Aspiring to get started with Decentralized Finance (DeFi)? Here are the top DeFi tools that will prove an important resource in your DeFi learning.
Financial services are an important requirement for individuals and institutions all over the world. However, billions of people still don’t have access to financial services. Even in the age of digital transformation, where we can witness internet accessibility increasing profoundly, financial inclusion appears to be a myth.
This is where the concept of decentralized finance (DeFi) comes into the picture. Many people are searching for the best DeFi tools to start venturing into the uncharted yet promising territory. Can DeFi create a new financial ecosystem or replace the traditional banking and financial institutions altogether?
If you want to capitalize on the DeFi trend, then you need to know the tools that can help you accomplish different functions in DeFi. The focus on decentralized finance tools is essential for individuals planning on introducing DeFi solutions. The following discussion offers you an insight into the top tools for DeFi, along with their clear descriptions.
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What is DeFi? – Understanding the Basics
The most important thing before learning about top DeFi tools is an understanding of DeFi itself. Decentralized Finance or DeFi is basically the practice of deploying financial software and applications on the blockchain. It can enable a completely new approach to banking while offering all the services that a conventional bank offers.
Although DeFi supports all crypto platforms, Ethereum is the main focus of DeFi development and transactions now. DeFi can capitalize on the intrinsic traits of Ethereum for delivering desired functionalities. DeFi focuses on the following properties that you can find only with Ethereum.
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There is no restriction on any individual for using DeFi services, such as identifying characteristics like nationality, political beliefs or gender.
Users don’t have to depend on permissions from a third party for accessing all DeFi services.
DeFi ensures the availability of all smart contracts for analysis and verification alongside tracking all user interactions for ensuring transparency.
It is possible to introduce any service, which offers the flexibility for encoding in a smart contract in the form of a DeFi solution.
The visibility of all transactions and interactions with the smart contract offers a trustless environment. In addition, all transactions and interactions in DeFi enjoy the security of the underlying blockchain.
One of the most interesting facts about decentralized finance tools is the scope for interoperability. It implies that DeFi services could utilize one another for developing new servers and products.
DeFi is primarily applicable in banking services. However, the majority of DeFi projects are basically lending protocols or decentralized exchanges. Lending protocols help users in borrowing cryptocurrency instantly, even for large amounts. DeFi services as decentralized exchanges can help users in trading with any Ethereum-based token.
Therefore, DeFi is definitely a promising field and has many opportunities for financial service providers and customers. On the contrary, the selection of top DeFi tools is important to ensure that you can access the true value benefits of DeFi seamlessly.
Must Read: Top 10 DeFi Use Cases
List of Top DeFi Tools for Beginners
With more than 200 DeFi projects in the crypto landscape, it is not easy for DeFi beginners to make the right choice. New DeFi-based projects are introducing promising tools for analysis and investment in the DeFi space. Although you can depend only on cryptocurrency wallets to start with, DeFi also offers decentralized exchanges. If you want to capitalize on the actual value of DeFi, then you need to take a look at the following DeFi tools list.
Metamask is one of the most popular entries among the best DeFi tools in the present times. It is actually a cryptocurrency wallet that also has a well established and popular browser extension. Metamask helps users in interacting with the Ethereum ecosystem through multiple decentralized applications or dApps. Interestingly, users don’t have to download the whole blockchain on their device for using the dApps. Metamask offers compatibility with renowned browsers like Brave, Chrome, Microsoft Edge and Firefox.
Metamask also supports tokens compliant with ERC-20 and ERC-721 standards other than Ether, the native currency of Ethereum. The notable advantages of Metamask in the DeFi space include its open-source nature and in-built coin purchasing mechanism. All the Metamask code is available online for free with available access, thereby offering scope for continuous improvement.
In addition, Metamask links effortlessly with crypto exchanges, thereby allowing adequate scope for seamless interoperability. Metamask also deserves to be one of the top DeFi tools for its hierarchical deterministic settings that support users in backing up their accounts.
