What is De-Fi?
Decentralised Finance, or DeFi coins, defined as cryptocurrency assets that form part of, or originate from, DeFi protocols. These DeFi coins play a significant role in the ecosystem associated with decentralised finance and they derive their value from the use as well as widespread adoption of these protocols.
Our 10 Best Handpicked Defi Coins for 2025:
- ✔️Compound (COMP)
- ✔️Maker (MKR)
- ✔️ChainLink (LINK)
- Dai (DAI)
- Yearn.finance (YFI)
- Band Protocol (BAND)
- Ren (REN)
- Bancor (BNT)
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Let’s address each crypto on this list in a bit more detail. View the pros and cons of each de-fi coin.
Compound (COMP)
COMP is a decentralised financial protocol that is based on Ethereum’s ecosystem and blockchain. COMP platform has one crucial duty in creating an environment in which both lenders and borrowers of cryptocurrency can operate. The former makes their digital money work form them and the latter is granted access to loans without worrying about third-party regulations.
The COMP platform does not contain intermediaries and lenders are investors who want their coins to gain value. Lenders provide borrowers with loans and they gain interest in return without being forced to interact with their borrowers directly.
Cryptocurrency assets are placed into a liquidity pool that is a series of smart contracts helping to match borrowers with available loans. The platform is entirely transparent as well as decentralised and users who have technical expertise are free to check the open-source code at any given time.
The network is a brilliant alternative to the traditional financial instrument platforms but the mechanics of each is unique. The COMP platform does not have identification verification, lower limits for lending, and there are no specific terms or penalties, borrowers pay back their loan whenever they want.
It also means that locked assets are withdrawable, and lenders receive interest in the form of rewards every 15 seconds or when a new Ethereum block is generated. The COMP coin supply is capped at 10,000,000, with 2,800 coins distributed daily amongst protocol users in proportion to the number of transactions which are completed with a specific coin.
Lenders and borrowers each obtain half and half, and once a user has earned 0,001 COMP, the reward is subsequently transferred to their account.
Maker (MKR)
Maker is a new player on the field, and it is not a well-known project. Maker is a cryptocurrency based on a smart contract platform that works in conjunction with other DAI coins that aim to act as currency hedges.
MKR also provides traders and investors with a stable alternative to most other coins that are currency circulating on the cryptocurrency market.
MKR offers a trusted, transparent stablecoin system that can be inspected by anyone on the Ethereum blockchain. Founded three years ago by Rune Christensen, MKR is used for payments, savings, or as collateralisation. MKR also provides crypto traders with a variety additional options when they open or close positions.
MKR is based entirely on the blockchain and the stability of the coin cannot be mediated by either the legal system or any other counterparty. In addition, the coin also helps in the facilitation of trading while simultaneously remining rooted in the digital asset world.
The concept involved with stablecoin is straightforward; it is a token that has a price and/or value which is pegged to a fiat currency, specifically the US Dollar. A stablecoin is a token which exists on a certain blockchain but does not necessarily possess volatility, unlike either Bitcoin or Ether.
In addition, MKR is also a utility token, governance token, and resource of recapitalisation of the Maker system. It has a volatile price as result of the unique mechanics that it is associated with and the role that it fulfils on the Maker platform.
Both MKR and DAI tokens are issued by the same organisation/community and they are imperative in keeping all processes efficient and decentralised, symbolising the crucial relationship between the two tokens.
MKR is not a coin that can be mined, it is a collateral-backed digital currency which is soft-pegged against the US dollar, with the MKR fluctuating in value, assisting in the overall process. There are four broad markets covered by the Maker platform, namely:
- Gambling
- Financial Markets
- International Trade
- Transparent Accounting Systems
ChainLink (LINK)
The ChainLink project is a unique and innovative project that is the first of its kind and represents an oracle service which is based on Ethereum. ChainLink makes use of the innovative and unique power of the development in blockchain solutions for conventional businesses and several enterprises.
ChainLink’s network offers reliable, tamper-proof inputs and outputs which are used in smart contracts present on any blockchain.
