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15 Best DeFi Crypto Projects to look into in 2021 and Their Tokenomics

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Marketing Specialist

Last updated June 25, 2021

Estimated Reading Time:
18 minutes, 9 seconds

Most people thought that DeFis met their peak in October 2020. Yet, the crypto bull run revitalized the initiative, and the race for the best DeFi crypto project has even more potential winners.

However, the summer of 2021 starts for cryptocurrency with signs of a bear market. Yet, the DeFi projects are coming to fill the gaps with new capabilities, improved tokenomics, earning opportunities to help the hodlers hodl and the traders trade. 

And although there are hundreds of projects going on, we will showcase 15 you should really keep an eye on.

What is DeFi?

What is DeFi

DeFi, short for Decentralized Finance, refers to a crypto sector that works to bring most of the traditional finance’s capabilities inside the cryptocurrency space. It does that by disassembling the various financial services and decentralizing them.

DeFi projects usually denominate dapps and infrastructure such as asset management tools, decentralized exchanges (DEX), DeFi infrastructure & Dev Tooling, and many others.

Although they are risky to invest in and use right now, the more time passes, the more they optimize and come out with better tokenomics.

15 Best DeFi Crypto Projects

15 Best DeFi

Many dapps in the crypto space need oracles to interact with different kinds of data. And the current leader in oracles is Chainlink.

Chainlink offers a decentralized data set through a series of oracles and smart contracts, providing a middle ground between real-world data and blockchain applications.

Since 2019, Chainlink grew exponentially, providing over 75 price feeds to 300 smart contracts and decentralized applications. 

It’s important to notice that Chainlink as a project was developed and evolved to the point that it’s giving grants to crypto initiatives deemed useful to the ecosystem.

In the DeFi space, Chainlink makes a significant impact by facilitating other projects with oracles to ensure their functionality. 

A few examples of notable projects using Chainlink oracles are Synthetic, AAVE, KyberSwap.

Supply

  • Max Supply: 1,000,000,000 LINK
  • Total Supply: 1,000,000,000 LINK
  • Circulating Supply: 432,509,554 LINK

Market Cap

The LINK token has a market cap of around $7.9 billion (at the time of writing).

Allocation & Distribution

LINK tokens are pre-minted. Therefore, the Max Supply is the same as the total supply.

According to Etherscan, the total supply of LINK is distributed as follows: 

  • 35% locked in smart contracts
  • 41% In circulation
  • 24% allocated to node operators

Vesting & Inflation

It appears there is no vesting or lock-up schedule for LINK. 

Yet by checking the historical data on CoinMarketCap with WayBackMachine, it seems that Chainlink increases the circulating supply by 4-5% every year.

Utility

The LINK token has quite a few use cases, such as: 

  • in smart contracts
  • fees network 
  • staking

2. SYNTHETIX (SNX)

Synthetix is one of the most hyped and fast-growing DeFis out there. It is a decentralized asset insurance protocol built on Ethereum. 

Synthetix allows users to mint synthetic representations of real-world assets as tokens that peg the value of the asset they are based on.

The synthetic assets maintain their peg through the principle of no-arbitrage (that allows stakers to burn additional synths) and the open market liquidity for synths on other decentralized exchanges.

Supply

  • Max Supply: 219,252,220 SNX
  • Total Supply: 215,258,834 SNX
  • Circulating Supply: 114,841,533 SNX

Market Cap

The SNX token has a market cap of around $753 million (at the time of writing).

Allocation & Distribution

The SNX tokens are pre-minted, and according to Binance Research, the total supply of SNX will be distributed as follows:

  • 0.87% Pre-Sale
  • 19.20% Private Sale
  • 3.05% Public Sale 
  • 18.49% Team 
  • 0.77% Advisors 
  • 4.62% Foundation 
  • 1.93% Partnership Incentives 
  • 1.16% Bounties/Airdrops 
  • 49.92% Staking

Vesting & Inflation

The Synthetix token’s inflationary money supply schedule was introduced in March 2019 and showed a weekly 1.25 inflation rate decrease:

