13 Best DeFi 2.0 Projects & Coins to Invest in 2024

DeFi 2.0 is a new concept within the blockchain industry. Put simply, it aims to improve on the original DeFi framework, through reduced fees, increased scalability, enhanced liquidity, and cross-chain capabilities.

In this guide, we analyze the best DeFi 2.0 coins to invest in 2024. Read on to learn about DeFi 2.0 and what projects are worth keeping an eye on.

List of the Best DeFi 2.0 Tokens to Buy

Listed below are the best DeFi 2.0 tokens to buy in 2024:

  1. Dogecoin20 (DOGE20) – Greener version of Doge with passive staking rewards.
  2. Green Bitcoin (GBTC): Overall best DeFi project with a unique, high-APY staking model.
  3. Sponge V2 (SPONGEV2): New meme coin offers 202% staking APYs, 100x in 2023.
  4. 5th Scape (5SCAPE)Merging VR with blockchain to offer immersive games. $950K+ rasied.
  5. Smog (SMOG): Popular DeFi project offers airdrop rewards and 42% staking APYs.
  6. eTukTuk (TUK): Sustainable crypto builds EV charging stations. $725K raised on presale.
  7. Bitcoin Minetrix (BTCMTX): New DeFi 2.0 project offers BTC mining rewards. $10M+ raised.
  8. Cosmos (ATOM): Allows DeFi 2.0 projects to offer cross-chain services.
  9. Arbitrum (ARB): This popular cryptocurrency is a layer 2 solution for DeFi 2.0 protocols.
  10. The Graph (GRT): Solves a major issue in the DeFi arena – blockchain overload.
  11. dYdX (DYDX): Allows traders to access leveraged cryptocurrency instruments.
  12. Lido DAO (LDO): Stake Eth 2.0 with this crypto, without meeting the 32 ETH minimum.
  13. OKB (OKB): DeFi 2.0 project specializing in Web 3.0 products, such as savings accounts.

An Overview of How DeFi 2.0 Works 

Decentralized finance (DeFi) is an increasingly important aspect of the Web 3.0 economy. Put simply, this industry removes the need for third-party providers, such as banks, lenders, and centralized exchanges.

This means that DeFi enables investors of all budgets to access conventional financial services, but without needing to use a middleman. However, DeFi 1.0 – the original form of decentralized finance, comes with various pitfalls.

This includes:

  • Liquidity: DeFi 1.0 platforms are fragmented, meaning that liquidity was a constant issue. This means that users would often struggle to swap tokens on a decentralized exchange, considering that there wasn’t enough liquidity on the platform to facilitate the trade. DeFi 2.0 solves this issue by using cross-chain bridges, allowing platforms to scrape liquidity from multiple providers.
  • Fees: Most DeFi 1.0 platforms operate on the Ethereum blockchain. As the blockchain has become overloaded in recent years, this has resulted in unviable GAS fees. DeFi 2..0 solves this by using layer 2.0 solutions like Arbitrum and Polygon. Fees are also reduced by using more efficient networks, such as Solana and Cardano.
  • Scalability: A direct consequence of blockchain overload is an inability to scale transactions. This means slower transaction times and higher fees. DeFi 2.0 solves this through layer 2 solutions, such as those mentioned above.
  • Cross-Chain Functionality: DeFi 1.0 platforms allow users to swap tokens on the same blockchain. For example, an Ethereum-based platform would support ETH, USDT, and other ERC20 tokens. DeFi 2.0 takes things to the next level, allowing users to swap tokens across multiple networks. For instance, being able to swap BNB for BTC or LTC for ETH.
  • Efficient Data Management: Ever-increasing interest in decentralized finance means that DeFi 1.0 protocols are inundated with transactional data. This reverts back to the issue of unfavorable scalability, fees, and speeds. DeFi 2.0 protocols like the Graph solves this issue through its blockchain indexing tool – allowing developers to seamlessly query and manage data.

These are just some of the issues that DeFi 2.0 has solved – but there are many more. Nonetheless, this is still a young concept, meaning that growth investors are constantly looking for the best DeFi 2.0 tokens to buy. This allows investors to gain exposure to the future of DeFi 2.0 before it reaches the masses.

