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Decentralized Finance (DeFi), one of the emerging industries in the blockchain world, uses a blockchain-based protocol to do away with intermediaries like banks and financial organizations from all financial transactions.
Let’s learn about this concept and the top DeFi coins to look out for in December 2022.
What is DeFi?
Financial services provided on open blockchains, especially Ethereum, are referred to as DeFi (or “decentralized finance”). Earning interest, borrowing money, lending money, purchasing insurance, trading derivatives, trading assets, and other activities are all possible with DeFi; the process is quicker and doesn’t involve any formalities or a third party. In addition, DeFi is universal, peer-to-peer (meaning between two users, not routed through a centralized system), pseudonymous, and available to everyone, much like cryptography in general.
Advantages of DeFi
- Open: You don’t have to “open” an account or apply for anything. By creating a wallet, you can simply gain access.
- Pseudonymous: Your name, email address, or other personal data is not required.
- Flexible: You don’t need to wait for lengthy transfers to finish, seek permission, or pay exorbitant fees to shift your assets anywhere at any time.
- Fast: Interest rates and incentives can be much greater than on traditional Wall Street and often update quickly (as rapidly as every 15 seconds).
- Transparent: All parties can view the complete list of transactions (private organizations rarely provide that type of transparency)
The DeFi project offers customers several financial services that are typical of conventional financial institutions, such as loans, lending, and insurance.
Since not all crypto projects on the market offer these financial services as part of their portfolio, DeFi projects are regarded as a crucial component of every diversified investment strategy.
Keeping up with the top DeFi projects in such a dynamic blockchain ecosystem might be challenging. We performed in-depth research for you to identify the best DeFi projects to invest in for December 2022.
Let’s have a look at a few of them.
5 best DeFi coins to invest in December 2022
#1 PancakeSwap
PancakeSwap is a Decentralized Exchange (DEX) project based on the BNB chain that enables users to swap BEP-20 tokens quickly and affordably. Given its token value, it has shown strong growth and is unquestionably an excellent investment. The project’s native coin is called the CAKE token.
On PanCake, you can trade NFTs on its NFT Marketplace, swap BEP-20 tokens, stake cake tokens in syrup pools, and lend and create liquidity on the Automated Market Maker (AMM).
PancakeSwap is extremely safe to use from a security standpoint; it has never been compromised. The only dangers associated with implementing a pancake swap exchange are the potential for temporary losses and field scams.
#2 Lucky Block
A new DeFi coin to keep an eye on is Lucky Block, whose project uses blockchain technologies to offer a platform for play-to-earn and prize draws. Through smart contracts and the Binance Smart Chain (BSC), Lucky Block intends to promote transparency through its platform for international prize draws.
The native digital token, LBLOCK, is at the heart of this ecosystem. Users with LBLOCK tokens can purchase tickets with no transaction fees and receive immediate payouts on daily jackpot winnings.
One of the biggest Decentralized Exchanges (DEXs) in the DeFi industry, Pancakeswap, supports the currency.
#3 Decentraland
A virtual reality platform driven by the Ethereum blockchain is called Decentraland. Using MANA, Decentraland’s native token, users of the platform can buy, hold, and trade virtual real estate.
An ERC-20 token called MANA can be used to fund various in-game purchases as well as the ecosystem as a whole. MANA was one of the top-performing metaverse tokens in late 2021 in terms of performance.
#4 SushiSwap
SushiSwap, which debuted in August 2020, is yet another well-known DeFi project that offers a decentralized, community-driven platform for trading, earning, stacking, lending, and borrowing cryptos.
A Decentralized Exchange (DEX) called Sushi Swap operates on the idea of an Automated Market Maker (AMM). Users can trade crypto tokens, but no central authority oversees the transactions. Sushi Swap, in contrast, uses smart contracts to handle trades and automatically establishes the price using mathematical algorithms.
Its native token, Sushi, is an excellent choice for investment based on price forecasts. Moreover, Sushi can emerge as a market leader in the crypto industry thanks to its outstanding credibility and liquidity metrics.
#5 Cosmos
One of the best DeFi coins in 2022 and a distinctive DeFi project, Cosmos. The Cosmos network seeks to address the issue of blockchain interoperability, which enables communication across different blockchains.
Cosmos has provided a way for chains to share information and speed up transactions between them by using open-source tools.