Period of time Increase in SNX Supply Total SNX Supply after inflation SNX inflation rate
2018. 0 100,000,000 0%
2019 75,000,000 175,000,000 75%
2020 37,500,000 212,500,000 21%
2021 18,750,000 231,250,000 9%
2022 9,375,000 240,625,000 4%
2023 4,687,500 245,312,500 2%

Utility

The SNX’ use cases are as follows:

  • Primary use is staking and collateralizing synthetic assets
  • Yield Farming
  • Trading Fees
  • Governance

3. DODO (DODO)

Dodo is an on-chain liquidity provider that offers stability through a proactive market maker. The project was first developed on Ethereum as an ERC20 smart contract and expanded on the Binance Smart Chain.

Dodo offers more than a cute name and design by managing to provide sufficient liquidity comparable to some of the best centralized exchanges (CEX), making it usable by smart contracts for on-chain transactions such as liquidation and auctions.

Supply

  • Max Supply: 1,000,000,000 DODO
  • Total Supply: 1,000,000,000 DODO
  • Circulating Supply: 110,551,965 DODO

Market Cap

The DODO token has a market cap of $99 million (at the time of writing).

Allocation & Distribution

The DODO tokens are pre-minted, and according to Binance Research, the total supply will be distributed as follows:

  • 6% Seed Sale
  • 10% Private Sale
  • 15% Team & Advisors
  • 8% Operations & Marketing
  • 1% IDO Liquidity
  • 60% Reserved for the community

Vesting & Inflation

As for the DODO tokens’ release schedule, the circulating supply is meant to increase gradually to up to 100% of the total supply until the end of 2025.

  • At the end of 2021, the Circulating Supply will reach 40% of the Total Supply.
  • At the end of 2022, the Circulating Supply will reach 60% of the Total Supply.
  • At the end of 2023, the Circulating Supply will reach 80% of the Total Supply.
  • At the end of 2024, the Circulating Supply will reach 90% of the Total Supply.
  • At the end of 2025, the Circulating Supply will reach 100% of the Total Supply.

Utility

The DODO’s use cases are as follows:

  • Governance
  • Crowdpooling & IDO Allocation
  • Staking
  • Trading Fee Discounts
  • Minting vDODO

4. PANCAKESWAP (SWAP)

PancakeSwap is an Automated Market Maker Decentralized Exchange made on the Binance Smart Chain that requires no KYC. The project received fundings from Binance as a part of the company’s DeFi acceleration program on the Binance Smart Chain. 

In essence, PancakeSwap is a clone of UniSwap but also comes with a few new features: 

  • Two built-in yield farming tools in which you can stake liquidity provider tokens and earn cake or stake cake to earn more cake or other BEP20 tokens
  • Lottery tickets
  • An auction market for various NFTs
  • An initial farm offering
  • Gamification through the use of community teams, leaderboards, various tasks, and achievements 

Supply

  • Max Supply: No Limit
  • Total Supply: 185,651,569 CAKE
  • Circulating Supply: 185,651,569 CAKE

Market Cap

The CAKE token has a market cap of $2.5 billion (at the time of writing).

Allocation & Distribution

The BEP20 CAKE token is pre-minted, and according to BscScan, the distribution goes as follows:

  • 38.35% locked in the main staking contract
  • 38.41% wallet used for burning tokens
  • 23.24% allocated to various smart contracts and holders

Vesting & Inflation

CAKE has no max supply cap, and it functions with an inflation of 750,000 CAKE every day, even after the burning mechanisms are considered. However, the newly emitted tokens are distributed to Yield farmers (60%) and Syrup Pools (40%).

In terms of tokenomics, CAKE may seem to have disastrous inflation. However, the developers want the token to be deflationary, so they always work on the burning parameters.

Utility

The primary use of the CAKE token is staking. In addition, the token is also used for:

  • Crowdpooling
  • NFTs Auctions
  • Participation in various features of the PANCAKESWAP environment.

5. REN (REN)

REN is a decentralized interoperability protocol that wants to allow crypto users to transfer any token between any blockchain. The cross-chain value transfer solution does not create synthetic tokens or wrapped tokens but transfers liquidity from one ecosystem to another with existing smart contracts.

