DeFi has made a suite of highly demanded tokens within the larger cryptocurrency ecosystem. With DeFi tokens outperforming Bitcoin in 2020, the ecosystem is quickly turning towards top protocol tokens as a means of value capture for DeFi’s growth.
The best DeFi tokens in 2020 are listed below.
1. Aave – LEND
3. Maker – MKR
5. Curve – CRV
6. yEarn – YFI
On this article, we take a look at the top DeFi tokens and explain their functions briefly.
1- Aave – LEND
What is Aave?
Aave Protocol with their token $ LEND is a leading company within the decentralized finance (DeFi) sphere. The Company allows the users access to its open-source and non-custodial protocol to create money markets, joining a growing list of projects like Compound to bring decentralized options to the masses..
This London-based company is named after the Finnish word for “ghost”, and Aave was set up in September 2018 after a promising initial coin offering (ICO) the previous year for its ETHLend token which raised USD$16.2 million. The executive team under ETHLend migrated to Aave upon its establishment with ETHLend becoming a subsidiary of Aave. In January 2020, ETHLend announced it was no longer in operation and the website is only active for current users to close down their existing loans.
Aave aims to fill in the gaps left by centralized fintech industry giants like PayPal, Skrill and Coinbase. Their main product is Aave Protocol, an open source and non-custodial protocol for creating money markets on the ETH blockchain.
What is Aave Protocol?
It’s largest and most integral aspect is Aave Protocol which was launched in January 2020. Its shift from ETHLend marked a significant shift in strategy for the Company. Going from decentralized peer to peer lending to a pool-based strategy, Aave Protocol is an open source and non-custodial protocol that allows users to create their own decentralized money markets on the Ethereum blockchain.
Depositors provide liquidity by depositing crypto into lending pools which will allow them to gain interest. Borrowers can obtain loans by tapping into these lending pools in either an overcollateralized or undercollateralized way. The loans do not need to be individually matched, one lender to one borrower. Instead, deposits into the pool and the amounts borrowed/ collateral are used to make instant loans based on the pool’s state. There are currently 2 money markets that users can enter into, Aave and Uniswap.
This feature is the most notable one. Flash loans allow customers to take out loans without any collateral. These loans enable a customized smart contract to borrow assets from Aave’s reserve pools within one transaction. The loan is made if the liquidity is returned to the pool before the transaction ends. However, if it’s not repaid by that time, the transaction gets reversed- which will effectively undo any actions executed until that point and guarantee the safety of the funds in the reserve pool.
The Fast Loan feature is suitable for developers who aim to make tools that need capital for arbitrage, refinancing, or liquidating purposes. Aave explained Flash Loans saying it is “designed for developers/people with some technical knowledge”, with the benefit of risk-free loans. Aave charges a 0.09% fee on flash loans.
Rate switching is another great selling point for Aave, which arrived during the May upgrade of their borrowing/interest rates. Rate switching enables borrowers to switch between fixed and floating interest rates, which is very useful in a volatile decentralized market. For high-interest rates, users will usually opt for the fixed-rate but when it is more volatile and expected to be lower, they might go for the floating option to reduce borrowing costs. The fixed-rate can change but only when the deposit earning rate increases above the fixed borrow rate as the system could get unstable by paying out more than its being paid. If so, the fixed rate is rebalanced to the new stable one. On the other hand, when the variable rate is lower than the fixed-rate by 20%, the loan will automatically decrease to account for the difference.
Which Cryptocurrency Tokens are linked?
There are 15 tokens on Aave. These include DAI, USD Coin (USDC), TrueUSD (TUSD), USDT Coin (USDT), sUSD, Binance USD (BUSD), Ethereum (ETH), Basic Attention Token, Kyber Network (KNC), ChianLink (LINK), Decentraland (MANA), Maker (MKR), Augur (REP), SNK, WBTC Coin (WBTC) and Ox Coin (ZRX).