In the next section, we analyze the best DeFi 2.0 projects and tokens for investors to consider.

Top DeFi 2.0 Coins: Full Analysis 

To effectively navigate the DeFi 2.0 landscape, investors must research their chosen crypto 2.0 coins extensively. This includes assessing how the project solves issues from DeFi 1.0, how viable its concept is, and the long-term price potential.

Below, we take a much closer look at the best DeFi 2.0 projects for 2024.

1. Dogecoin20 – Overall Best DeFi Project Offering Passive Staking Rewards

Dogecoin20 has massive potential to explode this year. This ERC20 token has been built using Ethereum and provides holders with the opportunity to earn high APY through its passive staking reward program.

The staking rewards have been programmed in such a way that reflects ownership of the staking pool. In other words, the more you stake, the more you earn.

Main Hero Image Dogecoin20

The major difference between Dogecoin20 and the original Doge is that this project has been built with Ethereum and Proof of Stake consensus algorithm.

This means that all transactions are faster, cheaper and more secure. What’s more, because of its environmentally friendly architecture, Dogecoin20 is good for the planet and well positioned for the rest of the decade.

The presale has been designed to be democratic and means that everyone pays the same price. Once all tokens have been sold, the supply is locked until the token is established on mainstream exchanges. This has been done to prevent dumping on the first day of trading.

Dogecoin20 Image 2

Staking your coins is straightforward and can be done in just a couple of clicks once you have purchased your tokens. Within minutes you can be earning high rewards on top of any appreciation in the token’s underlying value. The cryptocurrency market is back in price discovery mode and we expect $DOGE20 to do very well.

To learn more about the project and how you can get involved, head to the Dogecoin20 website and be sure to read the white paper. To stay up to date on all the latest product updates and news, follow Dogecoin20 on X and join the exclusive Telegram channel.

Total Tokens 140 billion
Tokens available in presale 35 billion
Blockchain Ethereum Network
Token type ERC-20
Minimum Purchase None
Purchase with USDT, ETH, BNB & Card

2. Green Bitcoin – Top DeFi Project With a High-APY Staking Model

Green Bitcoin ($GBTC) is the best deFi crypto with an eco-friendly mechanism offering high staking rewards. It merges Bitcoin’s principles with Ethereum’s eco-friendly Proof of Stake (PoS) mechanism to offer an energy-efficient alternative to traditional Bitcoin mining with approximately 10,000 times greater efficiency.

Early buyers can get the GBTC tokens at press time for a presale price of $0.8782. This price will increase in the upcoming presale stage until the expected exchange listings.

Green Bitcoin has raised nearly $4 million in just a few weeks of launch, showing massive investor traction.

Green Bitcoin presale homepage

It offers a new-age ‘Gamified Green Staking’ model. This model rewards users for staking $GBTC tokens and participating in Bitcoin price predictions. 

At the time of writing, it offers an annual percentage yield (APY) of 125%. Over 4.6 million tokens have been staked thus far, showing huge community confidence.

Stakers can earn up to a 20% bonus for six months or longer commitments. This incentivizes long-term investment and active engagement in the project’s ecosystem until December 31, 2025.

Green Bitcoin

The platform focuses on rewarding early adopters and maintaining active community participation. According to the Green Bitcoin whitepaper, the project has a total supply of 21 million tokens. It allocates 70% of this supply to presale and staking rewards.

Users can follow Green Bitcoin X (formerly Twitter) and enter its Telegram group to keep up with the latest progress.

Total Tokens 21 Million
Tokens available in presale 8,400,000 GBTC
Blockchain Ethereum Network
Token type ERC-20
Minimum Purchase None
Purchase with USDT, ETH, Card

3. Sponge V2 – Top DeFi Project With High Minimum APY of 202%

Sponge V2 (SPONGEV2) is an upgrade from Sponge V1, including a Play-to-Earn (P2E) game and offering a high minimum Annual Percentage Yield (APY). The project promises a minimum of 202% APY over four years.

This follows $SPONGE’s original success, where its market capitalization soared to $100 million, a 100-fold increase. 