The concept of renBTC is similar to wBTC. The difference comes in the fact that unlike wBTC, the Bitcoin is kept on a network of decentralized nodes called the Dark Nodes and is governed by code in Ren’s case.

And because the REN protocol operates just like a machine, users can make as many requests as they want, when they want.

The Ren Virtual Machine can be integrated into many DeFis to provide them with liquidity and does not require KYC.

Ren VM’s impact is significant in the case of hodlers, allowing people holding Bitcoin to supply their funds to lending protocols and earn interest rather than keeping them idle.

Nodes earn fees in the cryptocurrency exchanged through the RenVM.

Those who want to operate a node need to acquire 100,000 REN to be able to do so.

Supply

  • Max Supply: 1,000,000,000 REN
  • Total Supply: 999,999,633 REN
  • Circulating Supply: 997,163,051 REN

Market Cap

The REN token has a market cap of around $339 million (at the time of writing).

Allocation & Distribution

Ren was pre-minted as an ERC20 token, and according to Binance Research, it is distributed as follows:

  • 18.67% Bonded in the Dark nodes
  • 19.9% Reserve funds
  • 10% partnerships, development, and other related activities.
  • 56.6% investors and lending pools.
  • 13.5% other holders

Vesting & Inflation

Almost all Ren tokens are circulating, but the tokens used to bond are taken off the market. And as demand for operating nodes increases, more tokens will be bonded.

Utility

The primary use case is as a Bond to operate a dark node.

6. UNISWAP (UNI)

Uniswap is mainly known as the current leader in the cryptocurrency decentralized exchange space. It is a decentralized exchange built on the Ethereum network, founded in 2017 by Hayden Adams. 

The trading protocol was built to be an on-chain automated market maker (AMM) that can determine the price of a cryptocurrency based on the ratio of two cryptocurrencies within a pool. 

Uniswap allows for the exchange and trade of various DeFi tokens, as well as Liquidity Provider tokens. And even if you don’t find an ERC20 token in the list, you can still create a pair and swap it for another crypto if you find the smart contract’s address.

And besides swapping, users can also provide liquidity in existing pools or create new pools to provide for.

Supply

  • Max Supply: 1,000,000,000 UNI
  • Total Supply: 100,000,000 UNI
  • Circulating Supply: 575,202,575 UNI

Market Cap

The UNI token has a market cap of around $9.8 billion (at the time of writing).

Allocation & Distribution

The UNI tokens had been pre-minted at genesis  as ERC20 tokens. And according to Uniswap, the token is allocated as follows: 

  • 60% to the Uniswap community
  • 21.266% to team members and future employees
  • 18.044% to investors
  • 0.69% to advisors

Vesting & Inflation

Until 2024, UNI has a vesting period of 4 years for the 40% allocated to the team, employees, investors, and advisors. After that, UNI will function with a perpetual inflation rate of 2%.

Utility

The UNI token’s use cases are:

  • On-chain governance
  • Staking in pools
  • Reward for staking in pools

7. MAKER (MKR)

Maker is an ample project comprising the decentralized organization MakerDAO and software platform Maker Protokol that allows users to issue and manage DAI.

The project is based on the Ethereum blockchain, so the decentralized organization and the software platform are governed with the ERC20 token, MKR.

Within the ecosystem, MKR works primarily as voting rights.

And in the DeFi context, Maker is one of the first projects to try building decentralized financial products on top of smart-contract-enabled blockchains.

Aside from being one of the first, MKR is unique for allowing holders to directly participate in DAI governance. 

All MKR holders can vote on a number of changes to the Maker Protocol, with their voting power depending on the number staked Maker tokens.

Supply

  • Max Supply: 1,005,577 MKR
  • Total Supply: 994,654 MKR
  • Circulating Supply: 991,423 MKR

Market Cap

The MKR token has a market cap of around $2.1 billion (at the time of writing).