With conventional Ethereum blockchain, there is a missing bridge to real-world businesses and ChainLink works to address this by creating a link between the blockchain and their applications in the real world, ensuring that smart contracts are more connected.
Users of smart contracts can use oracles in the ChainLink network to fetch data from any API which is offline in addition to data pools and a wide range of other useful resources, which can subsequently be integrated into the ChainLink network and blockchain.
Oracles are simply programs that are used to retrieve as well as verify any external data retrieved by making use of data feeds, web APIs, and a plethora of other resources. These oracles accomplish a variety of tasks including, but not limited to:
- Obtaining real-time price data from stock exchanges.
- Retrieving payment information from electronic payment providers, and a variety of others.
To harness the power of these oracles, data sources are queried and probed for certain information and they are then linked to the blockchain. This allows for smart contracts to be created to work on this information which can then flow freely from the data feed.
LINK is the native token of ChainLink, and it is an ERC-20 token which has been developed on the Ethereum blockchain and platform.
LINK coins help to provide incentive for Node operators that operate on the network, with the demand and value thereof depending on the number of operators who operate on the off-chain architecture of the network.
LINK coins also get their value from the use cases associated with the network, meaning that the more work is performed on the network, the more valuable LINK coins will become. There are a total of 1 billion LINK coins, and it is not possible for more to be created beyond this number.
LINK coins can be exchanged on most major cryptocurrency trading platforms and exchanges such as Binance.
Dai (DAI)
DAI is based on the Ethereum blockchain and its price is kept stable through a system of smart contracts that execute themselves. DAI has a steady value against one US dollar in addition to DAI being the key to the MakerDAO system.
When there are loans processed on MakerDAO, DAI is created, and this is the currency that users borrow and subsequently pay back to lenders. Once DAI has been created, it can only function as a stable Ethereum token which can be used to pay for products and services. It can also be transferred easily between Ethereum wallets.
The smart contract system keeps DAI’s price in check by using algorithms on the MakerDAO system that automatically manage its prices so that one single person is not required to keep it steady.
If the system works as it was designed, one DAI will always be equal to one US dollar. To date, DAI’s price has remained stable over the past three years, with only small fluctuations observed in its one-dollar price peg.
Yearn.finance (YFI)
Yearn.finance was founded in 2025 by Andre Cronje and it is one of the most popular cryptocurrency projects to date. It is a decentralised finance platform that fulfils a series of functions that includes leveraged trading, liquidity aggregations, and it also serves as an automated market maker.
The project is still in its beta phase and its founder has warned that users use it at their own risk. Yearn.finance provides cryptocurrency traders with the opportunity to participate in yield farming where there is interaction with other DeFi protocols.
The farming concept resembles the planting of seeds, or coins, expecting that they will multiply over time. To harvest DeFi on the Yearn.finance platform, investors or traders must lock them in cryptocurrency through the placing of a bet.
Yearn.finance uses services including Aave, Compound, dYdX, a Fulcrum to optimise the process of lending coins. When users deposit cryptocurrency with Yearn.finance, they are subsequently converted into yTokens and rebalanced so that the most profitable lending services are selected.
YFI is the native coin of Yearn.finance and it is an asset that can only be distributed to offer liquidity to the platform when users use yTokens. This is done by placing bets and receiving interest and YFI aims to release the most decentralised digital assets that do not possess pre-mining presale, or by distributing it to the team.
When there are changes that must be made to the network or platform, they are done via online suggestions and voting, providing each YFI holder with a vote.
Band Protocol (BAND)
Band Protocol was founded in 2014 by Soravis Srinawakoon, who got involved in cryptocurrency in 2014 when he designed a cryptocurrency “gambling” website that served as a faucet to Bitcoin. The website rewarded users in Bitcoin when they wone casino-based games on the official website.
However, when the website reached its peak, Srinawakoon sold it and used the funds to start the development of a new project that would eventually grow to become the Band Protocol.
This protocol can be defined as a cross-chain data oracle which is a programme that aggregates and connects APIs along with real-world data to decentralised applications, including smart contracts, which exit on various cryptocurrency blockchain.