Sponge V2 homepage

Moving beyond its ‘meme roots,’ Sponge V2 focuses on utility, particularly through its P2E game that rewards players with $SPONGE tokens.

The transition from V1 to V2 is enabled by a Stake-to-Bridge mechanism, where V1 tokens are staked and locked to obtain V2 tokens, promoting long-term engagement and token stability.

Sponge V2 aims to list on major exchanges like Binance and OKX, with goals to replicate the growth of renowned meme coins, potentially improving $SPONGE’s trading volumes.

Its token supply is fixed at 150 billion, with 43.09% reserved for staking rewards and 8% for P2E gaming prizes. 

Sponge V2 P2E Game

With a 30,000-member community, Sponge V2 is ramping up marketing and community initiatives. V1 token holders are incentivized to stake their holdings for V2 tokens. 

Investors and followers can stay updated through Sponge V2’s social media channels, including Twitter and Telegram.

Hard Cap N/A
Total Tokens 150 Billion
Tokens available in presale N/A
Blockchain Ethereum Network
Token type ERC-20
Minimum Purchase None
Purchase with USDT, ETH, Card

4. 5th Scape (5SCAPE) – Merging VR With Blockchain To Offer Immersive Games

Merging virtual and augmented reality (VR/AR) with the crypto world, 5th Scape ($5SCAPE) offers a hot opportunity in the DeFi sector.

5th Scape is reshaping the gaming world by introducing immersive environments that combine gaming excitement with Ethereum’s blockchain to make an extensive virtual reality ecosystem.

The $5SCAPE presale is currently in progress with an initial price of $0.00187 per token. This value will increase to $0.17845 in the next presale round.

The platform has raised over $950K in just a few days of launch, showing massive community support. It has a hard cap target of $15 million during the presale phase.

5th Scape homepage

Buying the $5SCAPE token allows users to access various VR content and games – from the MMA game ‘Cage Conquest’ (available in Q2 2024) to educational resources and blockbuster movies.

Advanced VR hardware will also be available at discounted prices to improve the gaming experience for the token holders.

5th Scape aims to be far more than an entertainment platform and capitalizes on an advanced virtual space to offer recreational and educational value.

Interested users can enter 5th Scape’s Telegram channel and follow it on X (Twitter) to get all the latest updates as the platform moves through its 12-round presale and into position to do big things in the DeFi (and VR-gaming) sectors.

Presale Started January 2024
Purchase Methods ETH or USDT
Chain Ethereum
Hard Cap $15 million
Min Investment None
Max Investment None

5. Smog – Popular DeFi Coin to Buy Now, Get 42% Staking APYs

Smog ($SMOG) is a brand-new cryptocurrency built on the Solana blockchain. In February 2024, $SMOG was launched directly on the Jupiter decentralized exchange. 

After launching at a price of $0.001419 per token, $SMOG is now trading at the $0.047 level – a price jump of more than 3,200%. The market cap has also increased from $2 million to over $64 million. 

Smog token page

This DeFi coin has a total supply of 1.4 billion – half of which will be used to market the project. Smog wants to become the next big meme coin, similar to Pepe and Bonk in the past. To attract a large community of investors, $SMOG is also running a huge airdrop campaign. 

SMOG tokenomics

490 million tokens will be allocated as airdrop rewards to token holders. One can start earning airdrop points by holding $SMOG, and joining daily, weekly and monthly quests. Through a staking mechanism, token holders can generate APYs (Annual Percentage Yields) as high as 42%. 

10% of the token supply has also been set aside for upcoming centralized exchange listings. Read the Smog whitepaper and join the Telegram channel for more information. 

Hard Cap N/A
Total Tokens 1.4 Billion
Tokens available in presale Not a presale
Blockchain Solana
Token type SPL
Minimum Purchase N/A
Purchase with SOL, USDT, USDC or any other Solana-based token

6. eTukTuk – Sustainable Crypto Project Creating EV Charging Stations in Developing Countries

eTukTuk ($TUK) is a new sustainable crypto leveraging blockchain technology to create EV charging stations. The goal of eTukTuk is to promote EV adoption among TukTuk drivers from developing countries such as Sri Lanka.

eTukTuk presale

Over 270 million TukTuks operate using ICEs (Internal Combustion Engines) – which account for high volumes of air pollution. As an alternative, eTukTuk will start building EVSEs (Electric Vehicle Charging Stations) and zero-emission vehicles.