Each asset has a different collateral requirement. This is due to the differences in price volatility. Stablecoins naturally give loan-to-value ratios, due to their price stability. A full breakdown of Aave’s grading process can be found in their Risk Framework.
Alongside these tokens, there is also a native token that Aave uses and which is called Lend.
LEND ($LEND) Token
Often referred to as ETHLend, the LEND cryptocurrency token has rolled over to become the native token of Aave following the winding-up of operations by ETHLend. Although it has kept the name, the new Aave version of Lend is basically different from the previous one.
Built based on the ERC-20 standard, these tokens can be used for fee reductions. The tokens are burnt from the fees collected from the Aave Protocol, with around 80% of platform fees used. It seems that Lend tokens will be worth more over time. LEND owners can also claim on protocol fees in exchange for acting as the first line of defense in the case of liquidity events by malicious borrowers.
Additionally, $ LEND token can be used for voting on Aave Improvement Proposals (AIPs). Moreover,LEND owners can vote with their LEND deposited on the Aave platform, even if it is currently being used as collateral. Currently, this feature is pre-launched on the Ropsten test network before it is launched on the ETH mainnet. This is so the Aave community can vote on proposals without incurring huge gas costs, try out the module and provide feedback to the Aave team before it is formally launched. It is also worth noting that the outcomes of all votes on the testnet are not considered as valid for the long future.
2- Synthetix – SNX
What is Synthetix?
Synthetix is an Ethereum-based DeFi ecosystem that functions as a decntralized exchange (DEX) and asset issuer that is maintained via a staking incentive scheme. SNX is the utility token of the Synthetix ecosystem and has to create synthetic assets called Synth.
Users can speculate on any real-world asset by creating synthetic assets which track their prices in real-time via oracle feeds. And unlike traditional financial systems, Synthetix needs no KYC. You don’t even require to create an account.
Anyone could gain exposure to Tesla stocks, high premium bonds, real estate, and just about anything. This can be done simply by depositing SNX tokens into the platform.
Moreover, those that mint synthetic assets can earn passive income from the fees generated by people buying the assets.
One of the best aspects of the Syntethix system is that it can siphon a huge chunk of the trillions of dollars of assets from traditional markets and bring them to the Ethereum network.
Synthetix Network (SNX) Token
SNX is the utility token of the Synthetix ecosystem and has to create synthetic assets called Synths. Users can buy SNX tokens from several crypto exchanges and deposit them in a compatible wallet in order to stake them.
Once they are locked up, new Synths can be minted. The token’s supply used to be deflationary until the update came out in March 2019. The update saw the implementation of an inflationary monetary policy to encourage stakers to create more Synths.
By 2025, about 250 million SNX tokens will be minted. SNX has surged drastically in the last couple of months. It went from $0.79 at the beginning of June to around $3.32 on the 25th of July 2020.
These tokens are synthetic assets that track the price of real assets. They are minted by locking up SNX tokens.
Synths can come in different forms and they are denoted by ‘s’. For instance, fiat synths would look like these: sEUR, sUSD, SRMB. Other variations of Synths include sAAPL (synthetic Apple), sTSLA (synthetic Tesla), sAu (synthetic gold), sBNB (synthetic Binance Coin), sDEFI (synthetic DeFi Index), and so many more.
Whenever new Synths are minted, stakers create a debt so they have to pay back the same value in Synths before they can withdraw their locked-up SNX tokens. And the value of Synth will likely change over time.
As a result, traders may need to pay a different amount of Synths by the time they withdraw their locked up tokens.
One of its good features is that users do not have to pay the same type of Synth that was initially minted. As long as the Synth used to pay has the same value, the system will accept it. For example, a Tesla share Synth can be used to pay in the place of a Bitcoin Synth as long as they have equal value.
Remember that Synth tokens are not exactly the same as the assets they represent. They are known as synthetic assets for a reason.
The Synthetix system needs a collateralization rate of 750%. For example, if you want to mint 100 sUSDT, you need to deposit $750 worth of SNX tokens as collateral.
