Best DeFi Tokens to Watch In 2022

By Spencer Hulse Spencer Hulse has been verified by Muck Rack's editorial team
Published on March 25, 2022

Cryptocurrency and blockchain technology are massive now, so it can be a bit difficult to navigate the space. However, there are a lot of fantastic opportunities out there, especially when it comes to DeFi tokens. They are used to power decentralized finance (DeFi) protocols, and their popularity speaks for itself.

While many DeFi tokens share similar purposes, it is important to do your research if one catches your interest. After all, the protocols involved can be complex, and you need to know what you are getting. For now, keep reading to learn about the best DeFi token in 2022.

What Is a DeFi Token?

DeFi tokens act as a foundation for decentralized projects. While they might seem like another type of cryptocurrency, they are limited to decentralized platforms. They also have a more complex role in many cases. DeFi tokens are not just a type of coin. In fact, they often have various use cases, such as governance rights.

DeFi tokens are also non-fungible assets unique to DeFi platforms and serve many functions. It is the opposite of coins, which are value-based. You can even consider them as financial tools, which might just be the future of finance.

The Best DeFi Tokens

There are many reasons to consider buying certain DeFi tokens. There is market capitalization, growth potential, past performance, and the organization’s objectives. Each of the tokens on this list stands out for one reason or another, whether it be potential or current standing in the DeFi market.

Lucky Block (LBLOCK)

Lucky Block only popped up in 2021, but it is already growing rapidly. The purpose of the platform is to provide a lottery gaming platform that is completely decentralized. That is what makes it stand out, in the sense that it does not rely on any government or fiat currency. Instead, it is all dependent on DeFi and a smart contract.

Because of the way it is set up, Lucky Block is free from manipulation, making any games of chance truly fair. Moreover, the token is on the Binance Smart Chain, a solid blockchain that can reach people worldwide. It makes this a global lottery, so the stakes might very well become massive in time.

But why is it potentially worth investing in? Well, if the allure of DeFi games of chance is not enough, stats make it obvious. Since it started, the token has increased in value tremendously, reaching a high of $0.009061. While the price has decreased since then, it is expected to continue growing in the days to come.

The Lucky Block DeFi token is available on PancakeSwap, so head over there if you are interested. To learn more about the token, check out their website. After all, there is a lot to read up on, including the fact that Lucky Block provides instant payouts and provides token holders with a percent of every jackpot, regardless of whether they play.

Aave (AAVE)

To understand why AAVE is worth purchasing as a DeFi token, it is important to know what it represents. Aave is a protocol that deals with decentralized lending. It is open-source and non-custodial, and it allows users to deposit crypto assets for APY rewards. Moreover, once deposited, it allows people to use their crypto assets to:

  • Borrow
  • Lend
  • Earn

The protocol is massively popular, and the AAVE token is a governance token. It gives holders control, allowing them some say in the future direction of the protocol as a whole. Governance tokens can be incredibly valuable assets, and in AAVE’s case, they can even be staked for rewards.

The AAVE token is a native token, and it comes with some benefits as far as the protocol is concerned. While the token has fallen drastically since its high of $629.17, the price is currently sitting at more than $100. Where that will go in the future is uncertain, but it is worth paying attention to.

Uniswap (UNI)

Uniswap is a real representation of DeFi because it allows users to exchange tokens peer-to-peer. While it might not sound like much, most of the trading done still has a centralized party involved. That includes popular crypto exchanges such as Binance and Coinbase.

The problem with centralized platforms is that they earn commissions that add up to a lot. Uniswap does things a bit differently, and it has been doing it for quite a while. In fact, it was one of the first DeFi apps to succeed on Ethereum. And it remains popular today. In fact, last year, it processed more than $10 billion in weekly trading.

Users can also become part of the liquidity pool to earn rewards. However, where the UNI token comes into play is governance. As a governance token, UNI allows holders to have a say in protocol changes. Considering how popular the platform is, that is nice to have.

While the current Uniswap token is worth around $8.50, the high reached $43.22 in 2021. Even if it does not attain similar highs in the future, it is one that is worth considering as far as DeFi tokens go.

Yearn.finance (YFI)

Yearn.finance is interesting in many ways, starting with its purpose. The main goal is to simplify aspects of DeFi, which can be quite complicated. As a whole, it makes it easier to move funds into DeFi projects, essentially bridging the gap between borrowers and lenders. While it is not a unique existence, it is a powerful tool.

Everything is kept simple with Yearn.finance, with the portal accommodating users of all skill levels. Moreover, the process is automatic, working to achieve the highest possible returns. It even helps investors decide where to put their money to get the most out of it. And all of it works through reliable smart contracts.

If you want to invest in Yearn.finance, it is possible to do so through YFI tokens. They are governance tokens, so holders can vote on protocols and the operational model. However, YFI tokens are incredibly uncommon, rarely being distributed. So, while you can buy and sell those in circulation, there are only so many available.

In 2021, YFI tokens reached a high of $82,979. Like most other crypto assets, the price has cooled since then, but it is currently sitting around $18,000. If you are looking for a good time to invest in an exciting DeFi token, this might be it. After all, Yearn.finance provides a valuable service, and crypto is here to stay.

Fantom (FTM)

Fantom is a highly successful smart contracts platform for digital assets and dApps. Its primary concern is providing users with a fast, secure, and scalable protocol that makes life easier. In fact, transactions using Fantom are nearly instant, only needing around a second to finalize. They also barely cost anything. Other benefits of the protocol include:

  • Validator nodes that keep everything incredibly secure
  • The ability to process thousands of instant transactions per second
  • EVM compatible, allowing Ethereum dApps to run on Fantom

The ecosystem is already growing, and part of that is thanks to the platform being open-source and developer-friendly. That is why the FTM token is so valuable, because this project has the potential to grow into something much larger. If it grows, getting in now brings a lot of benefits.

