The total value locked (TVL) in the decentralized finance (DeFi) ecosystem recently surpassed $50 billion, considering multiple projects. Notably, this has made DeFi more valuable than countries’ economies like Uganda regarding their GDP.
At this point, the cryptocurrency market seems to be preparing for a bull market and an altseason in 2024. In this context, Finbold picked three DeFi projects to invest in for the next year.
Essentially, we looked at key metrics from DefiLlama on December 14. Some are the total value locked, the ratio between market cap and TVL (MCap/TVL), and generated fees and revenue.
Best DeFi protocols by total value locked. Source: DefiLlama
Best DeFi projects: Maker Protocol (MKR)
Maker is a collateral-based protocol created to support the multi-collateralized stablecoin DAI. Interestingly, MKR was one of the best performers during the recent bear market and continues to print gains.
The governance token MKR is traded at $1,350.34 at the time of publication, up 163% year-to-date (YTD) from $513.15.
Maker (MKR) YTD price chart. Source: Finbold
Maker is the second most valuable DeFi project, with $8.49 billion in total value locked, up 2% in the last month. Notably, MKR has an MCap/TVL ratio of 0.15, which suggests an oversold capitalization and a good investment opportunity.
Is Aave (AAVE) a DeFi project to invest in for 2024?
Similarly, Aave has a higher total value locked than its token’s market cap by a ratio of 0.22. The most popular lending DeFi project already supports more than 10 chains and features among the four highest TVLs.
As of writing, AAVE had $6.39 billion in TVL and generated more than $15 million in fees in the last 30 days, just like Maker.
The protocol’s native token is trading at $95.68 by press time, which is 84% higher than its price in early 2023, at $51.93.
Aave (AAVE) YTD price chart. Source: Finbold
Uniswap (UNI), the leading DEX
Meanwhile, the leading decentralized exchange (DEX) is also featured among the best DeFi projects for 2024. Uniswap currently has $4.08 billion in total value locked, up 10% in a month, sitting in the 5th position by TVL.
Impressively, the protocol has generated more than $50 million in fees in the last 30 days, directly rewarding its investors.
In comparison to the other two DeFi projects, UNI could be deemed overbought, with a market cap 1.17 times higher than its TVL. Nevertheless, its ability to generate gains through fees and the high observed demand work in the protocol’s favor.
All this contributes to the token’s shy performance in 2023, up 22% from $5.16 to $6.29 year-to-date.
Uniswap (UNI) YTD price chart. Source: Finbold
It is important to understand that all the aforementioned assets are among the most solid DeFi projects right now. However, cryptocurrencies remain categorized as risk assets, and proper risk management is a must. There are no guarantees of returns, even for the most valuable financial ecosystems.
Besides decentralized protocols, investors can also look to the top DeFi infrastructures, as previously reported by Finbold.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
