Decentralized Finance (DeFi) creates the next generation of financial primitives. Financial services can now be accessed by anybody in the world thanks to DeFi projects and frameworks.
DeFi projects are one such innovation that has emerged in response to the growing number of people interested in learning more about their financial options, especially in long-term investments.
DeFi projects aim to deliver typical financial services like loans, savings accounts, and asset exchanges without the need for a third-party intermediary, while it offers trustless and transparent features, compared to traditional banks.
Regardless of whether you’re a seasoned blockchain enthusiast or a complete novice, you may want to learn more about DeFi, Defi Projects, and its potential impact on long term investments. Therefore, we will walk you through the five (5) big DeFi projects that will have a significant impact on traditional and global financial system which you can consider for long-term investment.
List Of DeFi Projects For Long Term Investment And Their Features
- Colony Lab
- The Graph
Aave is a DeFi platform that allows users to lend and borrow a wide range of cryptocurrencies. Smart contracts enabled by a crypto pool power the platform’s peer-to-peer lending functionality. Lending money in exchange for interest or borrowing money in return for interest is a common practice among cryptocurrency users.
Aave is built on the Ethereum blockchain. Users must rely on a network of machines running Aave to handle transactions involving smart contracts and their assets. Your money can be secured by a wide range of institutions, not just traditional banks and financial institutions.
Features Of Aave
Using Aave, you may lend and borrow money without having to worry about banks, brokers, or other middlemen becoming involved. In the end, you are making a long-term investment in the DeFi project while also having a say in it.
Today, you can deposit up to 26 different cryptocurrencies to earn interest on the site, and you can borrow up to 25 of those cryptocurrencies. ETH, LINK, and LEND are just a few of the cryptocurrencies that can be used to store value or to borrow money.
You can examine the borrowing and lending rates for each cryptocurrency on the Aave website. Aave utilizes an algorithm to determine current charges based on the usage rate. People can deposit more crypto when interest rates are high because of a lack of coins in the pool. Because there hasn’t been much crypto usage, the interest rate is low, making it easier for more people to borrow.
There are two DeFi tokens in Aave’s possession. The first is AAVE, which serves as the Aave protocol’s native governance token. Purchasing AAVE tokens is analogous to purchasing stock in a corporation.
flash loan is a popular type of loan on Aave because it may be used to take advantage of crypto-market arbitrage opportunities. Flash loans do not necessitate any form of collateral. Paying back the loan must be done in the same transaction, and this normally takes only a few seconds or less. Payment is reversed if it is not made in the same transaction.
There are only 16 million Aave tokens in circulation. To help with program development, a total of three million of these tokens have been placed in a DeFi ecosystem reserve contract.
Additionally, the Aave protocol includes Aave staking. Aave tokens can be staked here as a form of insurance against the risks of the market. For example, if a popular stablecoin on Aave loses its peg to the US dollar, the safety module can be used to reimburse the loss.
Another decentralized financial system on the rise is PancakeSwap. As an automated crypto market maker, the DeFi project was presented just a year ago. It is built on the Binance Smart Chain. PancakeSwap, like Aave, is a source of market liquidity.
In October 2021, about $5 billion were staked by users of the PancakeSwap decentralized exchange. As it boasts of about $2 billion in market capitalization, PancakeSwap is an excellent value.
Features Of PancakeSwap
Coin collectors may find PancakeSwap a useful app for a variety of reasons. PancakeSwap uses the Binance Chain BEP-2. At $27 billion in daily trade values, Binance is the world’s most popular cryptocurrency exchange. Second, CertiK, a top smart contract security provider, has audited this platform. As a result, it is more reliable than DeFi projects that have not been audited.
There are no intermediaries on PancakeSwap, so you can exchange tokens or cryptocurrencies without losing control of your tokens. Even though PancakeSwap is hosted on Binance, it is independent of the exchange. Uniswap or Ethereum DEX is a good analogy for how the service works.