This rather high collateralization rate is imposed in order to hedge the platform against extreme market price swings.
It is where most people are making money out of the Synthetix protocol. But like any money-making schemes, staking Synthetix bears some degree of risk.
How to stake SNX
If you are going to make money staking SNX, there are someeasy steps involved.
- First, you have to buy Synthetix in any exchange and connect to a web3 wallet.
- Visit Mintr, the best portal interface for minting and managing Synths.
- Connect your web3 wallet to Mintr.
- Click ‘Mint’ and select what type of Synth you want to mint.
- Remember the collateralization ratio of 750%
- Input the number of Synths you want to mint.
- Click ‘Mint Now’.
- Confirm the transaction in your web3 wallet.
After that, your SNX token will automatically be staked. You will now be able to enjoy rewards generated from trading fees. Moreover, you are also subject to inflation rewards.
These rewards, however, come with a price. When you mint Synths, you get to have a portion of the platform’s debt pool — the total value of all Synths. And this debt can increase and decrease regardless of the original value of your minted Synths.
Synthetix has a built-in DEX interface that allows users to trade without an account. The DEX currently offers 19 assets to trade and 31 trading pairs.
All you should do is visit the Synthetix exchange and connect any web3 wallet like MetaMask. It has a slick but simple interface that eases users’ experience while trading.
Synthetic exchange charges both maker and taker fees with 0.30% that is higher than the industry standard of 0.05-0.25%. Those will be used to reward the stakers for providing liquidity to the platform.
Additionally, traders will also be charged Gas fees by the Ethereum network. For now, all these fees could add up which might be a hindrance from the greater market to fully adopt DEXes for all their trading needs.
In time, when Ethereum eventually scales, gas fees should be low enough to become negligible.
DEXes like Synthetix don’t require withdrawal fees (except for Gas) since trades are conducted directly from wallet to wallet.
3-Maker – MKR
What is Maker?
It is one of the top DeFi tokens. The Maker (MKR) token was created by MakerDAO and it aims to support the stability of MakerDAO’s DAI token and enable governance for the DAI Credit System. Holders of MKR make important decisions for the system.
MakerDAO has two tokens, MKR and DAI. The DAI is a stablecoin that provides an alternative to more volatile cryptocurrencies, as well as a new type of financial system. The MKR is used to maintain the other one stable. Traditional stablecoins use reserves of fiat money or even gold to peg a cryptocurrency to the value of these real-world assets to keep it stable. But that has leaded to problems. MKR token is used to act as a counterweight to price fluctuations.
Why is it so special?
The MKR token aims to keep its partner stablecoin DAI at the same value as $1. MKR can be created and destroyed in response to DAI price fluctuations in order to maintain DAI’s dollar-equivalent value. DAI uses a system of collateralization (essentially insurance), whereby holders act as part of the controlling mechanism to help manage the network.
DAI is issued when users buy a smart contract based collateralized debt position (CDP) which behaves like a loan. CDPs can be bought when Ether (ETH) and DAI is given in return. The system means that individuals can, in essence, obtain a loan against their ETH. When the loan is repaid the DAI is burned or destroyed. Fees occur in MKR along the way.
The MKR token is a solution for a scenario where the price of ETH falls suddenly and the DAI system is disable to handle. If the collateral system is not enough to cover the value of DAI then MKR is created and sold to the market to raise additional collateral.
What can you do with Maker?
Owners of MKR gain voting rights in the Maker platform’s continuous approval voting system. MKR holders vote on things like the collateralization rate of CDPs. For participating they gain MKR fees as reward. These owners are incentivized to vote in a way that benefits the system. If the system works well MKR’s value is maintained or increases. Poor governance would devalue MKR.
Maker token is an ERC-20 token, constructed using ETH’s protocols. It can be stored in ERC-20 wallets and is tradeable on a number of exchanges.
Future of Maker
MakerDAO’s aims to create a stablecoin without concerns over reserve-backing are credible. With the collateralization mechanisms and the further failsafe of MKR, MakerDAO has a system to protect the value of its stablecoin DAI which could lead to its wider use.