Cross-chain, as the name would suggest, means that Band Protocol can operate across multiple blockchains and that it is not only bound to Ethereum’s blockchain. This concept is one that is currently underexplored and developed in the digital currency world, which was the major selling-point for Band Project.
The Band Protocol blockchain is also known as BandChain with a native coin known as BAND, used for staking by validators and delegators, incentivising accurate and updated data feeds.
As soon as someone has requested data from the Band Protocol, a smart contract is subsequently submitted to the BandChain and it contains details of data that users want, and how they want it to be aggregated.
Validators are then selected based on a weighted average based on the respective stake that they have for the provision the data which has been requested. Data is then obtained from the relevant resources that have been specified by the smart contract.
The data is aggregated in the specified manner and stored on the BandChain. One advantage with this process is that, once requested, the data becomes freely available on the BandChain for anyone else who may require it.
BAND is available for trade and exchange on a variety of cryptocurrency exchanges such as Binance, Huobi, and Coinbase Pro.
Ren (REN)
Launched in 2017, the Ren project is one of the earlier DeFi projects which have ever been recorded. It was formerly known as a “republic protocol” and the project aims to address privacy, security, and the interoperability that exists in OTC by decentralising it.
Founded by Taiyang Zhang and Loong Wang, Ren serves the purpose of making the transfer between different blockchains easier, more transparent, and secure, even in private models. Ren is a secure network consisting of a variety of virtual computers.
RenVM powers interoperability for various decentralised applications which enables cross-chain lending, exchanges, collateralisation, and numerous others. REN is the project’s native coins which allows for node operators to receive incentive for matching orders.
It also pays bonds to the Registrar and allows traders and nodes to participate in the REN Dark Pool as well.
Bancor (BNT)
The Bancor Network is overseen by the Bancor Foundation, with the company having been founded in 2016 and named after the international trade balancing currency which was originally envisioned by John Maynard Keynes.
The Bancor Network is headquartered in Switzerland and it also has a research and development centre which is based in Tel Aviv, Israel. This provides the company with a foothold in Zug, which is the rising blockchain hub along with the rising technology centre which is based in Tel Aviv.
The Bancor Network was created to serve as an elegant solution, allowing its users to swap ERC-20 and EOS coins across a vast amount of 10,000 other coin pairs. This further allows users to convert between two tokens without having to use a counterparty to facilitate the trade.
This can be done from the Bancor wallet that allows for the Bancor network to offer traders with automatic liquidity on their trades. Another important feature of Bancor is that the network remains decentralised as most of its functionality is owed to the use of the native BNT coin in facilitating trades.
The Bancor network is especially known and remembered from holding one of the most successful ICOs that the world has ever seen along with a well-deserved world record which was set in 2017. This was done when Bancor raised more than $153 million in less than 3 hours.
Since its ICO, the Bancor Network has seen more than $1.5 billion coin conversions that has taken place on the platform, facilitated by BNT. In addition, Bancor also makes use of cross-chain conversion technology that allows users to convert without giving up their private keys in the process.
Traders are also offered with a wide range of conversion options and the benefit that there are no fees charged, trades are instantaneous, and available for Ethereum and EOS coins across more than 8,700-coin pairs by using the Bancor wallet.
Another advantage that both Bancor and BNT share is that they provide liquidity to cryptocurrency markets. In an absence of liquidity, most digital currencies are likely to wither and die as the purpose behind them is the quick purchase and sale for a profit.
The Bancor Protocol is a unique solution that offers automatic decentralised liquidity spread across most cryptocurrency assets, even those that are held privately, and they are not limited or held to size or trade volume.
Aave (LEND)
Aave is also known as ETHLend, with LEND as the native token for Aave after the winding-up operations associated with ETHLend in January 2025. LEND, or $LEND is also used for the reduction of fees and offering governing rights at a base-code level for future protocol updates.
LEND coins are burned from fees accrued from Aave’s protocol which suggests that LEND coins could increase in value in future. One of the most crucial features attributed to Aave is that it allows “Flash Loans” which allows users to borrow money without any collateral.