Allocation & Distribution

The MKR tokens are pre-minted, and according to Etherscan, the total supply is distributed as follows:

  • 21.35% Maker: Governance Contract
  • 8.42% Maker: MCD Pause Proxy
  • 55% Liquidity providers, exchanges, and investors
  • 15.23% Other accounts

Vesting & Inflation

MKR is hard capped at 1,005,577. Therefore, the number of tokens won’t increase above that level. And aside the locked tokens, the Maker system employs a buyback-and-burn system that balances the price and tokens in circulation.

Utility

The MKR token’s use cases are:

  • Governance
  • Paying Fees
  • Staking
  • Recapitalization system

8. FANTOM (FTM)

Fantom aims to become a DAG-based smart-contract platform using aBFT principles to achieve consensus. The platform will enable smart contracts in a directed acyclic graph-based system by using the Lanchesis protocol. 

And by using asynchronous Byzantine Fault Tolerance principles in the consensus mechanism, nodes do not need to be aware of the existence of all other nodes in the network when joining the network. This means that the network’s performance and scalability are highly improved.

What is unique about Fantom regarding the DeFi ecosystem is its unique consensus mechanism to facilitate DeFi and related services through smart contracts.

The Lanchesis mechanism is bound to offer two-second transaction finalization along with a more secure proof-of-stake algorithm.

Supply

  • Max Supply: 3,175,000,000 FTM
  • Total Supply: 2,545,006,273 FTM
  • Circulating Supply: 2,545,006,273 FTM

Market Cap

The FTM token has a market cap of around $620 million (at the time of writing).

Allocation & Distribution

The FTM token is pre-minted and, according to Binance Research, is distributed as follows:

  • 3.15% Seed Sale
  • 37.04% Private Token Sale
  • 1.57% Public Sale
  • 7.49% Team
  • 12% Advisors
  • 6% Token Reserve
  • 32.75% Block rewards

Vesting & Inflation

The release schedule for the FTM tokens show a steady 1.1% monthly increase in the circulating supply until August 2023.

Utility

The FTM token’s use cases are:

  • Staking
  • Paying network fees
  • Granting user rewards

9. POLKASTARTER (POLS)

Polkastarter is a cross-chain protocol for pools and auctions that enable projects to raise capital in an environment based on Polkadot.

The most important thing to know about what makes Polkastarter promising is the ability to make both fixed swap pools and cross-chain swaps through the Polkadot ecosystem. This provides higher throughput and cheaper transactions while maintaining a connection with the Ethereum Network and other blockchains to keep liquidity flowing.

Supply

  • Max Supply: UNKNOWN
  • Total Supply: 100,000,000 POLS
  • Circulating Supply: 70,133,982 POLS

Market Cap

The POLS token has a market cap of around $71 million (at the time of writing).

Allocation & Distribution

According to Polkastarter’s documentation, the token is distributed as follows:

  • 10% Foundational reserve
  • 15% Seed Sale
  • 10% Team & Advisors
  • 27.5% Private sale
  • 15% Marketing Fund
  • 22.5% Liquidity Fund

Vesting & Inflation

After listing, the token supply will be unlocked with around 7% per month for 24 months.

Utility

The POLS token’s use cases are:

  • Governance
  • Transaction Fees
  • Staking
  • Liquidity mining

10. UMA (UMA)

UMA (Universal Market Access) is a protocol for creating synthetic derivatives with trustless contracts on anything that has a price.

The protocol allows two counterparts to make a trade by structuring a trustless smart contract, eliminating the need for a broker, clearinghouse, or exchange. The self-enforcing smart contract automatically adjusts each side’s margin and makes sure that the trades are always collateralized.

Also, UMA is making itself remarkable by reducing the use of off-chain oracle price feeds to eliminate the risk of oracle manipulation seen in many DeFi protocols.

Supply

  • Max Supply: 101,172,570 UMA
  • Total Supply: 102,816,269 UMA
  • Circulating Supply: 60,883,617 UMA

Market Cap

The UMA token has a market cap of around $537 million (at the time of writing).