These stations will be built using the help of local territory partners. TukTuk drivers can make payments on these charging stations with $TUK – the native token.

Local territory partners will be rewarded with a portion of earnings on the EVSEs. Finally, $TUK can also be staked into power nodes – to help maintain the EVSEs. By doing this, you can generate APYs as high as 303%.

eTukTuk staking

It is estimated that TukTuk drivers will save nearly 400% by making the switch to eTukTuk. Currently, $TUK is available to buy on presale for $0.2625 per token. The presale has raised more than $725K since launch.

Read the eTukTuk whitepaper and join the Telegram channel for more information.

7. Bitcoin Minetrix – DeFi 2.0 Platform Offers 66% APY and New BTC Cloud Mining System Over Ethereum

Bitcoin Minetrix ($BTCMTX) is a new architecture in a niche market – Bitcoin cloud mining. It is the world’s first stake-to-mine ecosystem that provides a simple and convenient way for anybody to earn Bitcoin mining rewards.

Bitcoin Minetrix presale

This ERC20 PoS implementation allows users to stake their $BTCMTX coins, which in turn generates cloud mining credits, which are burned for BTC. 

All of this is conducted through an easy-to-use interface where users can manage the entirety of their mining operations. This interface includes essential metrics like ‘Mining Credits Earned’, ‘Mining Power Bought’, and ‘Total Power Received’.

It also provides a neat overview of daily, weekly, and monthly BTC earnings. It can be likened to a miniature mining operation tailored for the retail investor.

Bitcoin mining costs thousands of dollars (at least) for hardware purchases, and it requires significant expertise and financial resources. It is also well known to be environmentally destructive. But Bitcoin Minetrix comes with none of these disadvantages. 

There is a mere $10 upfront investment and no experience is required. There is no need to purchase hardware or install software, aside from using MetaMask to connect with the presale. Ethereum is also much more environmentally friendly and offers generous APY rewards, which are currently 66% for this DeFi platform. 

Users can earn from price appreciation, staking, or BTC mining rewards, three means of ROI.

This campaign has undergone a third-party smart contract audit and scored cleanly, which is another advantage. And the presale trades at a discount, currently at  $0.0132 per token.

This is a very well-rounded DeFi platform in a niche market, with few competitors. It also provides the world’s first stake-to-mine model over Ethereum, which is why we believe it could be a hit in 2023. 

Bitcoin Minetrix has raised more than $10 million since the start of the presale.

For all the details of what is on offer here, be sure to keep in touch with the project socials (Twitter and Telegram) and read the Whitepaper from top to bottom. 

Presale Started September 2023
Purchase Methods USDT, ETH, BNB
Chain Ethereum
Hard Cap $32 Million
Min Investment $10
Max Investment None

8. Cosmos (ATOM) – Interoperability for Cross-Chain DeFi 2.0 Protocols 

Cosmos is one of the best DeFi 2.0 projects for blockchain interoperability. Put simply, the Cosmos ecosystem allows blockchains to communicate and share data with other networks. For example, a DeFi 2.0 application on the Ethereum network can transact with a project on Binance Smart Chain.

This opens up a world of possibilities and solves many of the issues associated with DeFi 1.0. For example, legacy DeFi platforms only enable users to exchange tokens on the same blockchain. For example, an Ethereum-based platform allows users to swap ETH for USDT but not for BTC or BNB. This is because DeFi 1.0 ecosystems were not designed with interoperability in mind.

Cosmos price today

But by utilizing the Cosmos protocol, DeFi 2.0 platforms can now expand to multiple blockchains, token standards, and consensus mechanisms. Crucially. those using Cosmos still retain their governance and sovereignty. In fact, Comos offers its services in a decentralized nature, meaning no reliance on third parties or escrows.

