Right now, most DeFi protocols and applications are based on Ethereum. Ethereum is an advanced version of the technology and concept behind Bitcoin. DeFi, short for decentralized finance, is a broad term for peer-to-peer financial services on public blockchains, mainly Ethereum. As is the case with cryptocurrencies in general, DeFi is global, peer-to-peer (that is, directly between two people, not sent through a centralized system), anonymous and open to all.
DeFi tokens represent a wide range of cryptocurrencies native to automated and decentralized platforms that operate through smart contracts. While cryptocurrency market trackers, such as CoinMarketCap and CoinGecko, group all DeFi-related projects into the same category, they can be further divided based on the governance tokens offered by some DeFi protocols.Ethereum is the most popular blockchain for DeFi protocols and applications. It has the largest number of projects and users in the space. However, other blockchains are also gaining traction in the DeFi space.
For example, Binance Smart Chain (BSC) has seen a surge in popularity due to its low transaction fees and fast transaction times. Other blockchains such as Cardano, Polkadot, Tron and EOS are also gaining traction in the DeFi space.The most popular DeFi protocols are MakerDAO, Compound, Uniswap and Aave. MakerDAO is a decentralized lending platform that allows users to borrow against their crypto assets as collateral. Compound is a decentralized lending platform that allows users to earn interest on their crypto assets.
Uniswap is a decentralized exchange that allows users to trade tokens without having to go through a centralized exchange. Aave is a decentralized lending platform that allows users to borrow against their crypto assets as collateral.In addition to these protocols, there are also many other projects in the DeFi space such as Synthetix, Curve Finance, Balancer and Yearn Finance. These projects offer different services such as synthetic asset trading, liquidity pooling and yield farming.