9 Best DeFi 2.0 Projects & Coins to Invest in 2023

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 2023. Read on to learn about DeFi 2.0 and what projects are worth keeping an eye on.

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 2023.

1. Wall Street Memes (WMS) – Overall Best DeFi 2.0 Coin to Buy, with Potential to go Viral as Elon Musk Tweets the Project  

Wall Street Memes is one of the best new cryptocurrencies in the market. This is a presale project that has already raised $9 million. The presale is still ongoing, and early investors can still secure an attractive discount. So, what exactly is Wall Street Memes, and why is it attracting cryptocurrency investors in their droves?

Wall Street Memes is a meme coin project that aims to democratize traditional finance. In line with the DeFi 2.0 concept, Wall Street Memes believes in community-driven decisions and decentralization. It is also looking to revolutionize the traditional financial markets, by limiting the influence of hedge funds and other centralized institutions.

Wall Street Memes is an unofficial subset of the WallStreetsBet movement. This is a Reddit forum with over 14 million subscribers. For those unaware, WallStreetBets was able to pump various stocks that were heavily shorted by hedge funds. Not only did this result in the community making vast profits, but short-sellers on Wall Street lost billions of dollars. A Stanford University study refers to the WallStreetsBet movement as a “David v Goliath showdown”

Wall Street Memes follows the same ethos, meaning it wants to bring financial prosperity to the many, not the few. This community-run meme coin project is spreading its message through fun, shareable memes. And it’s having great success in doing so, with the project claiming to have over 1 million online followers. Wall Street Memes also claims that its memes are getting over 40 million views per month.

The result is that Wall Street Memes is primed to be one of the best crypto presales of 2023. While $9 million has been raised so far, the presale is still ongoing. The current price of WSM tokens is $0.0298. This represents a discount from the exchange listing price, although this is yet to be announced. The Wall Street Memes presale accepts ETH and BNB. Credit cards are also accepted after going through a KYC process.

However, before investing in the Wall Street Memes presale, it is important to consider the risks. At its core, WSM is a meme coin project. This means its success will be built on speculation and hype, rather than any intrinsic fundamentals. That said, Shiba Inu, FOLKI, and many other meme coins have witnessed unprecedented growth without any utility or use cases.

Note: We have come across scam websites that are imitating the Wall Street Memes presale. These are being displayed as sponsored Google ads. Investors should ensure they are visiting the official Wall Street Memes presale website, which is linked below.

2. Bitcoin BSC (BTCBSC) – Hot New Green DeFi Staking Token That Collected Nearly $1.5 Million In Just Over A Week

Within just over a week, Bitcoin BSC (BTCBSC) has raised close to $1.5 million after its launch on the Binance Smart Chain. It seeks to be the next go-to option for quick, high-APY staking rewards. 

The broader market has reacted well to Bitcoin clones in recent times. For example, BTC20 is a similar Bitcoin derivative that jumped 7x post-listing on Uniswap.

BTCBSC entered the market with a price tag of $0.99 and offers just over 6 million tokens in the presale phase. Its goal is to capture Bitcoin’s 2011 charm with a sustainable twist.

The platform mirrors Bitcoin’s fixed supply of 21 million. The presale now offers 4 million tokens; another 2.125 million are reserved for expected future needs. 

Leftover tokens will go back into the staking pool. Per the BTCBSC whitepaper, 14.455 million tokens are allocated for long-term staking, to be released over 120 years.

What Sets It Apart?

• Eco-Friendly Staking: Unlike traditional Bitcoin, which relies on the power-hungry Proof-of-Work system, BTCBSC uses a more environment-friendly Proof-of-Stake mechanism.
• Reward System: The proportion of tokens you hold determines your rewards. Moreover, these rewards are distributed every 10 minutes, giving you a steady income stream.
• Quick and Affordable: Its foundation on the Binance Smart Chain ensures transactions are both speedy and low-cost, a significant advantage over tokens based on Ethereum.
• Impressive APY: Early adopters can get an APY exceeding 350%. Though this rate will decline as more people enter the staking pool, the compounding effect should offset the impact. Over 750K tokens have already been staked on the BTCBSC platform at press time, highlighting strong investor trust.