Cosmos is backed by its native utility token, ATOM. Those using Cosmos for cross-chain services will need ATOM to pay transaction fees. Moreover, ATOM is one of the best staking coins, allowing holders to generate rewards passively. According to CoinMarketCap, Cosmos has a market capitalization of over $3 billion. This is down 70% from its bull market peak of over $11 billion.

Therefore, those investing in Cosmos today will secure a huge discount. The best crypto exchange to buy Cosmos is MEXC. This is a regulated exchange that requires a minimum trade size of just $10. What’s more, USD deposits with debit/credit cards and e-wallets are free of charge.

9. Arbitrum (ARB) – Layer 2 Solutions for DeFi 2.0 Ecosystems

We mentioned earlier that DeFi 1.0 ecosystems struggle with efficiency, and Arbitrum offers the ideal solution. Put simply, Arbitrum is a layer 2 solution for the Ethereum blockchain and all ERC20 tokens. Any DeFi project using the ERC20 standard can bridge to the Arbitrum network. And in doing so, DeFi 2.0 projects will benefit from super-low fees, fast transactions, and a highly scalable framework.

While estimates vary, it has been claimed that Arbitrum can handle up to 40,000 transactions per second. According to ETHTPS, DeFi projects on the Ethereum network can handle just 29 transactions per second. This is far from sufficient for DeFi projects, considering the sheer number of transactions generated. Arbitrum also allows DeFi 2.0 ecosystems to reduce transaction fees.

Arbitrum price

According to Arbitrum, its network has already saved ERC20 projects over $1.8 billion in GAS fees. Crucially, the project is backing up its claims, with over 200 ERC20 tokens already bridging to the Arbitrum ecosystem. This includes various DeFi protocols, including UniSwap, Chainlink, Dai, Maker, and Curve DAO.

In terms of performance, Arbitrum’s native token, ARB, was listed on exchanges in April 2023. While ARB was one of the most anticipated launches in recent years, its performance has been stagnant. For example, ARB was originally listed at $1.18, but it currently trades at just $1.09. This means ARB is traded 7% below its launch price. Nonetheless, Arbitrum has a market capitalization of just over $1 billion.

10. The Graph (GRT) – Blockchain Indexing Solutions for DeFi 2.0 Projects

The Graph is another innovative project that offers ready-made solutions to DeFi 2.0 tokens. This relates to blockchain overload, meaning DeFi 1.0 projects simply cannot handle the number of smart contract transactions being processed. This results in slow transactions, and inefficient data management.

This is because each and every DeFi transfer requires an individual transaction. For example, swapping tokens, depositing funds into a staking pool, and using yield farming tools. That said, many transactions within DeFi ecosystems offer little value, but they continue to clog up the network nonetheless.

GRT token price chart

This is where the Graph comes in. The project allows DeFi ecosystems to ‘index’ data. This organizes and sorts blockchain data, removing the clutter and making information requests seamless. In other words, developers can search for and query blockchain data efficiently. To do so, developers must pay fees to the Graph. Fees are payable in its native token, GRT.

According to CoinMarketCap, GRT was launched in late 2020 at $0.12 per token. In line with the broader bull market, GRT went on to hit highs of $2.30 – an increase of 1,800%. However, GRT has since plummeted and is currently trading at $0.10. This represents an attractive entry price. If GRT returns to its former peak during the next bull run, this would yield an upside of over 2,000%.

11. dYdX (DYDX) – Leveraged Crypto Derivatives in a Decentralized Economy 

dYdX is one of the best DeFi 2.0 projects revolutionizing the crypto trading scene. It specializes in leveraged crypto derivatives, an industry formally dominated by centralized platforms like BitMEX and Bybit. dYdX, however, is a decentralized platform that is powered by Starkware.

This is a layer 2 solution for legacy blockchains, meaning it facilitates scalable, fast, and cost-effective transactions. In fact, the Starkware integration enables dYdX to offer fee-free trading. Its leveraged products are based on decentralized perpetual contracts. It has access to deep liquidity pools, ensuring that trades are executed efficiently and without slippage.

dYdX price chart

Leverage of up to 20x is available on dozens of supported cryptocurrencies. This includes everything from Bitcoin, Cardano, and Solana to Polygon, Chainlink, and Dogecoin. Another benefit of this DeFi 2.0 trading site is that withdrawals are processed instantly. Due to its layer 2 solution, withdrawals take just minutes to land in the trader’s crypto wallet.