Aave can guarantee the safety of funds in liquidity pools as it reserves the right to reverse certain transactions, undoing all actions if the liquidity pool is not returned to certain parameters within a certain time limit.
In addition, Aave also includes a stable rate model that serves the goal to lower volatility in interest rates, which ensures that investors have extended protection. This model is ensured through rate switching, perpetual loans, and a nuanced tokenisation model.
Rate switching allows borrowers to switch between fixed or floating interest rates which is useful when there are volatile conditions in the decentralised market.
Ox (ZRX)
Ox is a popular open protocol that was founded in 2016 with the hopes that a world would exist in which representation of each asset as part of the Ethereum blockchain could be achieved. Ideally, according to this, assets which would be included would be anything from digital games to stocks, gold, and fiat currencies.
Ox was designed to offer a platform that is decentralised and which forms part of the Ethereum blockchain. Ox is made by using a protocol involving Ethereum smart contracts, allowing those around the globe to run a decentralised exchange efficiently.
Founded by Will Warren and Amir Bandeali, who are involved with smart contract research and development, Ox features a variety of team members that have different specialisations from blockchain technology, software development, graphic and product design, and several others.
Ox works to address inefficiencies that exist in decentralised cryptocurrency exchanges. It also aims to bridge the inability of various major exchanges to work together. In addition to the Ox protocol, an Ox OTC was also designed which is a consumer-facing product making use of the original protocol.
The Ox OTC allows peers to exchange Ethereum tokens without having to use a Relayer by providing its own. ZRX is the native coin of OX and these coins are used to pay trading fees for Relayers.
ZRX is a decentralised form of governance involved with the protocol upgrade system and ZRX owners have certain input in the protocol, proportionate to the amount owned by individual users.
ZRX has a limited supply of 1 billion and 50% of this was released during its launch in 2017. ZRX can be bought, sold, and/or exchanged on several reputable cryptocurrency trading platforms and exchanges such as Coinbase, Coinbase Pro, and others.
Types of DeFi categories
Stablecoins
These are multi-assets which are collateralised for the issuing of a pegged token.
Borrowing/Lending
Which involves cryptocurrencies which are borrow or lent against a specific token.
Position Exchange
Which involves tokens representing a share in a decentralised exchange swap profit and/or the governance of power.
Derivatives
Which involves price tracking of tokens that represent a specific asset.
Fund Management
Which is associated with tokens that are used for active and/or passive fund management protocol services.
Lottery
Which involves tokens that represent claims on time-dependent draws.
Payments
Which are tokens that are used specifically for merchant trading and other payment services.
Insurance
Which makes use of tokens that represent claims for insurance.
| PROS | CONS |
| Decentralised | Smart contracts are not always enough to ensure decentralisation and malicious developers can use the blockchain to create fraudulent projects |
| There are numerous current and upcoming DeFi projects that are worth investing in | There are DeFi projects that are not audited thoroughly |
| DEX allows anyone to freely trade tokens | Investors may invest in assets with which they are not entirely familiar |
| Level of anonymity associated with DeFi and DEX smart contracts | Anonymous profiles may be hiding criminals |
| There is immense potential in DeFi | There are still many risks to consider with any type of trading and investing |
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FAQ
When was the term Defi first coined?
DeFi short for decentralized finance was first coined on Telegram in a chat in August 2018 between entrepreneurs and Ethereum developers which included Blake Henderson of 0x, Brendan Forster of Dharma and Inje Yeo of Set Protocol.
Where does DeFi get its inspiration from?
DeFi draws inspiration from blockchain which is the technology behind the Bitcoin digital currency.
Is Defi controlled by a single source?
No DeFi allows several entities to hold a copies of history transactions, meaning so it isn’t controlled by a single central source.
What was DeFi called before it became a common term?
Before it was commonly known as DeFi which stands for decentralized finance, it was often called open finance.
What are most DeFi applications built on?
Most DeFi applications are built on top of Ethereum, which sets itself apart from the Bitcoin platform as it’s easier to build other types of decentralized applications beyond simple transactions when using Ethereum instead of Bitcoin.
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