Interested users can enter the BTCBSC Telegram channel for the latest updates.

3. Ecoterra (ECOTERRA) – New DeFi 2.0 Project Revolutionizing the Global Recycling Movement 

Environmental, social, and governance (ESG) investors might consider Ecoterra one of the best DeFi 2.0 projects. This is because Ecoterra is revolutionizing the global recycling industry. In its current state, the recycling movement is not achieving its goals. According to a recent study, only 35% of Americans recycle their consumed plastics. This figure is even lower in the emerging economies.

Ecoterra will solve this pressing issue through an incentivization model. Put simply, it has developed a recycle-to-earn concept that rewards people for recycling plastics, glass, paper, and other materials. The way it works is as follows: First, the Ecoterra app displays the nearest reverse vending machine (RVM) to the user. Then, the user scans their consumables before depositing them in the RVM.

The Ecoterra app will transfer ECOTERRA tokens to the user’s wallet. ECOTERRA tokens have various use cases. Holders can buy eco-friendly products, invest in green projects, and even offset their carbon footprints. The latter is achieved through tokenized carbon credits which are purchased and then removed from circulation.

Additionally, Ecoterra is also building a decentralized database that allows companies to buy recycled raw materials. When using ECOTERRA tokens for payment, discounts are offered. This DeFi 2.0 project is currently running its presale campaign. It has already raised more than $5.5 million, and currently, ECOTERRA tokens are priced at $0.00925.

This offers a slight discount from the confirmed exchange listing price of $0.01. Before investing, consider that Ecoterra has very bold ambitions. It will need to develop a vast network of RVMs to support its global community. Moreover, as a brand-new cryptocurrency, investors should expect high volatility. That said, these characteristics appeal to growth investors seeking above-average returns.

4. 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.

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 eToro. 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.

Cryptoassets are a highly volatile unregulated investment product.

5. 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.

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.

Cryptoassets are a highly volatile unregulated investment product.

6. 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.

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%.

Cryptoassets are a highly volatile unregulated investment product.

7. 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.

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 regulated exchanges like eToro, which supports instant fiat deposits.

Cryptoassets are a highly volatile unregulated investment product.

8. 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.

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%.

9. 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.

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.

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 Wall Street Memes is one of the best DeFi 2.0 presales. Having raised over $9 million already, the project has created a lot of hype in the DeFi 2.0 community.

Similarly, Ecoterra will appeal to DeFi 2.0 investors wanting exposure to green projects. It has built a recycle-to-earn mechanism that rewards people for recycling. Ecoterra is also in presale, having already raised over $5.5 million.

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.

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.

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 Wall Street Memes presale – 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.

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 Wall Street Memes. This innovative project is currently in presale, having already raised $9 million.

Those buying its native token, WSM, will secure a presale discount.

References

https://coinmarketcap.com/rankings/exchanges/dex/

https://www.reddit.com/r/wallstreetbets/

https://web.stanford.edu/class/cs224n/reports/final_reports/report010.pdf

https://www.swift.com/your-needs/financial-crime-cyber-security/know-your-customer-kyc/kyc-process

https://www.theguardian.com/us-news/2019/jul/02/us-plastic-waste-recycling

https://atomicwallet.io/academy/articles/what-is-arbitrum

https://coinmarketcap.com/view/arbitrum-ecosytem/

https://coinmarketcap.com/currencies/the-graph/

https://dydx.exchange/

https://coinmarketcap.com/currencies/ethereum/

https://lido.fi/ethereum

https://coinmarketcap.com/currencies/lido-dao/

https://coinmarketcap.com/currencies/the-graph/

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Kane Pepi

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Kane Pepi

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…

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