As a further failsafe, MakerDAO has an emergency process called “global settlement.” If something goes wrong with MakerDAO’s system, a group of individuals holds settlement keys. These can be used to trigger a settlement where collateral held in CDPs is released to DAI holders in the equating value of Ethereum.
MakerDAO is really transparent, it shares its regular meeting recordings online. As DeFi or decentralized finance has become one of the biggest success stories, MakerDAO, and its MKR token are growing everyday.
4- Balancer – BAL
What is Balancer?
Among the top DeFi tokens, Balancer (BAL) is an automatic market maker (AMM) protocol that aims to reduce the cost and slippage between trades of different cryptocurrencies. Balancer is a decentralized replacement for the traditional market-maker, a third party entity which provides liquidity to traded assets. Balancer protocol can be called upon by different decentralized trading platforms to automatically find the best rates and trading prices using Smart Order Routing (SOR). The protocol also provides the funds necessary to complete the trade, using the funds from available Balancer Pools.
Balancer uses the N-dimensional invariant surface that is built upon the Uniswap dapp. They use Automated Market Makers (AMMs), much like UniSwap, which are built off algorithms to regulate the market. Their Pools are doing away with portfolio management fees with users instead of collecting fees from traders, who re-balance the portfolio by “following arbitrage opportunities”.
Balancer has moved into a prominent position within the Decentralized Finance (DeFi) hierarchy, as it’s token caught the coattails of Compound Protocol’s governance tokens rise at the start of 2020. This saw significant attention on the exchange and has been earmarked as a competitor in the DeFi sphere. This perception coincides with an surge in popularity for DeFi projects and their mining qualities.
What are Balancer Pools?
Balancer pools are collections of user supplied funds that are used to provide liquidity to users and transactions. These pools can total up to more than $11 Million USD (the USDT, BAT and COMP pool). This collection of funds will be called upon during cryptocurrency trades as the counter-party to the transaction, thus providing liquidity to traders.
Controlled/Private Pools: These are used when a fixed state is over the pool and the creator can set out the tokens and weights. This is normally done for private actors who don’t want outside liquidators, like third party liquidators working with large amounts.
Finalize/Shared Pools: These pools are open for all actors to add liquidity and is a one-way transition. They cannot be amended and have a fixed parameter, opposed to controlled pools and are usually for the general public to liquidate and make profits.
Alongside the two pools above, there are other more specific smart pools such as Liquidity Bootstrapping Pools (LBPs) which give the opportunity for teams to release a project token while at the same time building deep liquidity.
What is BAL Token?
BAL is the native governance token of Balancer. The team behind the DeFi protocol considers it as a necessary step to “decentralized and diversify governance. BAL holders are able to help guide the protocol to its fullest potential. Balancer specifically names deploying the protocol on blockchains other than Ethereum, implementing layer two solutions, introducing fees at the protocol level to generate revenue, and more as examples of actions BAL holders can make. There is not a formal governance structure in place, though when launched, Balancer’s may be similar to that of other protocols. Other DeFi protocols have the following governance structure:
- Users identify an issue when using the protocol and share observations online.
- Users narrow down the best ways to address the issue via public forums.
- Users create and present a technical specification of a solution to the issue.
- It’s presented to the community, then voted on.
- If the proposal gets a majority of votes and/or reaches a certain threshold, it is implemented.
Blockgeeks will update this guide as more information on the governance system is released.
Liquidity mining has become one of the most popular topics in the decentralized finance (DeFi) sphere in recent weeks. At its core, liquidity mining is essentially when users supply liquidity of assets to a DeFi protocol in exchange for some kind of reward. That reward can be different tokens, including governance tokens of the underlying DeFi protocol (which may end up having monetary value – like COMP). It basically offers a way for users to earn money on assets they own.
The main way to earn $BAL tokens is Liquidity Mining. Essentially, Balancer rewards liquidators who pay into their pools in the form of $BAL tokens. The Company’s proposal is to give out BAL tokens in proportion to the amount of liquidity each address contributes relative to the total liquidity on Balancer.
