DeFi is one of the biggest and most exciting trends in the blockchain industry, as many believe it will overtake traditional finance. This growing financial sector relies on the promise of robust, decentralized networks to support innovation (both financial and technical) that could fundamentally disrupt how we think of money exchange.
With that said, we must understand that DeFi platforms hold both peril and promise. In this guide, we’ll cover the top 10 DeFi platforms for 2023, looking at both the potential risks and rewards.
What Is Decentralized Finance?
Decentralized finance (DeFi) refers to websites that offer “decentralized” financial tools and services such as investing, borrowing, lending, trading, tokenized real estate, and insurance.
With centralized finance, a bank or financial institution usually sits in the middle to manage the money. With decentralized finance, transactions are peer-to-peer through blockchain technology.
The potential of DeFi is expressed in its adoption by users–and the data from the last three years validate this.
The Total Value Locked (TVL) in DeFi protocols was under $1 billion in January 2020. Spurred by frenetic activity in the crypto markets during the COVID lockdowns, it surged to $248 billion by November 2021 – a phenomenal 350x rise in 22 months.
By 2022, the crypto bull run had run its course, and a crypto winter hit the market hard. Although DeFi was also affected (TVL had dropped to just around $42 billion), the numbers remain significantly higher than in 2020.
But, as centralized platforms like FTX have collapsed, the allure of DeFi remains strong. TVL surpassed $50 billion in Q1 2023, indicating sustained interest in decentralized crypto platforms.
In this piece, our editors have researched the Top DeFi platforms to identify the tokens worth a closer look for crypto investors.
Beyond TVL: How We Rank DeFi
When our analysts assess DeFi platforms, they use criteria that articulate the “trust factor” of these platforms–criteria such as year of launch, community following and total value locked (TVL) in the protocols. Even though DeFi is a young industry, we’re looking for platforms that have stood the test of time (relatively speaking), typically with a large user base and significant value.
This is slightly different than other analysts. Most DeFi rankings look exclusively at Total Value Locked, which can be misleading. The DeFi industry has nearly $50 billion locked in apps.
TVL is like money “locked” in traditional mutual funds or CDs. This metric does matter, representing the sum of funds available to a DeFi platform, like a bank's lending and borrowing capacity. But many DeFi projects quickly attract a lot of capital and then quickly flame out as users leave the service, rendering TVL a less-than-useful metric.
So, TVL is just one part of the picture. We also look for longevity and the long-term ability to sustain a strong community of users — in the same way that we would look at a bank’s history and customer happiness, not just its size.
| Platform | Services | Year launched | Com-munity Members | Total Value Locked (TVL) | Daily Active Users | Transaction Volume | Score |
| Lido | Staking | 2021 | 181.8K | 13.9B | 649 | 264.1M | 4.5 |
| Uniswap | Token Exchange /Lending | 2018 | 1.2M | 3.2B | 79,175 | 49.5M | 4.0 |
| Aave | Borrowing and Lending | 2017 | 609K | 4.4B | 2,290 | 12.7M | 3.5 |
| Curve Finance | Borrowing and Lending /Decentral-ized Exchange | 2020 | 371K | 2.4B | 529 | 13.75M | 3.5 |
| Maker | Borrowing and Lending /Stablecoin | 2018 | 301K | 5.1B | 198 | 23.6M | 3.5 |
| JustLend | Borrowing and Lending | 2022 | 58.6K | 3.4B | 306 | 12M | 3.5 |
| Pancake Swap | DEXes | 2020 | 1.9M | 1.1B | 85,401 | 29.2M | 3.0 |
| Com-pound | Borrowing and Lending /Stablecoin | 2018 | 307.3K | 1.9B | 113 | 6.4M | 2.5 |
| Convex finance | Assets | 2019 | 65.3K | 2B | 80 | 3.5M | 2.5 |
| Instadapp | Services /Bridge | 2018 | 56.3K | 1.8B | 46 | 6.8M | 1.5 |
Lido (LDO)
Lido was launched parallel to the Ethereum 2.0 Beacon Chain as a liquid staking solution for Ethereum and other PoS chains. The protocol offers non-custodial staking services, allowing users to stake their tokens without locking any assets or maintaining staking infrastructure.
Year Launched: 2020
Blockchain: Ethereum
Services: Liquid staking
Total Value Locked: $13,900,000,000
Community Following: 181,849
BMJ Score: 4.5
Uniswap (UNI)
Uniswap is a decentralized exchange on the Ethereum network that enables users to trade ERC20 tokens autonomously and swiftly. It does so through an algorithm that matches trades based on supply and demand in a liquidity pool, removing middlemen and intermediaries.
Year Launched: 2018
Blockchain: Ethereum
Services: Token Exchange/Lending
Total Value Locked: $3,200,000,000
Community Following: 1,170,582
BMJ Score: 4.0
Check out BMJ’s Uniswap Investor Scorecard here and Risk scorecard here.
Aave (AAVE)
Aave, formerly known as ETHLend, is an Ethereum-powered, decentralized peer-to-peer marketplace for borrowing and lending digital assets. The peer-to-peer lending platform enables borrowers and lenders to agree on the loan terms that are then executed using smart contracts.
