Hottest Decentralized Finance (DeFi) Projects on Ethereum: The Top 5 Picks in 2024

From ETFs to Bitcoin halving and the growing promise of AI and VR tokens, 2024 is set to be a big year for the crypto industry.

Now, more than ever, traders are searching for market dips or upcoming rallies to diversify their crypto portfolio against market volatility. Ethereum projects have become quite popular recently, particularly when it comes to decentralized finance (DeFi). 

In fact, five of them are trending right now.

Uniswap (UNI)

With its groundbreaking approach to DEXs, Uniswap has become a dominant player in the decentralized finance (DeFi) scene. As an anchor for liquidity, it provides pools comprising pairs of two tokens. Uniquely flexible, Uniswap works on Ethereum and can connect to ten other chains as well.

With changes and new features planned for the “Mainnet 2024” project, Uniswap’s future looks bright. 

Using the native UNI, users can voice their opinions on key decisions, get a share of the overall fees, and be part of the platform’s community treasury, which supports the UNI protocol.

Uniswap’s Unique Points

Smart AMM

For trading, Uniswap uses a smart AMM strategy. To facilitate transactions outside of the conventional order books, liquidity providers (LPs) contribute tokens to public pools. Users can easily trade a huge number of Ethereum-based coins. 

V4 Hooks

By hooking smart contracts to liquidity pools, developers have great flexibility in adding certain features at different times in a pool’s lifecycle.

Direct ETH Trading 

Users will have a better experience with V4 because it lets them trade directly with native ETH, so they don’t need WETH (Wrapped ETH). Naturally, trading has become more efficient and cheaper.

Aave

Borrowing and lending are two areas where Aave shines most. By contributing their assets to the Aave liquidity pools, each crypto participant has the opportunity to earn interest. 

These are also the pools that people can use to borrow at very low rates. The native ERC-20 AAVE gives token holders the right to governance while also serving as a staking token. 

Just recently, Aave made the headlines by surpassing giants like BTC and ETH in the amount of fees generated in a day. With such a level of adoption, the team behind Aave decided to reveal a strategic plan for 2030. The roadmap includes several essential milestones, such as unveiling Aave V4, a new brand image, and advanced DeFi functions.

To encourage participation and investment in its ecosystem, the protocol is reportedly preparing to introduce a fee switch, allowing token holders to earn a share of the fees.

Aave’s Unique Points

Flash Loans

The innovative loan plan targets crypto-savvy traders who can receive uncollateralized loans and repay them in the same transaction block, or in a “flash.”

Fee Switch

With this tool, platforms can basically turn on or off certain user fees. It’s possible that the fees made from deals would be given to platform users again, particularly AAVE token holders and stakers. 

aTokens

They serve as collateral for loans and earn real-time interest for lenders, making platform assets more valuable and liquid.

Lido

Besides being one of the hottest dApp projects, Lido is also one of the top DeFi projects on Ethereum in terms of TVL.

Through its staking “pools,” Lido enables users to stake their LIDO tokens. Since the pools are liquid, investors may remove their coins from the pool whenever they choose. Token holders can have a say in the protocol’s direction and vote on matters like staking incentives using the LIDO token.

The platform has recently started to offer DeFi 2.0 solutions to anyone interested in staking Ethereum 2.0. Typically, investors must spend a substantial amount of money—at least 32 ETH—to stake while using the Ethereum chain. With Lido’s DeFi 2.0 mechanism, traders are free to stake their preferred amount using this DeFi 2.0 protocol.

Lido’s Unique Points

Liquid Staking Protocol

As soon as a user stakes their tokens, they may begin earning rewards and getting liquid rewards back. They can also unstake at any time.

Lido DAO

At its core, Lido is a governance platform that allows stakeholders to have a say in protocol settings and upgrade decisions. This paves a democratic path forward.

DeFi 2.0

Users are free to stake whatever amount they choose using this system. The platform also stakes the coins right on the Ethereum chain.

5th Scape

5SCAPE has made a huge splash by promising to integrate VR and DeFi. This VR/AR setting allows gamers to immerse themselves in the action.

When people buy the token, they can access a wide range of VR materials and games, such as the MMA game Cage Conquest (coming out in Q2 2024), educational materials, and popular movies.

Capitalizing on a sophisticated virtual world, 5th Scape wants to provide entertainment and educational content in both crypto and metaverse.

As of now, the crypto project has raised above $5.7 million, all thanks to massive community support. However, the 5SCAPE value is still not close to its $0.01 listing price. 

5th Scape’s Unique Points

The metaverse promise

The platform promises to simplify the metaverse experience. Participants can easily join; players only need to buy and hold tokens to gain entry to the platform, where they can play games and stream free of charge.

Priority access to VR equipment

Token holders will get access to affordable, high-tech VR gear that will enhance their gaming experience.

Massive community support

Crypto Whales and regular investors have greatly pushed the project forward.

InQubeta

InQubeta is marching on another DeFi frontier by combining the best of AI and DeFi. Authorities at DeFi have already praised the company’s decision to use Ethereum as its blockchain. The major selling point for InQuebta is its simplicity. 

The platform also helps startups raise money by having a market for NFTs. Each NFT is equal to a share of ownership or an incentive in an AI project. 

To do so, QUBE token holders browse and purchase NFT assets, diversifying their crypto portfolio and providing funds for the startups. When the NFT sale is over, the buyers get a piece of the company’s stock, and the startups get the money. 

InQubeta’s Unique Points

Startup bedrock

Through its active group of seasoned pros, InQubeta allows startups to find the right consultation. Entrepreneurs can get mentoring, accounting, or marketing assistance from experts in the field. 

Special reward pool

To reward stakers, InQubeta has set up a different pool of awards that is restocked by taxes on QUBE transactions.

Deflationary in nature

In addition to shifting the supply/demand balance, InQubeta protects the token’s value against potential volatility impacts.