PancakeSwap is specifically designed for the Binance Smart Chain’s BEP-20 tokens. Binance Bridge, on the other hand, allows you to transfer tokens from other exchanges. To use them on PancakeSwap DEX, you can ‘wrap’ them as BEP-20 tokens from there.
To facilitate crypto trading, PancakeSwap employs an automatic moneymaker (AMM) methodology that depends on user-fueled liquidity pools. In exchange for their money, users receive tokens from the liquidity provider/LP. In return for locking your tokens in the liquidity pool, you can earn prizes or recoup a portion of your trading expenses with the use of these tokens. You may also use the tokens to exchange for the coins you choose.
After putting your LP tokens in the liquidity providers pool, you will receive CAKE as your first reward. Staking CAKE tokens for SYRUP will now be possible. Using SYRUP tokens, you can gain additional features like governance tokens and lottery tickets.
One of PancakeSwap’s other advantages is that it provides game-like experiences. For instance, you might bet on whether the price of Binance Coin (BNB) will climb or decline within a certain period. Lottery tickets might be purchased to win a large amount of CAKE.
To make use of PancakeSwap, you’ll need a cryptocurrency wallet of your own. Math Wallet, Trust Wallet, Binance Chain Wallet, and MetaMask are all supported by the decentralized insurance platform. Even though MetaMask is a wallet for Ethereum, it may be set to function with Binance’s Smart Chain.
The colony is a community-driven investment fund with an eye toward the future. Because the Avalanche Foundation has already invested in and provided support for this project, it is effectively an Avalanche-funded endeavor.
For the most part, an organization’s core functions are supported by the Colony ecosystem, which consists of smart contracts. In addition to finance, this project addresses the ownership, structure, and power of online groups.
To use Colony, you must buy the tokens and move them to your wallet that supports the Colony protocol. Tokens will be used to transfer money from one place to another. If you’re moving money, you’ll want to find a network that has the lowest rates. In addition, make sure you choose the proper network. To avoid falling victim to a scam, it is best to conduct some background research first.
You’ll find a variety of services on the network, including a decentralized exchange (DEX). As an alternative, you can offer liquidity in exchange for interest or lend funds and charge interest. There is no end to the possibilities. To access your account, simply connect your DeFi-compatible wallet to a suitable network and log in.
Features Of Colony Lab
The CLY token from Colony drives the Avalanche ecosystem accelerator built by the Colony community. Avalanche-based projects will receive financing through this initiative. Avalanche DeFi Protocols will also benefit from this. Avalanche and future subnet tokens are acquired and staked by the colony (AVAX). Avalanche projects are also purchased to create an index.
It is planned that Colony and Avalanche will exchange deal flow to provide the framework for project-building on the platform. This project’s most important aspect is that it’s community-driven.
It is important to keep in mind that Avalanche’s ecology is geared around DeFi’s advancement. Decentralized exchanges and a more democratic financial system will be achieved via the Colony project, which will assist Avalanche to fulfill its goals.
One of the reasons for this is that the Avalanche network’s Colony protocol provides an incentivized foundation for new decentralized apps. Despite the importance of financial support, the long-term success of the Colony will be determined by the company’s marketing efforts, momentum, technological expertise, and network.
The colony now has two pillars that work together. Institutions and their investors previously had no way of becoming involved in projects at an early stage. To ensure the project’s rigorous investment procedure, Colony has assembled a team of crypto industry specialists. Using a detailed research note, these equities specialists will look over and rate potential investment opportunities.
DAO (Decentralized Autonomous Organization) is the second pillar. Its key goals are to increase the Avalanche ecosystem’s liquidity and use staking to improve the network’s health and security. Additionally, this pillar is aimed to reflect Avalanche’s increase in DeFi assets through a specialized index.
Overall, Colony connects DeFi with traditional finance to leverage wealth creation on the Avalanche network through its members and community.
With the Graph (GRT), you may search and index data from blockchains without having to go through a central server. It works in the same way that Google indexes material on the internet to make it easier to find. Since blockchains like Ethereum and Filecoin are being indexed by The Graph, this is a comparable situation.