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2. Coinbase Wallet
Coinbase is one of the simplest platforms for purchasing, selling and managing cryptocurrency. However, Coinbase Wallet is different from Coinbase, the exchange platform. Coinbase Wallet serves as a vital addition to the DeFi tools list for every beginner. It is a multi-coin wallet based on Ethereum as well as a dApp browser.
Interestingly, the control of the dApp stays with the user only. Private keys for your cryptocurrency wallet would rest directly in a mobile device rather than on a centralized exchange like Coinbase. Furthermore, you don’t need to register on Coinbase for having your own Coinbase Wallet.
With just a phone app, Coinbase Wallet helps you with storage, transmission and receiving multiple coins. Some of the notable cryptocurrencies supported on Coinbase Wallet include Bitcoin, Ether, Bitcoin Cash, Ethereum tokens and others. In addition, Coinbase Wallet also allows accessibility to decentralized applications on Ethereum network. Coinbase Wallet also serves as a helpful interface for accessing Ethereum-based applications for the DeFi space, such as decentralized exchanges.
3. Gnosis Safe
Gnosis Safe is also one of the notable decentralized finance tools that can get you started with DeFi. Many Ethereum users are acquainted with using single key wallets, generally known as an EOA or Externally Owned Account. Such types of wallets are safeguarded with a private key. However, compromising the private key could result in loss of access to your valuable funds.
The best solution, in this case, would be a multisig wallet like Gnosis Safe. It is actually a smart contract wallet based on Ethereum, which requires approval of a specific number of people for approving a transaction. For example, if a business has two stakeholders, then the Gnosis Safe wallet can be configured for demanding approval of the two stakeholders before sending a transaction.
Gnosis Safe is unique in the DeFi tools list for the feature of allowing complete self custody of funds. As a result, you can avoid troubles from banks for running a crypto business. In addition, the completely trustless smart contract offers comprehensive control to the users.
The list of DeFi tools that serve as cryptocurrency wallets also brings Monolith into consideration. It is a decentralized banking solution based on Ethereum. It offers a non-custodial contract wallet for secure storage of Ethereum-based tokens. Users could exchange the tokens for fiat currency alongside enjoying the facility of loading them on your Monolith Visa debit card.
Monolith offers a decentralized, non-custodial and open-source contract wallet. Users could get the benefits of advanced security features tailored for safeguarding user funds in adverse events. The interesting fact about Monolith, among other top DeFi tools, is the global recognition for Monolith Visa debit card. Presently, it is available across 31 countries in Europe, thereby showcasing its reach.
TKN or the Monolith token encourages community members for participating in the growth of the Monolith card. It has the backing of a continuously expanding collection of ERC-20 tokens, which you can use for making payments for everyday purchases. So, Monolith definitely has a lot of value as a DeFi tool as a DeFi wallet alongside a Visa debit card.
Also Check: A Complete List Of Stablecoins
The most common problem in the adoption of cryptocurrency wallets in the DeFi space is user-friendliness. As a matter of fact, the issue can be quite problematic for beginners as they encounter alphanumeric strings, keys, wallets and seed phrases for the first time. Argent is one of the best DeFi tools which attempts at solving this problem.
It focuses on abstraction of complexities in crypto space for delivering a simple user experience. It is a non-custodial wallet featuring a distinct recovery mechanism, Argent Guardians. Therefore, users don’t have to remember gigantic recovery phases or take backups for their private keys.
The interesting fact about Argent is the facility of support for different decentralized finance or DeFi protocols. As of now, Argent enables users for accessing eight different DeFi protocols directly from the app. Some of the notable DeFi protocols supported by Argent include Aave, Compound, Social TokenSets, Kyber token exchange and Robo TokenSets.
It is not enough for a beginner to start in DeFi with cryptocurrency wallets only. You would also need the decentralized finance tools for managing DeFi assets, and Zapper is a top choice. It is actually a simple dashboard built for DeFi. Zapper allows easy tracking and visualization of all DeFi assets and liabilities through a simple interface.
