Best DeFi platform: DeFi Trading & Investing Guide

In the constantly evolving world of finance, the buzz around decentralized finance (DeFi) is growing, making it imperative for investors to know which platform stands out as the best DeFi platform. As an innovative alternative to traditional banks, DeFi services offer peer to peer financial interactions, revolutionizing the financial sector by utilizing blockchain technology to eliminate intermediaries. This comprehensive DeFi Trading & Investing Guide for the best DeFi platform is designed to navigate both novice and experienced investors through the intricacies of trading digital assets in the DeFi space.

Best DeFi platform: DeFi Trading & Investing Guide

Gain insights into liquidity pools, decentralized lending platforms, and other decentralized financial services that are transforming the financial landscape. With DeFi, users can trade digital assets without the need for an order book, earn interest with impressive annual percentage yields, and have access to long-term financial growth beyond traditional financial institutions.

The emergence of DeFi platforms is providing DeFi users with unmatched freedom and opportunities, challenging the status quo of financial services such as lending and borrowing. 

In this guide, explore the numerous benefits of participating in DeFi, from enjoying more favourable loan terms to accessing a global trading platform free from the constraints imposed by conventional financial entities.

So, are you ready to dive deep into the world of DeFi, where traditional boundaries are blurred and financial empowerment is in the hands of the people? 

Arm yourself with knowledge and make informed decisions to maximize your investments and harness the full potential of decentralized financial services. 

This guide stands as your comprehensive companion, providing you with all the necessary tools and information to flourish in the exciting world of DeFi. In the final section, you will find tips for selecting the best DeFi platform for you. Let’s get started.

Best DeFi platform in 2023

UniSwap

UniSwap is the leader in decentralized platforms for anonymity.

If you are searching for the top DeFi platform with the highest amount of trading activity, UniSwap is the perfect choice for you. According to CoinMarketCap, a trusted source, Uniswap witnesses a staggering 4 billion in trading volume on a daily basis. This is what sets Uniswap apart as the leading decentralized exchange (DEX) in the DeFi market. 

Uniswap operates as an Automated Market Maker (AMM), meaning it is fully decentralized and enables seamless exchanges and interest generation through smart contracts. With Uniswap, users can easily swap different tokens or invest their assets in liquidity pools, with the added benefit of earning dividends similar to or better than the best dividend stocks in traditional markets.

Uniswap operates on the Ethereum blockchain, enabling the inclusion of a vast range of tokens. 

Users can engage with the platform without the necessity of registering or disclosing personal details, ensuring anonymity throughout the transaction process. 

In addition, users can purchase Uniswap’s native token, UNI, to vote on the various governance proposals, particularly those relating to the development of the project.

Uniswap charges a 0.3% fee on all transactions. These are distributed across all of the platform’s liquidity pools. 

However, users have to deal with sometimes significant gas fees when the Ethereum blockchain is congested. Once this is taken into account, Uniswap is one of the most secure and reputable solutions in the DEX industry.

Key Features

Number of tokens supported 400+
Fees 0.3% commission per transaction
A wide choice of ERC-20 tokens
No registration required
Minimum deposit N/A

Benefits

Support for a wide variety of ERC-20 tokens
Guarantee of anonymity
Many crypto wallets are compatible
Very significant liquidity

Disadvantages

Gas fees can spike when Ethereum is congested.

PancakeSwap

If you’re interested in purchasing cryptocurrencies, one of the most popular DeFi exchanges to consider is PancakeSwap. This DeFi platform is particularly beginner-friendly and offers a fast and effortless user interface. It allows for quick token exchanges within seconds. Similar to DeFi Swap, it’s built on the BNB Chain. Pancake will be operating from September 2020.

There is extensive support for various tokens, which can be searched for or manually added using the token contract. Numerous crypto wallets, including Binance Wallet and Metamask, are compatible with PancakeSwap.

Regarding fees, PancakeSwap takes a 0.25% commission on trades. The commission is divided between the platform and liquidity pools.

A portion is used to buy CAKE, the native token of the DEX, and then burn it. Apart from token swapping, PancakeSwap has in offer “Syrup Pools” which enable staking of CAKE and obtaining a return on your investment in CAKE or in the form of another token.

This decentralized platform also offers some more original features, like the PancakeSwap lottery. 

This makes it one of the most popular crypto lottery platforms where users can purchase a ticket for a chance to win a jackpot worth over $90,000. 

However, there is always a risk of loss to consider in PancakeSwap liquidity pools. The DEX, nonetheless, remains one of the best DeFi exchanges today.

Key Features

“Syrup pools” for staking
An original lottery feature
Minimum deposit N/A

Benefits

Reduced commissions
A user-friendly interface
Over 4 million active users
A large number of tokens are available

Disadvantages

The risk of fleeting loss

SushiSwap

SushiSwap is a crypto DEX that has become a pillar of the thriving decentralized economy. Based on Ethereum, SushiSwap is a DEX and automated market-making (AMM) platform that aims to offer users more unique ways to generate passive income.

Users are able to trade, earn, stack yield, lend, borrow and leverage their digital assets on SushiSwap. 

The platform aims to become a more cost-effective DEX than UniSwap. As a result, SushiSwap rewards SUSHI token holders with 0.05% of all trades as governance rights. The platform operates on 14 blockchains, making it a multi-chain AMM protocol.