The Graph had previously only been able to index Ethereum. Nevertheless, since the NEAR blockchain has been able to test it, it is now functioning on blockchains that are incompatible with the Ethereum blockchain.
Features Of The Graph
In the Graph, the data is organized into subgraphs, which are open APIs. The Graph QI API makes it simple for developers to query the data via this method. It offers the necessary data for DeFi applications, such as DEXs, to operate well because it is easy to obtain.
The Graph Foundation continues to give funding to initiatives that use it as a foundation. Grants for the expansion of The Graph on blockchains other than Ethereum will still be issued. For DeFi, subgraphs can be combined to build a global graph that contains all of the world’s publicly available information. To make this data available to as many users as possible, it can be altered, structured, and shared among apps.
The Graph provides a solution to the problem of developers having to pick between efficiency and decentralization. GRT now makes it possible for applications and blockchains to exchange data in real-time. GRT has now processed more than a billion requests since it was launched in 2020, an impressive achievement. According to the network, if DeFi takes over centralized finance, it will be necessary to have an easy way to query the data needed to construct these new entities.
Thanks to the power of the Ethereum token, the Graph has been able to provide additional levels of screening to blockchains that enable smart contracts. The indexing of data from Ethereum and POA, as well as IPFS, is also supported. Aragon, Gnosis, Synthetix, and many more decentralized applications (dApps) have launched more than 1,700 subgraphs.
Currently trading at $0.4383, GRT had a trading volume of $161,242,246 in the last 24 hours. By 2026, The Graph expects to see a +212.52 percent rise in revenue.
Smart contracts were first introduced by Ethereum. Since then, however, it has been plagued by traffic jams and exorbitant transaction fees. It has led to the development of numerous options that offer speedier transaction processing at reduced costs.
Fantom, an open-source smart contracts platform for dApps and digital assets, is one of the alternatives. Synthetic asset borrowing, lending, and trading have never been easier thanks to this platform. You only need to open your digital wallet, deposit tokens, and start making money right away!
Features Of Fantom
A network architecture that solves the blockchain trilemma is driving Fantom’s rise. Its goal is to strike a balance between centralization and decentralization while yet maintaining security. The platform is lightning-fast because of a consensus method called Lachesis that is exclusive to it. Transactions are practically instantaneous because of this. Since the blockchain is smart contract enabled, it is an ideal platform for developing decentralized applications (dApps).
In a matter of seconds, Fantom’s transaction processing ensures that transactions are resolved. It can process tens of thousands of transactions per second for pennies on the dollar. In May, Fantom platform transactions reached three million for the first time.
As a key player in the emerging field of decentralized finance (DeFi), Fantom operates independently of any central authority. Its aBFT (Asynchronous Byzantine Fault Tolerant) POS consensus method links its infrastructure together. As a result, it can maintain the network’s operational efficiency.
Fantom is used for payments thanks to its high throughput and speed. It is also ideal for on-chain governance and governance activities. By this, it means that if you own tokens on the FTM network, you will be able to vote on improvement proposals, propose changes, and carry out decisions using on-chain governance.
Fantom is suitable for staking rewards. Here, you will be able to earn a minimum Annual Percentage Rate (APR) of 3.79% up to a maximum of 11.59%. The APR depends on the amount of FTM you have staked and the total lock-in period.
Furthermore, Fantom is also used for network fees and compensating validators. Although the rate is significantly low, Fantom pays transaction fees and the changes needed to create new networks and smart contracts.
DeFi has many advantages, one of which is the elimination of middlemen and brokers. There are no restrictions on who can use dApps or build DeFi, making it a better financial instrument in nations where the banking system is still underdeveloped.
Despite its many advantages, it has failed to become a popular phenomenon. People may not be using these sites as much because they may not have regular access to them. Companies and monetary authorities in the conventional financial system are still wary of incorporating the new technology. If you want to be a part of the future, you need to be able to deal with multi chains.