The Top 5 DeFi Projects & Coins To Watch Out For

DeFi is leading the charge in the cryptocurrency space in 2020, positioning itself as arguably the next big buzzword after the blockchain itself. Here are 5 DeFi projects and coins that have the potential to explode. Let’s make sure that you’re ready for the next bull run, shall we?

KNC (Kyber Network)

Kyber Network is a tool built primarily for Ethereum but one that can be incorporated into any smart contract-based blockchain. It allows swapping of tokens without the use of exchanges and enables vendors to accept any cryptocurrency while still being paid in the cryptocurrency of their choice. The decentralized exchange Kyber Network is a project that many were bullish on during the last market peak. It’s an exchange that is focused on rapid on-chain execution with over $74 million of daily trade volume for the KNC token, and over $280 million liquid market cap. With an original all-time high of $6 back at the start of 2018, KNC is still down overall but seeing strong growth potential moving forward. An interesting mechanism here is that when people use Kyber Network, their fees are used to burn a KNC. By burning KNC, the overall circulating supply is reduced and thus the value of the KNC token increases. In addition, KNC has upgraded to the Katalyst protocol which introduced a DAO (Decentralized Autonomous Organization) called KyberDAO, essentially enabling KNC to be used for voting protocol governance decisions and making the exchange fully decentralized.

LEND (Aave)

Aave is an open-source and non-custodial protocol enabling the creation of money markets. Just like any DeFi project, users are able to earn interest on deposits, and borrow assets. In other words, this project allows one to create passive income as well as get loans. The project is run on the Aave protocol which integrates what they call flash loans. According to the website, flash loans are the first uncollateralized loan option in DeFi. Flash loans enable you to borrow instantly and easily without any collateral, provided that the liquidity is returned to the pool within one transaction block. If this does not happen, the whole transaction is reversed to effectively undo the actions executed until that point. This guarantees the safety of the funds in the reserve pool. Use-cases include arbitrage, collateral swapping, self-liquidation, and much more. This is innovation at its finest because this can help the entire cryptocurrency space to grow massively. You can trade AAVE (LEND) on Delta Exchange with 20x leverage.

SNX (Synthetix Network)

Synthetix reached an all-time high in 2020. It’s a 2018 project that did not start moving upwards until the end of 2019. It was on quite the run until the March 2020 crash thrust the price back down. Eventually, the project tore through all-time highs and went back on its one-way upwards trajectory. Synthetix is a protocol for exchanging synthetic assets on Ethereum. It do this through what it call synths. Synths provide users with not only the ability to get exposure to assets like Bitcoin in fiat currency and forex commodities, but also (eventually) to stocks like Apple and Tesla. The merging of traditional markets with crypto is beginning, and this could be just the start for SNX.

REQ (Request Network)

Expect the Request Network to rise from the dead. Similar to the Kyber Network, Request Network allows people to pay in crypto, as well as accept crypto for online retailers. You can post peer-to-peer invoice requests while keeping control of your financial data. While it’s been not in a great position on the top 100 of the market cap charts, we’ve seen DeFi project after DeFi project bust out of these accumulation zones and reward long-time Hodlers. But for the long term Hodler, it’s going to be a while for them to get back to even for a lot of these DeFi projects. REQ may well be the next one to pump. Keep an eye out and wait for a nice dip, perhaps?

HOT (Hydro Protocol)

Once again, we’re looking at a 2018 DeFi project here. According to the website, Hydro empowers DeFi developers to create dynamic marketplaces for decentralized assets. You can even launch your decks in minutes, with the Hydro software development kit. Another reason for this pick is that it is a fork of the 0x protocol or the ZRX. This is a project that was incredibly bullish at one point, and for various reasons, it didn’t show potential after a while. 0x has shown a resurgence though, over the post-Covid months of 2020 due to the increased interest in DeFi, and it could be HOT’s turn. Right now it’s relatively low on the charts, so there’s plenty of room to go. If you look at the market chart, it’s well within an accumulation zone and is now picking up steam, even doubling in one day recently.

Which DeFi Crypto Coins To Buy

All in all, all these DeFi projects are super interesting. However, you have to be aware that putting trading these DeFi projects is a bet on Ethereum 2.0 itself. Here’s a truth about most of these DeFi projects, though: they were way ahead of their time when they were launched. The term DeFi didn’t even exist when these projects were dreamt up. A large section of the market did not truly understand why protocols allowing people to exchange assets without going through exchanges was a big deal. Some of these projects (especially the ones that may not be in an accumulation zone) can be high-risk and you should approach them appropraitely. That said, projects do have the possibility to have massive gains. Here’s wishing that you find the joy of crypto gains!

Frequently Asked Questions (FAQs)

Q1: What is the Kyber Network (KNC)?

Answer: Kyber Network rebranded to KyberSwap in 2021 as it moved toward an AMM model. In November 2023, a smart contract exploit drained roughly $48M across multiple chains, severely damaging TVL and user trust. KNC activity has stayed subdued since.

Q2: How do Aave flash loans work?

Answer: Flash loans are uncollateralized and must be borrowed and repaid within a single Ethereum transaction. If repayment fails, everything reverts automatically. They are used for arbitrage, liquidations, and collateral swaps, strategies that Delta Exchange traders often combine with derivatives positions.

Q3: What are Synthetix synths?

Answer: Synthetix synthetic assets (synths) are on-chain representations of real-world assets, backed by SNX collateral. They give traders price exposure to commodities, fiat currencies, and crypto indices without holding the underlying, entirely through non-custodial smart contracts.

Q4: What does the Request Network do?

Answer: Request Network (REQ) is a protocol for creating and auditing on-chain payment requests and invoices. Since launch it has focused on DAO treasury management, Web3 payroll, and B2B invoicing for crypto businesses that need auditable financial records.

Q5: What is Hydro Protocol (HOT)?

Answer: Hydro Protocol aimed to combine order book and on-chain liquidity models but faded as AMM-based DEXs like Uniswap took over. The blog section covering HOT is effectively obsolete and needs a full replacement with current DEX landscape data.

Q6: Why is DeFi linked to Ethereum 2.0?

Answer: DeFi runs mostly on Ethereum, so network upgrades directly affect scalability and costs. The Merge in September 2022 cut energy use by roughly 99.95%. EIP-4844 (Dencun) in March 2024 slashed L2 fees, opening DeFi to far more users.

Q7: Are DeFi projects high-risk investments?

Answer: Yes. Smart contract bugs, oracle manipulation, and governance attacks are real. Major exploits include the Ronin bridge ($625M, 2022) and KyberSwap ($48M, 2023). On Delta Exchange, traders can access DeFi tokens via derivatives with defined leverage and limited downside.