Key Features

Number of tokens supported 400+
Fees 0.3% commission per transaction
Rewards for SUSHI holders
Large selection of blockchains
Minimum deposit N/A

Benefits

Low transaction fees
Earning Rewards by Holding SUSHI Tokens
Several blockchains available
Attractive returns

Disadvantages

Often considered a copy of UniSwap.

1inch

Another major DeFi platform is 1inch. 1inch stands out from the rest on this list as it functions as a DEX aggregator. Essentially, it picks out the most optimal choices from the DEXs available, ensuring that users can make swaps with minimal fees.

Sometimes, this involves trading your token through multiple platforms to benefit from the safest and lowest fees. The strong point of this platform is that this service is free. 1 inch does not charge a fee for this process. However, there may be fees with partner platforms during the swap.

1inch is recognized as a top-notch altcoin trading platform that extends its support to various blockchains. Users have the ability to trade tokens from Avalanche, Ethereum, BNB Chain, Polygon, and other chains. Additionally, 1inch provides a “1inch Earn” feature that enhances liquidity pools and ensures more consistent profits.

Finally, the entire low-fee trading process set up by 1inch is easy to access and is ideal for beginners wanting to trade in a decentralized way.

Curve

To finish this list of the best DeFi platforms, we find Curve. If you are a fan of the world of cryptocurrencies, you probably already know Curve since it is one of the largest DEXs in the sector. 

The Curve protocol is built on Ethereum and is primarily aimed at holders of Stabelcoins wishing to trade them and enjoy attractive returns thanks to numerous liquidity pools.

Curve has a deliberately retro aesthetic, but this should not hide its innovative and efficient side. Swaps on Curve carry just 0.04% of fees, which are distributed among Curve’s liquidity providers and DAO members. In terms of asset selection, Curve supports over 45 tokens, including USDC, DAI, USDT and more.

Curve is the best DeFI exchange for generating returns on your stablecoins with a wide variety of liquidity pools. 

Some of the achievement rates of both figures, thus offering a more profitable alternative, much more than risky, to traditional banks. In addition, Curve supports many crypto wallets like WalletConnect, Trezor and Ledger.

You can also buy the CRV token, Curve’s native token, and stack it to obtain veCRV, which allows you to participate in the governance of the project and generate passive income by recovering part of the platform’s trading fees. Finally, now that Curve is available through Polygon, gas costs are reduced.

Key Features

Number of tokens supported 45+
Fees 0.04% commission per transaction
More than 45 stablecoins accessible
Polygon compatible for reduced gas costs
Minimum deposit N/A

Benefits

Reduced exchange fees
Possibility of generating dreams
naked liabilities by holding veCRV
Available through Polygon for reduced gas fees
Double-digit returns on many tokens

Disadvantages

Interest rates can vary greatly.

Key Features

Number of tokens supported 400+
Fees No fees (some used DEXs can be used by you as a manufacturer)
More than 400 accessible tokens
Find the best rates to make your Swaps
Minimum deposit N/A

Benefits

No hacks or loss of funds in its history
Over 400 tokens supported on multiple blockchains
The innovative “1inch Earn” process

Disadvantages

Unregulated platform

How to choose the best DeFi platform according to your needs?

Choosing among all these decentralized platforms can sometimes be complicated, especially if you are using these protocols for the first time. To help you in your decision, we present here the different factors to take into account to best choose your DEX.

The regulation

When it comes to making money with cryptocurrencies via DEXs, regulation is one of the most important things to keep in mind. These interfaces do not depend on a centralized authority, but they are still subject to surveillance by regulatory authorities, just like large centralized platforms. This is why opting for a regulated DEX can improve the security of your trading operations.

DeFi tokens you can trade

You should consider the variety of tokens offered. The number of tokens that the best exchanges offer you is also an element to take into account. 

A good example is that of DeFi Swap. This platform offers more than 50 cryptocurrencies. It includes popular assets like DAI and USDT and other more original ones like ALPHA or SPELL.

It is also interesting to choose an exchange that offers you a category of tokens that is relevant to you. For example, DEXs built on the Binance Chain (BNB Chain) will support BEP-20 tokens, while those built on Ethereum will manage ERC-20 tokens.

Fees

DeFi exchanges often charge fees to make a token exchange. However, the main difference is that these are often distributed back in one way or another. For example, this may involve distributing assets into liquidity pools for owners of the native DEX token.

Apart from protocol fees, you also need to keep an eye on blockchain fees. For example, DEXs hosted on Ethereum are more prone to significant gas fees when the blockchain is congested. This can make it an expensive experience to exchange tokens on this blockchain.

Features

Most exchanges have a wide range of features beyond just trading tokens. DeFi Swap, for instance, offers liquidity pools and staking. You can thus obtain the best interest rates by depositing your assets to generate returns.

Staking features are very important. It allows you to generate returns even if it involves locking your assets for a defined period. Apart from staking and liquidity pools, some DeFi platforms offer niche services. We can notably cite the lottery available on PancakeSwap. It enables clients to buy a ticket to try to win the jackpot.

Payment methods

Due to the decentralized nature of these platforms, they only accept payment via a crypto wallet, unlike centralized ones like OKX or Binance. You just have to install a digital wallet and configure it on the blockchain hosted on the DeFi protocol. You will be able to carry out your trades in a few seconds on DEXs in a very easy way.

However, this means that you must first own cryptos to be able to trade them. To do this, nothing could be simpler than registering on a platform to buy the crypto of your choice in just a few minutes. All you have to do is transfer it to your crypto wallet, and you will be able to access the DEX functionalities.

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