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The DeFi sector provides investors with exciting opportunities that were previously not possible. Every week, new products, features, and networks enter the market. Each platform promises better returns and a more comprehensive UX. However, not every DeFi platform pays out high staking rewards.
Rather than spending days combing through every new platform to determine the most profitable ones, professionals recommend you stick to reputable networks with proven results. These platforms have earned their reputations in the market through optimal ROIs and top-notch security. Here are the DeFi projects with top staking rewards in 2021.
MakerDAO made a name for itself by introducing blockchain technologies that allow borrowers to use volatile cryptocurrency as collateral for loans of stablecoins. Since its introduction, the network has grown to become one of the world’s largest Ethereum Dapps.
This decentralized lending protocol entered the market in December 2015 as the brainchild of CEO Rune Christensen. Interestingly, the network leverages a dual token strategy to accomplish its goals. The DAI stablecoin is the primary currency of the network. Users pay fees, collect rewards and lend out this stablecoin. The network provides both lenders and borrowers with DAI as a means of transparent collateral. Best of all, DAI holders earn interest on their savings when they use this network.
The second token in use in the MakerDAO ecosystem is the MKR governance token. MakerDAO is community-governed via a voting system. User’s votes are weighted depending on the amount of MKR tokens they possess. Consequently, everyone gets a say on future developments. Notably, MakerDAO recently made the “Forbes 50” list for its innovative approach to DeFi.
Compound is the network that launched the current yield farming craze. Compound first introduced its decentralized, blockchain-based protocol that allows you to lend and borrow crypto to the market in mid-summer 2020. The network's strategy was to offer users a small share of transaction fees for contributing liquidity to particular pools on Uniswap or Balancer.
Compound supports the borrowing and lending of a selection of cryptocurrencies at this time. Specifically, Dai (DAI), Ether (ETH), USD Coin (USDC), Ox (ZRX), Tether (USDT), Wrapped BTC (WBTC), Basic Attention Token (BAT), Augur (REP), and Sai (SAI) are available. Notably, anyone can borrow from the lending pools with interest and a deposit.
This deposit also works as collateral for your loan. It’s what's used to determine the total amount you can borrow as well. However, if the collateral’s value begins to drop, the protocol will automatically sell this deposit to cover your losses.
DYP introduces several benefits to the market that make it a top contender in terms of ROIs. The platform includes a variety of notable features such as mining pools and yield farming protocols. Impressively, DYP is the only platform to pay all rewards out in ETH rather than DeFi tokens. This feature is a huge draw for users who often need to convert their rewards into ETH on DEXs such as Uniswap. The removal of this step also removes the fees and delays associated with the process.
DYP is all about stopping market manipulation. The platform's developers created a proprietary anti-manipulation system that automatically converts the DYP rewards into ETH every day at 00:00 UTC. The system monitors the price of DYP tokens to ensure this action doesn't drop the token’s value. If the token’s value shows more than a 2.5% drop, the conversion rate will adjust to prevent further losses.
Recently, DYP launched its decentralized governance system. This feature works in tandem with the network’s anti-manipulation protocol. Specifically, DYP token holders vote on whether to burn or redistribute the extra DYP tokens not converted in the anti-manipulation process. In this way, DYP provides its community with real token value control measures.
Earlier in July 2020, Synthetix ranked at the seventh position in terms of market capitalization. However, the 2017 conceived protocol is continually growing to one of the best currently in existence. The project provides users with a synthetic asset issuance platform and a decentralized exchange platform.
Synthetic assets are commonly referred to as Synths, which are digital assets representing real assets such as physical goods, fiat currencies, stocks, or even cryptocurrencies. One of its significant features is the incentivized staking mechanism. It allows users to provide liquidity and maintain the platform.
The Synthetix ecosystem runs under the Synthetix Network Token (SNX), available on different exchange platforms. Users can deposit the tokens and use them in staking. In recent months, the SNX token has seen a surge, with its value shooting from $0.79 to $3.32 between June and July 2020.
It is forecasted that 250 million tokens will be minted by 2025. The platform remains protected from price swings through its high collateralization rate.
Yearn Finance launched in February 2020 as a liquidity aggregator providing automated yield farming services. Andre Cronje created this open-source DeFi lending protocol to maximize ROIs via interoperability. Specifically, Yearn circulates your locked crypto to get the best interest rates. The network switches these funds between DeFi lending protocols like Compound, Aave, and dYdX.
The platform uses select smart contracts known as Vaults that allow users to utilize any asset as liquidity. This strategy permits investors to use liquidity as collateral and manage collateral safely to avoid a default. The network also enables you to lend and borrow stablecoins with interest.
Lastly, you can yield farm with these stablecoins directly from the platform’s interface. Lenders enjoy competitive rewards and the ability to reinvest their earnings into the other products offered by Yearn. As such, Yearn users get a high level of flexibility in the market.
When it comes to determining the best staking rewards, a lot comes down to your strategy. DeFi is diverse, and you can earn profits in many different ways nowadays. These platforms excel in their efforts to provide new and exciting ways to increase your staking rewards.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect Crypto Adventure’s position. The analysis performed in this article is only for educational and informational purposes. The author of this post may or may not own any of the tokens mentioned.