, lend or earn interest through crypto holdings. 

Since its inception, Aave developers have worked dedicatedly to ensure the network is accessible to everyone. Features such as open access and ease of use make Aave ideal for retail investors and institutions alike. Aave has progressed to become one of the most popular DeFi apps out there. 

The Aave protocol offers various benefits to users. For one, users gain transparency over the entire platform's activities and lending processes. While traditional lending services work in a closed-door manner that leaves customers uncertain about their activities, Aave is a blockchain platform that is transparent to all.

One of Aave's top features is that it allows the borrower to gain exposure to various cryptocurrencies without owning them outright. Using Aave, users can earn rewards without the need to trade their favourite digital assets, which reduces the risk of loss. 

AAVE is the platform's ERC-20 utility token. It is a deflationary asset listed on numerous notable exchanges at the moment, including Binance. AAVE started 2021 by trading at $84.55. It has surged by a whopping 300% and is currently trading at around $276.

The Aave team has stated plans to make AAVE the primary governance token for the project soon.

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7. Curve Finance 

Total value locked (TVL): $13.6 Billion

Curve Finance is a decentralized exchange (DEX) built for stablecoins that lets users earn trading fees for providing liquidity. Users also receive governance tokens as an incentive to engage with the protocol. Curve Finance's liquidity pool is designed to make trading more efficient. In turn, this helps users make cheaper trades. 

With the middle-trade removed, Curve Finance users can exchange tokens for a trading fee of just 0.04%. By eliminating heavy fees, the DEX has paved the way for users to make more trades to alter their liquidity portfolio as they wish.

Curve also uses an algorithm that reduces slippage as opposed to increasing liquidity. For the average traders, this means they can make more trades while paying less for each one. To accomplish this task, Curve deploys the automated market maker (AMM) protocol. 

CRV is the governance token of Curve Finance, and it allows holders to make crucial decisions related to the protocol. CRV holders can vote when they lock their holdings. They get to make decisions on token burning schedules, changing transaction fee structures, among other things. 

The longer one locks their CRV token, the more voting power they acquire. The highest duration for locking crypto tokens is four years.

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DeFi Cryptocurrencies to Invest in October 2021: Final Thoughts 

DeFi, as a sector, is working to facilitate faster, cost-effective financial transactions every day, with no paperwork, no minimum transaction amount, complete transparency, and accountability. 

At the time of writing, digital assets worth about $75 billion are locked in DeFi protocols. This is quite significant, considering that this value barely crossed the $1 billion mark at the beginning of 2020.

DeFi is here to stay, and it is not too late to become a part of this fast-growing sector. That said, investors are advised to research and perform due diligence before investing.

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