Some of the top DEXs include Curve Finance, Uniswap, SushiSwap, Balancer, and Bancor. DEXs are where investors and traders can freely trade between various cryptocurrencies. What DeFi Categories Are Coins & Tokens Used For? 1 Decentralized Exchanges (DEXs)Ī large makeup of the DeFi market are decentralized exchanges(DEXs), which currently have $29 billion dollars in total value locked. The top DeFi cryptocurrencies by market cap and some of the more popular DeFi coins and tokens include Uniswap(UNI), Terra (LUNA), Avalanche (AVAX), Dai (DAI), and Aave (AAVE).
The difference between a coin and a token is that a DeFi coin runs on its own blockchain, hence, it is a native asset, while a DeFi token is a cryptocurrency token that is built on an existing blockchain, using a standard such as ERC (for the Ethereum blockchain), BEP, TRC, OMNI, SPL, etc. Difference Between A DeFi Coin & A DeFi Token This is what allows Bitcoin holders to get involved in DeFi. It can also be used in the DeFi marketplace for a variety of actions like trading, staking, and exchanging. However, Wrapped Bitcoin ( WBTC), on the other hand, which is a Bitcoin backed 1:1 ERC20 token, can be used on Ethereum platforms. This is because Bitcoin is not compatible with Ethereum, and thus it is not used on decentralized exchanges, liquidity aggregators, yield farming tools, and lending protocols. Is Bitcoin A DeFi Coin?Īlthough Bitcoin is technically a DeFi coin, mainly because it began the general diversification movement away from CeFi (centralized finance) to DeFi (through the use of a decentralized peer-to-peer payments network), it is no longer used in reference to pure DeFi. Because there are a plethora of DeFi services on the market, this also means there are an equivalent number of DeFi coins and tokens. More specifically, a DeFi coin is a cryptocurrency that is used on decentralized exchanges, in liquidity pools, for yield farming, lending, asset management, digital wallets, and NFTs. What Is A DeFi Coin?Ī DeFi coin is a cryptocurrency coin or token that is used to engage in the DeFi economy. For example, there are privacy coins to use anonymously, exchange tokens to use on central exchanges, stablecoins to use as a volatility hedge, and “DeFi coins” to use in decentralized finance activities. However, many of these cryptocurrencies have distinct purposes and functions.
Since Bitcoin’s creation, hundreds of new cryptocurrency coins have come to the surface. Thus, Bitcoin can be said to be the first “DeFi coin.” The first cryptocurrency item that maintained this core philosophy is Bitcoin. However, it now encompasses a multitude of financial products that are available on other public decentralized blockchain networks as well.Īt its core, DeFi applications seek to eliminate intermediaries in support of trustless, transparent, and immutable transactions between anonymous parties. Originally, DeFi referred to decentralized finance applications that run on top of the Ethereum public blockchain. Get The Latest News And Updates From Phemex! Subscribe
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