What’s more, in line with the DeFi 2.0 concept, dYdX does not have a KYC process. Users simply need to provide an email address when registering, meaning an anonymous trading experience. To invest in the future of DeFi 2.0 trading, dYdX is backed by DYDX tokens. DYDX trades on crypto exchanges like MEXC.

12. Lido DAO (LDO) – Ethereum 2.0 Staking Solutions for Casual Investors   

Lido DAO provides DeFi 2.0 solutions for those looking to stake Ethereum 2.0. Ordinarily. investors need to stake at least 32 ETH when going through the Ethereum blockchain. Based on current ETH/USD prices, this means a capital outlay of over $57,000. This won’t be possible for the vast majority of cryptocurrency investors.

This is where Lido DAO comes in. This DeFi 2.0 protocol allows users to stake any amount of their choosing. Moreover, Lido DAO stakes the tokens directly on the Ethereum blockchain. This means that users do not need to trust centralized third parties, such as exchanges.

Lido DAO price

Currently, Lido DAO is offering an APY of 3.8% on Ethereum deposits. To date, the platform has generated over 341,000 ETH in staking rewards. Lido DAO notes that over 7.3 million ETH are currently being staked via its protocol. Based on current prices, that’s more than $13 billion.

Lido DAO is backed by its own governance token, LDO. This DeFi 2.0 token has witnessed extreme volatility since peaking at over $6 in late 2021. According to CoinMarketCap, at the start of 2023, LDO dropped below $1. Currently, LDO is trading at almost $1.90, meaning year-to-date growth of 90%.

13. OKB (OKB) – Decentralized Wallet Securing Liquidity From Over 200 Pools    

OKB is the native token of the OKX exchange. While OKX is popular for its centralized exchange, it also offers a decentralized wallet ecosystem. The OKX wallet operates independently and does not have access to the user’s private keys. OKX solves many issues prevalent in the DeFi 1.0 economy.

For example, the OKX wallet provides users with cross-chain functionality. This means users can trade tokens across more than 50 blockchain networks, ranging from Ethereum and Polygon to Binance Smart Chain and Avalanche. What’s more, OKX has developed a bridge aggregator that secures prices from over 200 liquidity pools.

OKB price today

Not only does this mean users get the best exchange rates when swapping tokens, but the highest APYs when earning yields. For example, by selecting USD Coin, OKX informs us that the highest APY is offered by Compound at 12.15%. Users can instantly begin earning yields without leaving the OKX wallet. Moreover, OKX also brings DeFi 2.0 security protocols to its ecosystem.

This is because its wallet supports multi-party computation (MPC). In a nutshell, this removes the need to protect private keys, as the wallet credentials are split across multiple locations – including the user’s device. To gain exposure to OKX’s DeFi 2.0 ecosystem, investors can buy OKB tokens.

Tips on Choosing the Best DeFi 2.0 Coins to Buy

There are plenty of DeFi 2.0 coins in the market, some with much greater prospects than others.

But what tactics do seasoned investors use when building a DeFi 2.0 portfolio?

Below, we provide some useful tips when selecting the best DeFi 2.0 projects to invest in.

DeFi 1.0 Solutions

A good starting point is to evaluate how the project improves on DeFi 1.0 shortcomings.

For example, Arbitrum allows ERC20-based projects to operate more efficiently. Instead of paying high GAS fees and being limited to 29 transactions per second, Arbitrum offers a cost-effective and highly scalable solution.

Similarly, Cosmos allows DeFi 2.0 projects to offer cross-chain functionality. Unlike DeFi 1.0 platforms, this means investors can swap tokens across multiple blockchains.

Then there’s Lido DAO, which removes the barrier of entry for Ethereum 2.0 stakers. Instead of needing to put up 32 ETH or use centralized alternatives, Lido Dao allows investors to stake any amount of their choosing.