Aside from future profits, there are other reasons to get the FTM token. FTM tokens do a lot of things, such as securing the Fantom network via the Proof-of-Stake system. They are also ideal for sending and receiving payments because of the quick and cheap network. But the biggest part is the governance rights for voting.

There is a total supply of 3.175 billion FTM. However, only a bit over 2 billion is in circulation. The rest are reserved for staking rewards. That means there are a finite number of rewards, which could be completely distributed in a few years. It is another reason to get in early, especially if the coin returns to its high of $3.3114.

Terra (LUNA)

When it comes to DeFi projects, few hold a candle to Terra in terms of market cap. The project is a public blockchain protocol that utilizes algorithmic decentralized stablecoins that fosters a thriving ecosystem. What does that mean? Well, the coins track fiat currencies, and it includes a full range of national currencies, including:

  • The US Dollar
  • The Euro
  • The Korean Won
  • The Japanese Yen
  • The Chinese Yuan

Terra is unique in that sense, with many stablecoins only focusing on a few fiat currencies. It even supports the Special Drawing Rights (SDR), which is backed by the International Monetary Fund.

The LUNA token absorbs the price volatility of the entire process, which allows holders to speculate on the price. The tokens can also give benefits through yield farming and staking. However, the growth of the coin and its stability are the real reason to take a look at Terra and the LUNA tokens.

Many entities in the cryptocurrency market have seen dips entering into 2022. In fact, some have dropped so severely it is shocking. Terra is not among those coins, though. It has even seen growth.

SushiSwap (SUSHI)

SushiSwap and the previously featured Uniswap have some history. That is because SushiSwap was originally forked from Uniswap, so there are some similarities. It is a decentralized exchange platform that uses smart contracts to provide a liquidity pool. With that, users can trade crypto assets peer-to-peer.

In the same way as Uniswap, SushiSwap cuts out the intermediary. It can be a benefit not to have a centralized platform involved, but it does mean that it cannot trade crypto for fiat currency or vice versa. But there are benefits, including the ability to stake tokens and become liquidity pool providers to earn rewards.

The staking is simple, giving token holders governance rights and 0.05% of all swaps from all chains based on their share. The liquidity pool also offers rewards to those who put in an equal value pair of two cryptocurrencies. Of course, while these benefits are nice, these types of apps do have risks. So, make sure to research thoroughly.

In early 2021, the Sushi traded for around $22.78, but it has since dropped down to around $3. While it is a major change from the previous year, it is a powerful platform with $2 billion in total liquidity. It is definitely a DeFi token to watch in 2022.

Chainlink (LINK)

Chainlink’s decentralized oracle networks are considered by many to be the industry standard. They enable smart contracts to access real-world data and off-chain computation. Moreover, it does that without diminishing the security and reliability people expect from blockchain technology.

There are many reasons Chainlink is successful. Inherent security is part of it, but Chainlink’s flexible infrastructure also plays a role. Among other things, it easily connects to APIs and includes many ready-made solutions.

It is also important to note that there was no way for smart contracts and DeFi apps to access external market prices before Chainlink. Therefore, it is no surprise that Chainlink has a solid footing in the industry.

As for the LINK token, it is used to pay for services on the network. It also incentivizes nodes for accurate data since holders must stake LINK tokens into smart contracts to become a node. While Chainlink is nowhere near its 2021 high of $52.37, it is a great choice for those interested in DeFi tokens.

Maker (MKR)

MakerDAO is an organization on the Ethereum blockchain. It runs a DeFi platform that, like many others, allows for the lending and borrowing of crypto assets. However, it does it in a unique way, which involves utilizing two crypto assets, MKR and DAI, which are somewhat reliant on one another.

MKR is a governance token that gives holders the ability to have a say in the Maker protocol, which involves various things. One of the most important is the policy for the Dai stablecoin. Of course, there is more to it, such as choosing collateral types and speaking about the governance process itself, but Dai is the key.

Dai is pegged to the US dollar, and the MKR token helps with that. By utilizing MKR and DAI, some volatility is prevented. Of course, that has not made Maker immune to the ups and downs of the crypto market, but it does sit in a pretty good position. Time will tell whether it has a chance to return to its high of $5,990 on the market.

The Graph (GRT)

The Graph is another interesting DeFi project that is worth paying attention to solely for what it offers. The protocol is used for indexing and querying blockchain data. Considering the growth of blockchain technology and its firm place in future development, The Graph will always be useful.

When it comes to the GRT token, it is all about gathering data. The Ethereum token fuels the company’s ecosystem by paying people who provide data or verify pre-existing data. The tokens are also staked, which then allows holders to process queries and more, earning APY rewards in the process.

There is a lot of technical knowledge required to effectively index things. However, that does not mean you cannot be involved otherwise. GRT can be delegated, meaning you can be a part of an indexer’s process and earn some rewards along with them.

Once the data is collected and verified, it is made available in APIs. It is even grouped into subgraphs that are easy to access and utilize. Those who use the information include DEX applications. GRT once reached a high of $2.3409, but it now sits at around $0.34.

Final Thoughts

DeFi tokens still exist in a risky space. However, while the market is definitely volatile, it offers a lot of potential gains. Some of the companies have fantastic visions and applications that will only grow as blockchain technology continues to spread. Therefore, investing in DeFi, especially governance tokens, is valuable.

By Spencer Hulse Spencer Hulse has been verified by Muck Rack's editorial team

Spencer Hulse is the Editorial Director at Grit Daily. He is responsible for overseeing other editors and writers, day-to-day operations, and covering breaking news.

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