Another way to earn BAL is through creating a pool and reaping the benefits of trading fees. These are handed out in the form of $BAL. This system also incentivizes the pool creator to lower fees, as the lower the fees are, the more BAL they receive. Balancer’s fee gives pool creators a short or a long term option, and they hope it will encourage lower fees so that traders are lured onto the exchange.
To conclude, Balancer has position itself as a powerful tool to automate marketing making and reduce transaction fees for various cryptocurrencies. It’s leading the liquidity pool market with the ability to create n-dimensional liquidity pools which is a market first. With their great formula which negates and actively discourages large fees, Balancer has created a decentralized project that could potentially be a self-sufficient system with a community emphasis.
For now though, the main target for Balancer is to create stiff competition for UniSwap and make themselves the industry leaders in the AMM field on Ethereum. Some analysists believe this is likely as the DEX functionality on Uniswap is the same as Balancer, as one Uniswap token-for-token pool is equal to the Balancer pool with two tokens set to 50/50, or 1:1, value.
5- Curve – CRV
Curve Finance is a decentralized exchange (DEX) for trading stablecoins. Like every other Decentralised Finance (DeFi) project, Curve Finance has its native token called Curve DAO token (CRV). The Curve Finance DEX has already been up and running since January 2020, and yield farmers have already been making gains off of it. However, it was the abrupt listing of the $CRV token on 14th August 2020 that really turned heads in the cryptocurrency space, and not necessarily in a good way.
What is Curve Finance?
Curve finance is a decentralized exchange liquidity pool built to support the efficient trading of stablecoins. Curve supports BTC pairs, as well as DAI, BUSD, sUSD, TUSD, USDC, and USDT.
And through the help of AMMs (automated market makers), Curve makes low slippage trades possible while keeping transaction fees low. Most arbitrage traders prefer Curve compared with other liquidity pools such as Uniswap simply due to the savings in trades.
With only a few months experience, the platform has already outperformed other exchanges in terms of trading volume. With Uniswap at the top of the ranks, Curve performed stronger than projects such as Aave, Compound Finance and Balancer.
What sets Curve apart from other DEXs?
The problem with decentralized finances like Uniswap is the cost that users incur for token trades. Look at other DEXs, and you find out that they can’t facilitate direct token trades. In Uniswap’s case, for example, stablecoins still have to be traded for ETH, before they are traded with the stablecoin that the user wishes to get (Uniswap V2 might have already eliminated this drawback). Given that the transaction involves two trades, the transaction fees are also doubled for every trader.
Curve functions in a different way. The platform’s liquidity pool allows direct token trades among listed pairs. With a direct swap function, traders save more by paying lower trading fees. And as of now, the fees are still set at 0.04% per transaction. This means that users have the opportunity to execute more efficient trades without having to pay much in fees for every transaction.
The algorithms for both DEXs are also different. Uniswap concentrates on maximizing available liquidity, but Curve’s algorithm puts more importance in minimizing slippage. Because of this, high frequency and large volume traders save more moneyt by using Curve.
In comparison to the order book systems, Curve uses an AMM model that maximizes on-chain liquidity pools to provide the necessary funding even before trades are executed.
Making Money Providing Liquidity in Curve
On-chain liquidity pools are funds held in exchanges to facilitate trades. With Curve, users can freely deposit any supported token in the pool and become a liquidity provider.
And in turn, liquidity providers earn fees from the swaps that are performed in the exchange.
Its liquidity pool is also accessible to many other protocols.Actually, the platform experienced increased trading volume after the introduction of liquidity mining from yEarn.
In liquidity mining, miners help run an exchange’s market-making bot to help it run its trades. This trend enticed miners to provide additional liquidity in yEarn’s yCRV token as it is quite profitable.
The yCRV token is a wrapped token composed of Curve’s supported trading pairs and represents its liquidity pool. Additionally, since Curve’s liquidity pool is available to other protocols, liquidity providers also earn additional income from their interest fees.
