Decentralized finance protocols have built a parallel financial system on public blockchains. Instead of banks and brokerages, smart contracts handle lending, borrowing, trading, and asset management. The tokens listed here govern these protocols and, in many cases, capture a share of the fees they generate.
Uniswap pioneered the automated market maker (AMM) model, letting anyone trade ERC-20 tokens without an order book or intermediary. Aave and Compound created the lending market, where depositors earn variable interest and borrowers put up crypto collateral to access loans. Maker took a different path, creating DAI, a decentralized stablecoin backed by crypto collateral and governed by MKR holders.
The DeFi sector has expanded well beyond basic swaps and loans. Curve specializes in stablecoin and like-asset trading with minimal slippage. Synthetix enables synthetic asset exposure to stocks, commodities, and forex on-chain. Pendle introduced yield tokenization, letting traders speculate on or hedge future yield rates. GMX and dYdX offer decentralized perpetual futures trading, competing directly with centralized exchanges.
Liquid staking has emerged as the largest DeFi subsector by TVL. Lido controls the majority of staked ETH, issuing stETH tokens that holders can deploy across other DeFi protocols. Rocket Pool offers a more decentralized alternative with lower minimum staking requirements.
Cross-chain DeFi is growing through protocols like THORChain, which enables native asset swaps between Bitcoin, Ethereum, and other L1 chains without wrapping or bridges. Jupiter has become the dominant aggregator on Solana, routing trades across multiple DEXs for optimal pricing.