Aave (AAVE)Īave is a relatively well established player in the DeFi space. Terra does this using the LUNA token to increase or reduce the supply. And unlike a fiat-backed stablecoin which is backed 1:1 by a traditional currency, an algorithmic stablecoin keeps its peg by using a smart contract to issue or buy coins. Terra's Chai payment platform is accepted by thousands of merchants in Korea and its Anchor savings platform is proving popular.Ī stablecoin's value is pegged to a non-crypto commodity like gold or a fiat currency like the U.S.
The idea is to be a complete digital financial system, based on stablecoins. It's a DeFi ecosystem that's underpinned by algorithmic stablecoins - dubbed the next generation of money. Terra grew almost 13,000% in 2021, but - like many cryptos - its price has fallen in 2022. But there are some DeFi specific tokens that are worth keeping an eye on. After all, Bitcoin (BTC), the first-ever crypto, was designed as a decentralized form of payment. In some ways, DeFi cuts across the whole cryptocurrency industry. DeFi continued to gain traction last year with increased adoption, more applications, and more money invested. The Ascent's best crypto apps for 2022 (Bonuses, $0 commissions, and more)ĭecentralized finance (DeFi) is an umbrella term for various apps that cut the middleman out of financial services, such as lending, borrowing, trading, and earning interest.
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