CRV is Curve’s native token, it is generated when depositing and staking cryptocurrencies on the platform. It is awarded to liquidity providers proportional to their share from the yield that their pools make. And since CRV has just been released, those who have contributed to Curve’s liquidity pool will receive some amount of it.
With Curve’s transition to become a DAO, CRV token also represents the holders’ rights to take part in its governance mechanism, and they can make proposals and vote on them. And with CRV, governance will follow a ‘time-weighted’ voting system. It simply means that the longer they own CRVs, the greater their voting power in the DAO becomes.
Another thing yield-farmers do is to take advantage of the popularity of DeFi to speculate on tokens such as $CRV. So what they would do is after depositing and earning the $CRV token, they would sell $CRV on the market for profit.
6- yEarn – YFI
YFI, the token of Yearn.finance, has been the fastest DeFi growth story in cryptocurrency history. YFI’s token, which aims to have no financial value by Yearn Finance’s own creator, is currently trading over $ 3,000 and provides investors more than 35,000 per week.
The Decentralized Finance (DeFi) area is actually an important area these days. The locked value in the lending protocol continues to increase and shows no signs of slowing down. DeFi experiences exciting events every day. One of the recently launched DeFi tokens, YFI, has earned a 35,000% return to those who invested in it early. The ironic point behind all this is that the token never has financial value.
On July 17, Andre Cronje announced that he launched the Yearn Finance (YFI), the symbol of an existing yield collection platform.
In the early days, Cronje had figured out that the yield farming had become more complicated. He also anticipated that it would continue its complexity over time. In order to stack up earnings, investors wanted to combine multiple lending platforms. They found it hard to make profits due to its accessibility. So Cronje developed a product to make the process simpler. This led to the development of Yearn.finance.
What is Yearn Finance?
Yearn.finance is generally a platform composed of the protocols built on Ethereum. It increases the annual percentage yields (APY) of the cryptocurrencies which have been deposited into the DeFi system.
yEarn offers a decentralized platform of yield farming opportunities. By combining the various platforms, it helps the users in optimizing their yield farming results. As a user deposits tokens to the platforms, they are converted to yTokens.
The leading integrator of yTokens is Curve as it has created an Automated Market Maker (AMM) between yUSDT, yUSDC, yTUSD, yDAI
There are 5 major types of Yearn Products offered which includes:
1) Ytrade.finance: This allows users to leverage trade up to 1000x with the initiation fee and 250x without the fee. Supported currencies tokens include $DAI, $USDC, $USDT, $TUSD, and $sUSD.
2) Yearn.finance: This allows profit-switching between different Defi platforms like Aave, Compound, Curve, etc. autonomously.
3) Yliquidate.finance: This offers an automated liquidation mechanism for Aave. On a priority basis, YLiquidate allows 0 capital liquidations.
4) Yswap.exchange: The Yswap exchange offers a stable AMM, which allows single-sided liquidity provision.
5) Yleverage.finance: This enables the creation of a 5x leveraged Dai vaults with USDC.
YFI Increased 35,000% in One Week
Token was not only listed on Uniswap, but it also provided up to 35,000% of profit per week, according to the stock market. It is traded at about $ 3,125 in Uniswap. According to DeBank, the total value locked in the liquidity pool is $ 371.94 million. It means even locked liquidity in the protocol increased by approximately 4,600% in less than a week.
This applies to strong ongoing developments in DeFi too. According to DeFi Pulse, the total value locked in lending protocols exceeded $ 4 billion. While Aave dictated the Compound as the second largest protocol, Maker took the top spot.
How does it work?
The working process of Yearn finance is easier to understand compared to the other Defi projects. It works by moving the stablecoin funds between various projects such as Aave, Compound, and DyDx.
This moving of the stablecoin depends on the one which is generating the highest APY. The currencies which yearn finance supports currently are DAI, USDC, USDT, TUSD, and sUSD. These supported currencies are likely to change over time as the protocol is governed by the community.