Zapper emerged as the result of a merger between DeFiSnap and DeFiZap, two fundamental DeFi asset management tools. DeFiZap helps users in faster capital investment in various income opportunities. The facility of DeFi onramps with DeFiZap addressed the troubles such as impermanent loss.
On the other hand, DeFiSnap offers the signature dashboard for tracking DeFi assets. It supports notable DeFi protocols such as Compound, Synthetix and Set Protocol. Most important of all, DeFiSnap has been recognized for maximum DeFi integrations in the overall asset management landscape.
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Another popular addition among DeFi asset management platforms in DeFi tools list is Debank. Debank is also a dashboard that helps in tracking DeFi portfolio. It offers functionalities of data and analytics with decentralized lending protocols, decentralized exchanges, stablecoins and margin trading platforms.
Debank helps in monitoring all DeFi assets in one platform for reducing the gap between DeFi technologies and end-users. It allows users to test their demo account and is quite easy to set up. Most important of all, the Debank dashboard could help in tracking assets in different DeFi protocols.
In addition, experts believe the future holds promising features being added to the Debank portfolio. Apart from the facility of a dashboard, Debank also serves as a wallet along with other options like the analytics page or the interest rates. The effectiveness of Debank is also visible in the facility of “Ranking” panel, which serves as a scoreboard for various categories.
Zerion is also one of the top DeFi tools for managing your DeFi asset portfolio. It has won many accolades as an investment interface for decentralized finance or DeFi. Users can access a single platform for managing their complete DeFi portfolio with a non-custodial approach.
It also allows users to navigate the DeFi market, liquidity pools, vaults and multiple ERC-20 tokens. In addition, Zerion also presents the prospects of earning interest on stablecoins alongside tracking their return on investment, among other functionalities.
Zerion has the capability for delivering a comprehensive DeFi experience for beginners with its distinct traits. It features advanced portfolio analytics for evaluating the performance of your investments along with staked assets. The DeFi asset management tool also presents the smart transaction history in user-friendly formats. Users could easily filter out the transactions on the basis of protocol, transaction type, address or asset.
9. DeFi Pulse
DeFi Pulse is also one of the top platforms which deserve a place in the DeFi tools list. It is the leading resource for tracking your DeFi assets and projects. Many experts consider DeFi Pulse as the leaderboard of decentralized finance. Users could access latest information on rankings and analytics related to DeFi protocols.
The rankings on DeFi Pulse track the total value locked or TVL related to smart contracts based on notable DeFi protocols and applications. Furthermore, DeFi Pulse also prepares The DeFi List and maintains it. The DeFi List is actually a collection of best resources in DeFi. Beginners could also capitalize on the DeFi Pulse Farmer newsletter for obtaining access to latest DeFi news, trends and opportunities.
10. DeFi Saver
The final addition in the DeFi tools list would draw our attention towards DeFi Saver. DeFi Saver presents one platform for users interested in management of their DeFi assets throughout different protocols. The easy to use dashboards for Compound and MakerDAO are the promising highlights of DeFi Saver. In addition, it also offers a personalized dashboard for Dai lending, known as Smart Savings.
The personalized dashboards can easily connect users with different protocols such as Maker, Compound and Fulcrum. As a result, users could access a seamless experience with unique features for managing DeFi assets. DeFi Saver can keep users updated about their transaction status as the transaction passes through the mempool. The real-time notification facility can encourage end-user engagement while reducing anxiety regarding transactions.
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It is quite clear that cryptocurrency wallets and DeFi asset management platforms are the best DeFi tools for beginners. The cryptocurrency wallet is essential for converting fiat currency into DeFi assets and trading them on different platforms. However, DeFi beginners would also need dashboards and asset management tools for monitoring the performance of their DeFi investment portfolio.
The assumptions regarding the future of DeFi have fuelled the growth of many DeFi tools. In the long run, users have to differentiate between the DeFi tools they want and the ones they can skip. Your requirements matter the most and if you want to just get started with DeFi, choose the tools listed here.
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*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. Do your own research!