Crypto dapps are changing the game in the decentralized finance (DeFi) space. These decentralized applications are providing users with new and innovative ways to trade, lend, and borrow digital assets in a trustless and transparent manner.
And, best of all, they are very user-friendly, making it easy for everyone to get involved. Whether you're a seasoned crypto trader or a complete beginner, these applications are designed to be accessible and straightforward to use. So why wait? Lets know top crypto DApps in defi sector.
Top Crypto DApps
Uniswap is a decentralized exchange (DEX) that enables you to trade ERC-20 tokens with complete anonymity. It uses liquidity pools and an automated market maker (AMM) mechanism to determine the price of each token, and the exchange is powered by smart contracts that run on the Ethereum blockchain.
You can add liquidity to a pool by depositing an equal value of two different tokens, in return for pool tokens that represent their share of the liquidity pool.
Uniswap give you a very friendly interface that displays the current price, as well as the trading fees and estimated slippage. Slippage shows possible difference between the expected price of a trade and the actual executed price of that trade.
Uniswap also allow you to interact with non-fungible tokens (NFTs) by allowing you to trade NFTs on their platform.
Very few people knows it was actually developed by a 22-year-old software developer named Hayden Adams, who had no previous experience in finance. While working as a mechanical engineer, he built this decentralized exchange in his free time as a hobby, and launched it in November 2018.
Aave is a decentralized lending platform that allows you to lend and borrow cryptocurrencies without any middleman. Using Aave is simple, as you can connect your cryptocurrency wallet to the Aave platform and select the token you wish to lend or borrow. You can take out loans with collateral provided by you to Aave.
You can also earn interest on your deposited assets in a trustless and decentralized manner, without having to rely on banks or other financial institutions. Your money will used to provide loans.
Aave's decentralized architecture ensures resistant to censorship and downtime, as it is powered by smart contracts that run on the Ethereum blockchain.
Compound is another decentralized lending platform that allow you to lend or borrow cryptocurrency. You can lend your cryptocurrency assets to earn interest or borrow cryptocurrency by providing collateral with your deposited assets. This can be particularly useful for people who may not have access to traditional financing or who need to obtain funds quickly.
Compound's interest rates for each token are based on supply and demand, with rates changing dynamically based on market conditions.
MakerDAO is also a decentralized lending platform that operates on the Ethereum blockchain. This allow you to generate a stablecoin called DAI, which is pegged to the value of the U.S. dollar, by using another cryptocurrency as collateral.
So, imagine you have some cryptocurrency assets that you don't want to sell but you need some cash. MakerDAO enables you to lock up those assets as collateral and generate DAI, which can be used for anything you wish. While your collateral is locked up, you will earn interest on collateral as well. You can only use ERC-20 tokens as collateral which are approved by the DAO.
Looking for a decentralized exchange that's lightning-fast, efficient, and packed with a broad range of cryptocurrencies? Look no further than PancakeSwap! This dynamic platform is built on the Binance Smart Chain, now works with Ethereum and Aptos chains, giving you access to a vast selection of coins.
PancakeSwap has expanded to allow you trading of NFTs on the Binance Smart Chain, and you can even earn substantial rewards by providing liquidity to the platform.
Remember, never invest more than you can afford to lose because the crypto market is very unpredictable. But, if you're ready to take the plunge, crypto DApps offer some exciting opportunities to trade, lend, and borrow digital assets in a safe, transparent, and user-friendly way. These platforms are changing the game in DeFi, making it easier for anyone to get involved in the world of cryptocurrencies.
Frequently Asked Questions
1. What are smart contracts?
Smart contracts are computer programs that automatically execute the terms of a contract when certain pre-defined conditions are met. They are self-executing and operate on a blockchain network. The use of smart contracts eliminates the need for intermediaries and third parties, making transactions faster, cheaper, and more secure.
2. What is the difference between centralized and decentralized exchanges?
Centralized exchanges are operated by a traditional companies which controls the order books and matches buyers and sellers. Decentralized exchanges, on the other hand, operate on a decentralized protocols and allow you to trade cryptocurrencies in a trustless and transparent manner, without the need for a centralized authority.
3. How do pay off debts on decentralized lending platforms?
Lets say, if you deposited Ethereum (ETH) as collateral to take out a loan in DAI on MakerDAO, you would need to repay the loan using DAI or by converting ETH to DAI. The process for paying off a loan can vary depending on the specific platform.