Whenever a user initially deposits a stablecoin into Yearn finance, it is further converted automatically to a similar amount of tokens. These are commonly known as “yield optimized tokens”. This can be further used to earn the YFI Tokens.
YFI token is the native token for yEarn. It was known as iEarn before. The users or the token holders enjoy the access to voting or participating in the governance decisions of the network. These include decisions such as the supply and the distribution of potential tokens to the users. The token has no intrinsic value.
The users who provide the liquidity to any of the platforms can get access to the YFI tokens. It offers distinct features since it has no pre-sale, pre-mine, or even allocation to the founder. It is also considered to be one of the most decentralized tokens which have ever been issued.
Where to buy YFI Tokens
There are three ways of earning the token of Yearn.finance:
- The first method is the deposit of a mixture of about 98%-2% mix of DAI and YFI into the Balancer protocol. This can be further exchanged for the BAL (Balancer protocol) tokens in return. These BAL tokens are then deposited into YGov in exchange for YFI.
- The second method is the deposit of a stablecoin into Yearn finance. This is then converted automatically to a similar amount of tokens which can be used to earn the YFI tokens.
- The third method includes depositing a mix of YFI and yCRV into the Balancer exchange. This is exchanged for the BPT (Balancer pool) tokens. These are then further deposited into YGov to acquire the YFI tokens.
The decentralized exchanges can be the best place to get the YFI tokens.
While considering the centralized exchanges, the only ones currently offering YFI token trading pairs are Poloniex and CoinEx. It should be noted that these exchanges offer very limited trading volume.
YFI Cryptocurrency wallets
YFI token is generally an ERC-20 token which is built on Ethereum. This allows to store the token in all of the wallets which support the Etherum based platform. Some of the wallets which can be used to keep your YFI secure are Keepkey, Ledger, or Trezor.
The software wallets are an ideal option if you want to move the YFI token around. The noted software wallets for the YFI cryptocurrency include Coinomi (mobile), Exodus wallet (mobile/desktop), and Atomic Wallet (mobile/desktop).
How to Stake YFI Tokens?
- Navigate to the official website. Ensure to provide liquidity to the Curve’s YPool.
- Connect your web3 wallet.
- After one time, you will be able to get YTokens.
- Then, a new “Stake unstaked” button will appear. Click and confirm to spend your yTokens.
- You can view your share by going on your profile page where it will be reflected.
Yearn Finance Governance
One of the main notable features of its governance is that the holders could burn their YFI Tokens in exchange for the same amount of funds that are locked in the pool. Its governance system is often referred to as “meta governance”.
It involves a higher risk since the assets are being taken into account by the other Defi protocols that interact with Yearn finance. Those who have deposited their BPT tokens into the YGov governance pool are the ones who are eligible to cast their votes in the Yearn finance platform.
YFI Cryptocurrency Price Analysis
Since its launch, yearn token has shown massive growth and has now reached a surprising price of 4900$USD. This increase in the price has continued over time. It has achieved this even after all the tokens have been issued and already in circulation.
One of the distinguishing features is that the circulating supply of YFI is almost equal to the total YFI supply. According to the coin market cap, only 51 YFi tokens are not currently in circulation. So as per the data, it is visible that the YFI token has been increasing since its launch and continues to show rapid growth.
Thanks to the Yearn.finance services, users can capture the rate of income they could catch on their own. These are increasingly common finance and management tokens called YFI. Users who earn revenue from various DeFi platforms through Yearn.finance can also earn YFI token.
7- Aleph.im – Aleph
What is Aleph token?
Aleph.im which has introduced aleph token is a cross-blockchain, cross-technology layer-2 network which is focused on decentralized applications (dApps) and their security related infrastructure. Aleph.im is going to revolutionize IoT, the web, and the cloud as we know it by being the first cloud-native blockchain.
