DeFi
Lark Davis, a crypto vlogger, recently shared his views on the top 8 DeFi protocols and their tokens in a tweet thread. DeFi is a sector of crypto that offers financial services without intermediaries.
🚨🔥 Top 8 DeFi Protocols & Token Utility 🔥🚨
The top 8 #crypto #defi DeFi protocols collectively manage $40B. But are the tokens any good?
Let’s investigate with a no BS 🧵👇 to give you the down and dirty on the use-cases of these tokens.
Source: TVL per @DefiLlama pic.twitter.com/YSUsylikam
— Lark Davis (@TheCryptoLark) February 28, 2023
Davis ranked the protocols by their TVL, which measures how much crypto is deposited in them. He also evaluated their tokens by their use cases, governance features, yield opportunities, and price potential.
The number one spot went to Lido, a liquid staking protocol that lets users stake their crypto on multiple POS chains and receive daily rewards. Davis concluded that Lido’s token, LDO, is for governance but has no burn or yield mechanism.
Maker, the protocol behind DAI, a decentralized stablecoin, took second place. Davis noted that Maker’s token, MKR, is for governance and has a burning feature that reduces its supply as loan fees are paid. As such, he believes the project can potentially drive up value for token holders.
The third spot was held by Curve, a stable swap DEX that operates on many blockchains. Curve’s token, CRV, is for governance and rewards LPs who deposit their crypto in its pools. CRV stakers also enjoy real yield from protocol fees and get LP reward boosts. Lark believes CRV can be a great option for those looking to provide liquidity.
Aave, a decentralized lending market, held the fourth spot. Aave’s token, AAVE, is for governance and is a reserve for the protocol’s stability. Per Davis, AAVE stakers already receive AAVE rewards for securing the protocol but can also benefit from its upcoming GHO stablecoin, which could pay fees to stakers. Lark believes Aave can potentially develop into “a real yield coin.”
Some other tokens on the list were Convex finance’s CVX, Uniswap’s UNI token, JustLend’s JST, and Pancake swap’s CAKE.
Lark Davis went on to conclude his analysis, stating:
Many leading defi protocols offer governance only to token holders. While appealing for some, in general, you want to see additional factors like burning, real yield, vote locking, or other mechanisms that provide an incentive to hold onto these tokens.
