Top 5 Best DeFi Tokens for Smart Investors

2020 is undoubtedly one year that will go down in history books. Far from the global health and economic crisis resulting from the pandemic, this year has seen an explosive growth of decentralized finance. In fact, we can only compare it to the 2017 ICO boom. 

It goes without saying that the booming industry has seen developers come up with various DeFi tokens that provide different solutions. So, how do you, as a smart investor, choose the best tokens for your portfolio. 


Well, you really are spoilt for choice when it comes to DeFi tokens. However, if you’d like to make a sound investment decision, you’d better be on the lookout for the best and most promising DeFi tokens. 

It doesn’t sound like an easy decision, which is why we are here to the rescue. Have a look at the five best DeFi tokens that are totally worth your time and money. 

Chainlink (LINK)

Smart contracts are an essential feature of decentralized finance, and the Chainlink Network aims to create a world connected through smart contracts. The decentralized oracle network allows for the creation of smart contracts that are securely attached to real-time data. This functionality makes Chainlink ideal for sending payments anywhere and connecting to any external API. 

The platform’s native token, LINK, has been rising steadily over the last year. At the time of writing, LINK had a $5.299 billion market capital and was trading at $13.633. The proven track record of completed milestones, plus the token’s growth potential, make LINK one of the best DeFi tokens to invest in. 

Wrapped Bitcoin (WBTC)

The introduction of Bitcoin to the world opened up an entire world of possibilities. However, despite all the fantastic features it presented, the Bitcoin network lacked in several ways, which initiated the search for better blockchains that would be more flexible than the rigid parent technology. This search eventually led to the development of the Ether network, which is the core of most DeFi projects. 

Now, suppose you could combine the best features of Ether and Bitcoin? Wouldn’t that be amazing?

Wrapped Bitcoin does precisely that. The token enjoys a 1:1 ratio backing with bitcoin. It comes with the strength of the pioneer cryptocurrency, coupled with the flexibility of ERC-20 tokens. This feature makes it easier for the token to standardize bitcoin to ERC-20, allowing for the creation of Bitcoin smart contracts. 

WBTC is currently trading at $22,703, a 6.07 % increase over the last 24 hours. 

Compound (COMP)

Borrowing and lending are some of the critical features of the DeFi industry. If you’re looking to invest in a token offering lucrative options for these functionalities, you should consider looking at COMP

The ERC-20 token asset gained the massive attention of the DeFi world after its value skyrocketed immediately after its launch, before correcting to normal levels. It is currently trading at $169.984 and has increased by 10% over the last 24 hours at the time of writing. 

Many will argue that COMP isn’t worth investing in since it is only a governance token. However, Compound Protocol, the network behind the token, was one of the first to leverage decentralization in borrowing and lending, a concept that has been around for ages. As more investors realize this protocol’s potential, its value will increase, getting more people on board. 


Investing in different DeFi and crypto projects will have you working with various blockchains. Therefore, you’re going to need one or two projects that allow for true interoperability, which is precisely what Polkadot offers. The network developed by Ethereum’s co-founder, Gavin Wood, has its native token as DOT, which is currently trading at $4.902

The DOT token powers the Polkadot network and fulfills three purposes; staking, bonding, and governance. Staking helps to keep the network secure by incentivizing DOT token holders. The game theory requires that holders behave honestly and those who don’t lose their stake in the network. 

Holders also have complete control over the protocol. They have a say in managing protocol upgrades and fixes and other exclusive privileges that would typically be given to miners on other platforms. 

One of the DOT token’s best features is its bonding, which is a form of proof of stake. The mechanism makes it easier to add new parachains to the networks by bonding tokens. If there are any outdated or non-useful parachains, removing the bonded tokens gets rid of the chains. 

The rigidity of blockchains and the inability to transfer and receive data is a significant setback in the crypto world. Therefore, Polkadot’s ability to transmit arbitrary data between chains and tokens makes this project a worthy investment venture. 

DeFiChain (DFI)

Everyone in the crypto space knows that most DeFi projects are built on Ethereum, the world’s second-largest blockchain network. However, if you’re after a DeFi project built on the King coin, you should undoubtedly check out DeFiChain. This network brings together the security and immutability of Bitcoin and the best of Proof of Stake mechanisms. 

One of the features that make DeFiChain stand out is that it’s a non-Turing complete protocol. Ethereum is a Turing blockchain, which compromises its security. Therefore, anything can happen on the protocol, which is not the case for DeFiChain. Having the network’s core built on Bitcoin also helps to increase the levels of security. 

The DFI token serves several functions on the network. Besides using the token as collateral, for staking, and paying network fees, users can also use DFI to create custom DCT tokens. This unique functionality makes DeFiChain the ideal investment option for crypto enthusiasts looking to make their cryptos work for them. Over the last 24 hours, DFI has increased in value by 16.32% to trade at $0.76593.

Parting Shot

The DeFi scene has exploded in 2020, with new tokens being released by the day. As a smart investor, you’ll undoubtedly be on the lookout for the ideal tokens that will make you more money from your investment. 

When choosing the ideal DeFi token, be sure to check out the solution it provides in the crypto world, its growth potential, and whether it has a proven track of accomplished milestones. It would also be best if you had a look at the team behind the project to have a clear picture of what to expect.

Choosing smart tokens for your DeFi portfolio is only the first step, but many investors will agree that it’s a crucial one. Therefore, if you have no idea where to start, the five tokens in this article should give you a pretty good head start. So, head on over to the official sites, read through their documents, and decide which ones to choose. All the best in your investment ventures!


By Edith M.

Edith is an investment writer, trader, and personal finance coach specializing in investments advice around the fintech niche. Her fields of expertise include stocks, commodities, forex, indices, bonds, and cryptocurrency investments.

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