The Cosmos hub, a Proof-of-Stake (PoS) blockchain that runs with the network’s digital token, ATOM, is where every new blockchain created is stored.
Bottom line
Despite the frequent launch of new DeFi coins, we believe them to be the most worthwhile investment. So you can pick one of the fascinating DeFi Cryptos described above as the year comes to an end. But, before investing, always DYOR!
Happy Trading!
Frequently Asked Questions
How To Invest In Cryptocurrency?
There are two ways of investing in cryptocurrency, mining and via exchanges. Cryptocurrency mining is considered the procedure of verifying and adding transactions to the blockchain public ledger. Another option is via cryptocurrency exchanges. Exchanges generate money by collecting transaction fees, but there are alternative websites where you can interact directly with other users who want to trade cryptocurrencies.
Is Pi Cryptocurrency Safe?
Pi Network captured the crypto community’s interest even before it officially debuted. Its innovative mobile mining approach and user-friendly design simplify crypto adoption for a broader audience. Some users see this as a chance to get engaged in the crypto from the beginning and profit in the future, similar to how early Bitcoin adopters made huge profits by mining and keeping the coin. Other users have compared Pi to a worthless multi-level marketing (MLM) scheme.
How To Invest In Cryptocurrency Stocks?
Cryptocurrency can be purchased in two ways: through mining or exchanges. The process of confirming and adding transactions to the blockchain public ledger is known as cryptocurrency mining. Cryptocurrency exchanges are another option. Exchanges make money by charging transaction fees, but there are alternative platforms where you may communicate directly with other cryptocurrency traders.
Is Cryptocurrency Banned In India?
No, cryptocurrency is not banned in India. India has seen its ups and downs in the crypto sector concerning its legal status. The Reserve Bank of India (RBI) issued a circular in April 2018 advising all organizations under its jurisdiction not to trade in virtual currencies or provide services to assist anyone in dealing with or settling them. A government committee proposed outlawing all private cryptocurrencies in mid-2019, with up to ten years in prison and severe penalties for anyone dealing in digital currency. The Supreme Court overruled the RBI's circular in March 2020, allowing banks to undertake cryptocurrency transactions from dealers and exchanges.
Is Crypto Legal In India?
Cryptocurrencies are legal in India, and anyone can purchase, sell, and exchange them. It is currently uncontrolled, as India lacks a regulatory structure to oversee its operations. Per the Ministry of Corporate Affairs, companies must now record their crypto trading/investments within the financial year. In cases where a person receiving the gains is an Indian tax resident, or the cryptocurrency is regarded as domiciled in India, cryptocurrency transactions have been taxable in India
Is Ethereum Safe To Invest?
The Bitcoin market is unquestionably more volatile than the stock market. This may not be the market for you if you are incredibly risk-averse. Ethereum, on the other hand, may be a terrific investment for you if you're a diamond-handed investor who won't lose sight of short-term losses. Ethereum is a relatively safe investment as it is also based on blockchain.
Is Mining Cryptocurrency Legal?
Cryptocurrency mining can be time-consuming, expensive, and sporadically profitable. Mining has an appeal for many cryptocurrency enthusiasts as miners are paid directly with crypto tokens for their efforts. The legality of cryptocurrency mining is dependent on where you live. In India, there is no restriction on crypto mining.
What Is Virtual Currency?
Virtual currency is a type of uncontrolled digital currency that can only be used online. It is exclusively stored and transacted using designated software, mobile or computer applications, or unique digital wallets, and all transactions are conducted through secure, dedicated networks. Because digital currency is just currency issued by a bank in digital form, virtual currency is not the same as a digital currency. Virtual currency, unlike ordinary money, is based on a trust structure and cannot be issued by a central bank or other banking regulatory organization.
What Is The Safest Cryptocurrency To Invest In?
Bitcoin has had the highest market capitalization, has been around the longest, has the most experienced development team, and has enormous network impact and brand recognition. As a result, while trading cryptocurrencies, the rate of return on Bitcoin is commonly used as a benchmark. However, the risks associated with cryptocurrencies remain, and the safest cryptocurrency for you depends on your analysis.
What Is Crypto?
Crypto or a cryptocurrency is a digital currency protected by cryptography, making counterfeiting and double-spending nearly impossible. Blockchain technology is used to produce cryptocurrencies (a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are distinct in that a government does not issue them. The word "cryptocurrency" refers to the encryption methods employed to keep digital currencies and the network secure.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