Ultimately, finding the best DeFi 2.0 projects requires investors to focus on real-world solutions. That is to say, for the DeFi 2.0 project to succeed, it must offer relevant improvements to DeFi 1.0 problems.

Reduced Market Capitalization 

Some of the best DeFi 2.0 coins have witnessed unprecedented declines since the bull market peaked in 2021. This is an industry-wide decline experienced by most cryptocurrencies. This means that many DeFi 2.0 coins are trading at huge discounts, providing an attractive entry point for investors.

For example, Cosmos had a market capitalization of over $11 billion in late 2021. In line with the wider market, Cosmos is now valued at $3 billion. This means that by investing in Cosmos today, a 70% discount is on offer.

How do Crypto Market Capitalizations Work?

  • The market capitalization of a crypto project refers to its valuation.
  • This is calculated by taking the current market price of the crypto and multiplying it by the number of tokens in circulation.
  • For example, GRT tokens currently trade at $0.10.
  • There are 9.5 billion GRT tokens in circulation.
  • This gives GRT a market capitalization of $950 million.

Similarly, the Graph was valued at over $5.7 billion in late 2021. Today, the same project has a market capitalization of under $1 billion. That’s a decline of over

While there are no guarantees of future appreciation, investors are buying discounted DeFi 2.0 coins in their droves. The anticipation is that when the next bull market begins, DeFi 2.0 coins will witness sizable growth.

Newly Launched DeFi 2.0 Projects 

Some investors prefer DeFi 2.0 projects that are at the very start of their journey. Meaning – they are yet to list on crypto exchanges. The benefit of this is that investors can gain exposure to a DeFi 2.0 project from the ground up.

When entering the market, most DeFi 2.0 projects raise funds via a presale campaign. This usually offers a discounted cost price as an incentive for investing early.

We mentioned that Sponge V2 is one of the best DeFi 2.0 presales. The project has created a lot of hype in the DeFi 2.0 community and has a very interesting use case tied to the regulation of new crypto products in the US markets.

How do DeFi 2.0 Presales Work?

  • Presales (otherwise known as ICOs) allow newly launched DeFi 2.0 projects to raise funds from investors
  • The project will sell its native DeFi 2.0 token, usually at a presale discount
  • In return, investors will pay for their presale purchase with an established crypto, such as ETH or USDT.
  • This helps fund the DeFi 2.0 project and provides it with sufficient working capital
  • After the presale finishes, investors receive their tokens. The project will then list its token on a crypto exchange.
  • Ultimately, presales offer access to the best emerging cryptocurrencies before the general public.

While presales are risky, they appeal to investors that want to buy DeFi 2.0 coins before they become mainstream.

What are the Benefits of DeFi 2.0 Crypto Coins?

Still not sure if DeFi 2.0 coins are the right investment product?

Below, we explain some of the key benefits of investing in this niche market.

Premium Liquidity

One of the main issues with DeFi 1.0 is a lack of liquidity. This is because each decentralized exchange operated independently. In other words, exchanges could only use the liquidity that was deposited into their respective platforms.

The result is that investors would often find it difficult to trade tokens – especially larger amounts.

In contrast, DeFi 2.0 platforms utilize external liquidity pools. This means that behind the scenes, exchanges can source liquidity from multiple locations. In turn, traders can buy and sell tokens seamlessly and without losing out on slippage.

Enhanced DeFi Yields

One of the best features of DeFi 1.0 was the ability to earn income on idle crypto tokens. This covers various tools, including yield farming, staking, and savings accounts. However, each DeFi 1.0 platform would offer its own individual yield, meaning investors would need to spend time shopping around.

OKX Web 3.0 wallet

In contrast, DeFi 2.0 platforms can secure yields from external sources. A good example of this is the OKX wallet. It has an in-built bridge that aggregates yields from over 200 locations. This means investors can secure the highest interest rates under one roof.

Increased Efficiency

Another major pitfall of DeFi 1.0 is the inefficiency of transactions. For example, most DeFi 1.0 platforms are built on the Ethereum blockchain. As noted earlier, Ethereum can only handle 29 transactions per second.

