Which cryptocurrencies are commonly used in DeFi protocols and why?

3 answers

• Arildsen EbsenDec 10, 2021 · 4 years ago
  One of the most commonly used cryptocurrencies in DeFi protocols is Ethereum (ETH). Its popularity can be attributed to its smart contract functionality, which allows for the creation and execution of decentralized applications (dApps) and smart contracts. This makes it an ideal choice for DeFi projects that require programmable money and automated financial transactions. Additionally, Ethereum has a large and active developer community, which contributes to the continuous innovation and development of DeFi applications on the platform. Another popular cryptocurrency in DeFi protocols is Binance Coin (BNB). BNB is the native cryptocurrency of the Binance exchange, which is one of the largest and most reputable cryptocurrency exchanges in the world. BNB's popularity in DeFi can be attributed to its utility within the Binance ecosystem, as it offers various benefits such as reduced trading fees and participation in token sales on the Binance Launchpad. Additionally, BNB has gained wider adoption due to its integration with other DeFi platforms and protocols. Other cryptocurrencies commonly used in DeFi protocols include Chainlink (LINK), Uniswap (UNI), and Aave (AAVE). Chainlink is a decentralized oracle network that provides reliable and tamper-proof data feeds to DeFi applications, ensuring the accuracy and security of on-chain transactions. Uniswap is a decentralized exchange protocol built on Ethereum, which allows for seamless token swaps and liquidity provision. Aave is a decentralized lending and borrowing platform that enables users to earn interest on their crypto assets or borrow against them. These cryptocurrencies are popular in DeFi due to their unique functionalities and the value they bring to the ecosystem.
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• sun DavidMay 25, 2023 · 2 years ago
  In DeFi protocols, cryptocurrencies like Ethereum (ETH), Binance Coin (BNB), Chainlink (LINK), Uniswap (UNI), and Aave (AAVE) are commonly used. Ethereum is the most popular choice due to its smart contract capabilities, which enable the creation of decentralized applications and programmable money. Binance Coin is widely used in DeFi because of its utility within the Binance ecosystem, offering benefits such as reduced fees and participation in token sales. Chainlink provides reliable data feeds to DeFi applications, ensuring the accuracy of transactions. Uniswap enables seamless token swaps and liquidity provision, while Aave offers decentralized lending and borrowing services. These cryptocurrencies are favored for their functionalities and the value they bring to the DeFi space.
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• IBOYITETE HOPEMar 07, 2021 · 4 years ago
  When it comes to cryptocurrencies commonly used in DeFi protocols, Ethereum (ETH) takes the lead. Its smart contract functionality allows for the creation of decentralized applications and programmable money, making it a perfect fit for DeFi projects. Ethereum's large developer community also contributes to its popularity, as it ensures continuous innovation and improvement of DeFi applications. Additionally, Binance Coin (BNB) is another frequently utilized cryptocurrency in DeFi. As the native token of the Binance exchange, BNB offers various benefits within the Binance ecosystem, attracting users to participate in DeFi activities. Other cryptocurrencies like Chainlink (LINK), Uniswap (UNI), and Aave (AAVE) also play important roles in DeFi protocols, providing reliable data feeds, decentralized exchange services, and lending/borrowing functionalities respectively.
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