Right now, in the most of the blockchain projects with smart contract support, the current state of applications are written (or computed from) on a blockchain, this is immutability. Immutability can be a great feature for archival data, but when it comes to instantaneous actions, batching user requests for non-critical items then you will need a second layer of truth, a distributed state that you can influence by signing messages. Agents will then commit the messages on the blockchain for the traders, incentivized by the network token. The agents will spend the native chain asset and will receive the token in exchange for their service.
This enables users free and instant interaction with dApps, with efficient batched inserts on the blockchain for immutability and maximum security. Storage of files and messages (content) is incentivized and distributed too.
Aleph is the first project that allows any developer to build large applications as internet scale, hardware devices that can talk with a powerful distributed cloud (aleph.im!) and so many others.
While we have lots of competitors that might relate to one specific area of technology, no other project has the same capabilities as Aleph right now.
what can Aleph token be used for?
The Aleph token is built to be adopted and utilized, not just to store. In the short term, Aleph tokens can be used for storage on the network (for dApp owners, devices providers, and the user themselves if they are using a non-incentivized dApp).Users will also be able to use the Aleph tokens to sync on chains (for dApp owners) and pay for computing on a CPU/GPU intensive virtual machines (e.g. machine learning). These are only a few of the useful cases, but there will be so many more in the future, and Aleph is currently being tested on several projects as a Proof of Concept (POC).
How Can users Support Aleph and Earn Aleph Tokens at the Same Time?
In the distributed blockchain network, multiple nodes work together to verify the transactions and protect the network. These nodes use certain predetermined rules, known as the consensus protocol. By staking NULS on Aleph.im nodes, traders can gain Aleph tokens through the protocol called Proof of Credit Mining (POCM), which is an advanced form of Byzantine fault tolerance. Utilizing POCM increases security and decreases costs.
Current opened Aleph POCM NULS nodes are:
Remember that when you stake on Aleph nodes, the commission rate is set at 99%. The NULS that would normally get rewarded to node stakers will move to an Aleph Team account. Instead of being rewarded with NULS, users will be rewarded with Aleph tokens. By staking with the Aleph nodes, users will not only be securing difficult to acquire Aleph tokens, but they will also be supporting the Aleph project simultaneously.
In the future, users may be able to earn Aleph tokens through bounties offered by Aleph. Once the network launches in the future, they can also run servers to share storage and CPU to earn Aleph tokens.
Of note, Aleph tokens will be locked up and unmovable for now. They will be unlocked at a future date to be determined by the creators. For the detailed information on reward/return rate, please refer to section “4. Aleph Token” in Aleph’s whitepaper.
9-UniSwap – UNI
On 16th September, Uniswap announced a launch of its new token – UNI. The most interesting part of the launch was how some of the tokens were retrospectively allocated. Everyone who had used Uniswap, even once before 1st September, could claim their 400 UNI tokens that were worth around $1200 on that day.
After a couple of days, the UNI tokens were actively traded across both centralized and decentralized exchanges with the token price surged over $8 making the initial 400 UNI reward worth around $3200. The UNI tokens were distributed to around 50,000 Ethereum addresses making them one of the most widely distributed tokens in the space.
Besides, the liquidity providers of the protocol were also retrospectively rewarded with extra UNI tokens.
After 4 years, there will be a perpetual inflation rate of 2% per year to ensure continued participation and contribution to Uniswap at the expense of passive UNI owners.
Moreover, Uniswap announced 4 incentivized liquidity pools that will be rewarding liquidity providers with extra UNI tokens. It attracted millions of dollars of new liquidity. UNI users can also vote for adding more incentivized pools after an initial 30-day governance grace period is over.
By launching a token, the Uniswap team aimed to decentralize the protocol making it a publicly-owned and self-sustainable financial infrastructure while still continuing to protect its indestructible and autonomous qualities and working on Uniswap V3.
The token owners can participate in Uniswap’s governance by voting on different proposals or delegating their votes to a third party.
And, as with pretty much all of the governance tokens, there is a lot of speculation on the potential future revenue share from the protocol with the UNI owners.