This means Ethereum is constantly running at maximum capacity – resulting in slow transactions and high fees. Just remember – all DeFi activities require a transaction on the blockchain, whether that’s depositing, transferring, withdrawing, swapping, or staking tokens.

To counter this shortcoming, DeFi 2.0 platforms use layer 2 solutions. For example, some of the best DeFi protocols have bridged to the Arbitrum network. This reduces fees considerably and increases scalability to over 40,000 transactions per second.

This directly benefits investors too. After all, investors are responsible for covering GAS fees when using DeFi products.

Cross-Chain Functionality

DeFi 2.0 protocols allow investors to source products and services across multiple blockchains. This is known as ‘interoperability’, and it enables different networks to communicate with one another.

What is a Cross-Chain Bridge?

Cross-chain bridges form a crucial tool in the DeFi 2.0 arena. Put simply, this enables DeFi 2.0 platforms to conduct transactions across two different blockchains. For example, swapping an ERC71 NFT for a BEP-721 NFT. Or, swapping Bitcoin for XRP. Either way, cross-chain bridges operate behind the scenes, meaning users can perform tasks without having to use multiple platforms.

This provides plenty of benefits for investors.

For example:

  • Suppose an investor is currently holding XRP tokens in a private wallet
  • They want to use their XRP tokens to invest in the Bitcoin Minetrix – which only accepts ETH and USDT
  • Ordinarily, the user would need to transfer XRP to a crypto exchange and swap it for ETH or USDT. Then, they would need to withdraw the ETH or USDT back to their private wallet.
  • In contrast, DeFi 2.0 wallets like OKX come with cross-chain capabilities. This means the investor can instantly swap XRP for ETH or USDT, even though they operate on different blockchains.
  • What’s more, the OKX wallet aggregates prices from over 200 locations, so the user would get the best exchange rate possible.

In addition, cross-chain functionality is also useful for yield farming cryptocurrencies that use different token standards. For example, suppose an investor is holding ETH and BTC.

To maximize their returns, the investor might add equal amounts of ETH and BTC to a liquidity pool. In doing so, they will earn a share of any trading fees collected.

What is the Difference Between DeFi 1.0 and DeFi 2.0?

First and foremost, DeFi 1.0 and 2.0 both allow investors to access financial services in a decentralized way. This means no personal information, KYC documents, or credit checks. Moreover, both DeFi 1.0 and 2.0 are inclusive, allowing investors of all budgets to trade, earn yields, and borrow funds.

That said, DeFi 2.0 takes things to the next level by solving many issues found in DeFi 1.0. As we discussed, DeFi 1.0 platforms lacked sufficient liquidity, making it inefficient for users to trade. Moreover, DeFi 1.0 could only process transactions on the same blockchain network.

Additionally, DeFi 1.0 relied heavily on the Ethereum blockchain, meaning high fees, delayed transactions, and an inability to scale up. DeFi 2.0 has solved many of these problems, including increased liquidity, cross-chain functionality, and layer 2 solutions for scalability and cost-effectiveness.

With this in mind, the DeFi 2.0 investment landscape is increasingly becoming popular. The easiest way to invest is to build a portfolio of DeFi 2.0 tokens. Refer to our earlier guide on how to pick the best DeFi 2.0 projects.

The Verdict

DeFi 2.0 is an exciting development in the blockchain space, allowing investors of all sizes to engage with decentralized finance. One of the best DeFi 2.0 tokens for growth investors is Dogecoin20. The project builds on the success of the current trend for dog themed memecoins and offers the opportunity to earn high yield through passive staking rewards.

References

FAQs

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Kane Pepi
Editor

Kane Pepi is an accomplished financial and cryptocurrency writer who has an extensive portfolio of over 2,000 articles, guides, and market insights. With his expertise in specialized subjects such as asset valuation and analysis, portfolio management, and financial crime prevention, Kane has built a reputation for providing clear explanations of complex financial topics. He holds a Bachelor's Degree in Finance and a Master's Degree in Financial Crime, and is currently pursuing his Doctorate degree, which focuses on investigating the complexities of money laundering in the cryptocurrency and blockchain technology sectors. Kane's wealth of knowledge and experience in the field make…