Year Launched: 2017
Blockchain: Ethereum
Services: Borrowing and Lending
Total Value Locked: $4,410,000,000
Community Following: 609,255
BMJ Score: 3.5
Check out BMJ’s Aave Investor Scorecard here.
Curve Finance (CRV)
Curve finance is a decentralized exchange protocol where users can swap and trade Ethereum-based assets. It also focuses on providing liquidity to the markets using a market-making algorithm that automatically buys and sells assets while profiting from the bid and ask price spreads, incentivizing users to add their funds to the overall pool and earn interest.
Year Launched: 2020
Blockchain: Ethereum
Services: Borrowing and Lending/Decentralized Exchange
Total Value Locked: $2,401,000,000
Community Following: 370,784
BMJ Score: 3.5
Check out BMJ’s Curve Investor Scorecard here.
Maker (MKR)
The Ethereum-powered MakerDAO is a decentralized Collateralized Debt Position (CDP) platform that supports the stablecoin DAI, which aims to maintain its value one-to-one with the US dollar. Users can open a Collateralized Debt Position (CDP) by locking up ether (ETH) or other Ethereum assets as collateral to receive DAI as a debt against the locked-up assets. The platform uses the MKR token for interest payments, and the DAI and MKR paid are burned once the CPD is closed out.
Year Launched: 2018
Blockchain: Ethereum
Services: Borrowing and Lending/Stablecoin
Total Value Locked: $5,130,000,000
Community Following: 301,906
BMJ Score: 3.5
Check out BMJ’s Maker Investor Scorecard here.
JustLend (JST)
The first-ever official lending platform on TRON, JustLend enables users to borrow and lend their assets and earn interest on deposits. The interest rates on fund pools are decided by the overall supply and demand of TRON assets.
Year Launched: 2020
Blockchain: TRON
Services: Borrowing and Lending
Total Value Locked: $3,358,000,000
Community Following: 58,577
BMJ Score: 3.0
PancakeSwap (CAKE)
PancakeSwap is a popular decentralized exchange providing token trading alongside features like staking and liquidity pools. The DEX is based on the BNB Chain, formerly the Binance Smart Chain.
Year Launched: 2020
Blockchain: BNB Chain
Services: Trading, Staking, Yield Farming
Total Value Locked: $1,100,000,000
Community Following: 1,856,343
BMJ Score: 3.0
Check out BMJ’s PancakeSwap Investor Scorecard here.
Compound (COMP)
Compound Finance is an Ethereum-based, open-source money market protocol that enables users to borrow or lend against collateral. Anyone can participate in Compound’s liquidity pool and start to earn interest on their digital asset holdings. The interest rates adjust according to the supply and demand on the platform. Compound supports DAI, ETH, and USDC, among other digital assets.
Year Launched: 2018
Blockchain: Ethereum
Services: Borrowing and Lending/Stablecoin
Total Value Locked: $1,877,000,000
Community Following: 307,253
BMJ Score: 2.5
Check out BMJ’s Compound Investor Scorecard here and Risk scorecard here.
Convex finance (CVX)
is a DeFi protocol built on Curve finance. Convex protocol maximizes yields by streamlining the boosting experience. Curve LP (liquidity pool) providers can claim boosted CRV (Curve DAO Token) and earn trading fees without locking CRV. Users receive a token called cvxCRV when they deposit a certain amount of CRV tokens into Convex. Moreover, users can choose to stake cvxCRV tokens and receive CVX tokens as staking rewards along with a part of CRV rewards from Curve through Convex.
Year Launched: 2019
Blockchain: Ethereum
Services: Assets
Total Value Locked: $2,043,000,000
Community Following: 65,332
BMJ Score: 2.0
InstaDApp (INST)
Popularly known as the “DeFi Smart Layer,” InstaDApp is a DeFi app based on the Ethereum network. It is designed to provide a single, easy-to-use access point to interact with multiple DeFi protocols. Instead of using 2-3 separate apps for lending, borrowing, or staking across protocols, InstaDApp allows users to do everything in one place.
Year Launched: 2019
Blockchain: Ethereum
Services: DeFi Token, DeFi Smart Accounts
Total Value Locked: $1,830,000,000
Community Following: 56,300
BMJ Score: 1.5
Getting Involved with DeFi Platforms
There are a variety of ways to get involved with DeFi platforms:
- Earning Yield: One way to earn “interest” on your crypto assets is by depositing them in DeFi platforms such as Aave or Compound that will pay you an Annual Percentage Yield. (See our current list of Best DeFi Rates.)
- Liquidity mining: This allows users to earn yield for providing liquidity (capital) to a liquidity pool on a DEX (Decentralized Exchange). Users may also be rewarded in the DEX’s in-house token, which may increase in value, like owning “stock” in the company. (See our list of Top Dex Aggregators.)
- Trading on DEXs: Decentralized exchanges let people directly trade with each other, unlike centralized exchanges. This means you can often trade smaller coins on DEXes that you won’t find in centralized exchanges.
The sustained interest in DeFi projects is encouraging for crypto investors. With the constant innovation and evolution of these decentralized financial services and the addition of new protocols, the DeFi space remains one of the most exciting areas to watch.
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