Allocation & Distribution

UMA tokens will be distributed as follows: 

  • 2% Initial Uniswap Listing
  • 14.5% Future Token Sales
  • 35% Developers and Users
  • 48.5% Founders, Early Contributors, and Investors

Vesting & Inflation

Although there is no unlocking schedule for the UMA token, we know that in terms of tokenomics, it has an inflation of 0.05% that increases the supply each time a vote is held. However, the platform also burns tokens to prevent profits from oracle corruption.

Utility

In terms of utility, the UMA token has the following:

  • Governing the UMA ecosystem
  • Disputes
  • Fees

11. 1INCH (1INCH)

1Inch is one of the fastest-growing decentralized exchange aggregators that connects various DEXes into one platform. 1Inch allows users to swap tokens across all integrated platforms efficiently.

The 1Inch ecosystem is governed through the 1INCH token.

Although it is an ERC20 token at the base, 1inch is non-custodial; therefore, all trades take place within one transaction from a user’s wallet that connects to a supported network. Nowadays, 1Inch’s protocol integrates with Ethereum, Uniswap, Kyber Network, Oasis, 0x Relays.

Supply

  • Max Supply: UNKNOWN
  • Total Supply: 1,500,000,000 1INCH
  • Circulating Supply: 172,778,256.50 1INCH

Market Cap

The 1INCH token has a market cap of around $451 Million (at the time of writing).

Allocation & Distribution

The Inch tokens are pre-minted, and according to Binance Research, the total supply is allocated as follows:

  • 53.3% Core Backers and Contributors
  • 30% Community Incentives
  • 14.4% Protocol Growth and Development
  • 2.3% Advisors

Vesting & Inflation

6% of the 1INCH total token supply was released at the end of 2020 via airdrop to cryptocurrency wallets that have interacted with it. Following the airdrop, 0.5% more tokens were released over two weeks through the liquidity mining program. And the rest is to be released over the next 4 years.

Utility

The 1INCH token’s use cases are:

  • Instant Governance
  • Staking

12. AVALANCHE (AVAX)

Avalanche is an interoperable smart contracts platform for launching decentralized finance applications, financial assets, and other services. The platform supports the Ethereum virtual machine as well as application-specific sharding, network-level programmability, and NFTs.

Avalanche uses a proof-of-stake consensus protocol to offer a network where decentralized assets are traded and launched by users with sub-second transaction confirmations.

Supply

  • Max Supply: 720,000,000 AVAX
  • Total Supply: 385,922,102 AVAX
  • Circulating Supply: 172,418,164 AVAX

Market Cap

The AVAX token has a market cap of around $1.9 million (at the time of writing).

Allocation & Distribution

The 720M token supply is distributed as follows:

  • 50% Staking rewards
  • 9.26% Foundation
  • 10% Public sale
  • 3.46% Private Sale
  • 2.5% Seed Sale
  • 7% Community & Developer Endowment
  • 5% Strategic Partners
  • 10% Team
  • 2.5% Airdrop
  • 0.28% Testnet Incentive Program

Vesting & Inflation

Initially, AVAX had a vesting period of 1 year for the Seed Sale and Private Sale and Public Sale tokens. But nowadays, the tokens are being released at a yearly minting rate of 7-12% as staking rewards.

And to balance the supply coming into the market, AVAX employs a burning mechanism that takes out the fees paid on the network.

Utility

The AVAX token’s use cases are:

  • Incentive for securing the network 
  • Paying Fees
  • Staking
  • Base unit of account between multiple blockchains deployed on Avalanche

13. WRAPPED BITCOIN (WBTC)

WBTC is the tokenized version of Bitcoin that runs on the Ethereum network as an ERC20 token and is governess through a DAO.

By wrapping their Bitcoins, BTC holders can interact with dapps within the Ethereum environment and use DeFi services as they like.

The Wrapped Bitcoin will always maintain the same value as the Bitcoin as they are pegged 1:1.

The Bitcoins are exchanged for Wrapped Bitcoin at a merchant (Ren and Kyber Network) and are kept safe by a custodian (BitGo) until the WBTC is redeemed.

Every time a Bitcoin is deposited, a wrapped Bitcoin is minted, and every time a BTC is claimed back, a WBTC is burned.

Supply

  • Max Supply: NO MAX SUPPLY
  • Total Supply: 191,025 WBTC
  • Circulating Supply: 191,025  WBTC

Market Cap

The WBTC token is minted on a market cap of around $6.5billion (at the time of writing).

Allocation & Distribution

The WBTC tokens are minted on demand, and by looking on Etherscan, most tokens are held by Ethereum-compatible services providers. However, the token supply and allocation are dynamic as the demand evolves.

Vesting & Inflation

The WBTC token doesn’t have any type of scheduled vesting or inflation. The price is always close to BTC’s level, and every redeemed WBTC is burned to keep the 1:1 pegging.

Utility

The WBTC token’s use cases are:

  • Interact with Ethereum dapps and DeFi projects
  • Providing liquidity to various protocol
  • Collateral in DeFi ecosystems

14. DAI (DAI)

DAI is an Ethereum based stablecoin launched and governed through the Maker Platform and MakerDAO.

The main difference between DAI and the other popular stablecoins is that DAI is fully decentralized and is integrated by hundreds of dapps and DeFi projects.

The DAI stablecoin used to be collateralized only with Ethereum but nowadays is multi collateralized.

Most decentralized coins did not perform well. However, DAI has grown in popularity and use by keeping a steady price close to 1 USD. Also, the Decentralized Autonomous Organization is keeping the stablecoin overcollateralized to ensure the pegging remains stable.

The minting process is not managed by a centralized organization, as anyone storing a collateral can mint DAI tokens.

Supply

  • Max Supply: NO MAX SUPPLY
  • Total Supply: 5,192,006,295 DAI
  • Circulating Supply: 5,192,006,295 DAI

Market Cap

The DAI token has a market cap of around $5.2 billion (at the time of writing).

Allocation & Distribution

DAI tokens are minted by users that store in the collateral. That causes the supply and allocation to be dynamic, just like in WBTC’s case.

Vesting & Inflation

The DAI token doesn’t have any type of scheduled vesting or inflation. The price is always close to 1 USD, and they are minted and burned as the market evolves.

Utility

The DAI token’s use cases are:

  • Interact with Ethereum dapps and DeFi projects
  • Providing liquidity to various protocol
  • Collateral in DeFi ecosystems

15. THORCHAIN (RUNE)

Thorchain is a decentralized liquidity protocol that allows swapping cryptocurrency between blockchains instantly.

It has been built by an anonymous team of developers and comes with excellent transparency and decentralization.

Thorchain’s token is called rune. Although it exists natively on its own blockchain, it is available as an ERC20 token on Ethereum and BEP20 token on Binance Smart Chain and other permissionless blockchain networks.

The platform is not profit-oriented; therefore, all fees go directly to users.

Supply

  • Max Supply: 500,000,000 RUNE
  • Total Supply: 461,668,422 RUNE
  • Circulating Supply: 233,836,800 RUNE

Market Cap

The RUNE token has a market cap of around $1.4 billion (at the time of writing).

Allocation & Distribution

The RUNE tokens are pre-minted, and the total supply is allocated as follows:

  • 44% Service nodes & liquidity incentives
  • 13% Operational reserves
  • 12% Community reserves
  • 10% Team & Advisors
  • 6% Seed investors
  • 14% Presale Investors
  • 1% Initial DEX Offering

Vesting & Inflation

When it comes to vesting and inflation, 25% of the RUNE token is scheduled to vest monthly approximately over the next three years, and 22.2% of the total supply will be locked until the mainnet is achieved.

The 44% allocated to Service nodes & liquidity incentives will be released gradually as validator rewards and liquidity pool provisioning incentives.

Utility

The RUNE token’s use cases are:

  • Bootstrapping new chains to thorchains
  • Paying Fees
  • Staking

Final Thoughts

In 2021, we see dozens of projects with amazing tokenomics and capabilities that revolutionize the Crypto space once again. 

We’ve chosen these projects as the 15 Best DeFi Crypto Projects to showcase the capabilities that are coming into the market and not as financial advice.

Therefore keep your eyes open for the best opportunities and never forget to do your own research. Because as it seems, we have not seen the last of what cryptocurrency and blockchain can bring to the financial world.

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