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19 DeFi Startups to Watch in 2021

The amount of money currently locked in DeFi stands at $15 billion, up from only $700 million at the start of 2020.

To help you get a grasp on what’s happening in this exciting space, we put together a list of 19 rapidly growing DeFi startups to keep an eye on, based on search growth data and VC funding.

Read below for our top DeFi startups that are establishing themselves as leaders in the decentralized finance space.

1. Uniswap

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5-year search growth: 99x+

Search growth status: Regular

Year founded: 2018

Location: Brooklyn, NY

Funding: $11M (Series A)

What they do: Uniswap is one of the original decentralized finance operators, known for their airdrop (giveaway) of 400 UNI tokens to anyone who interacted with Uniswap or used the service. The airdrop of tokens back then was worth $1200. Today? Around $13,000. Described as “a decentralized protocol for trades on the Ethereum blockchain”, to date Uniswap has processed over $209B in volume.

2. MakerDao

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5-year search growth: 99x+

Search growth status: Regular

Year founded: 2014

Location: Santa Cruz, California

Funding: $27M (Series Unknown)

What they do:

MakerDao brands itself as a decentralized autonomous organization, using the world’s first “unbiased currency” called Dai. Maker is an entire ecosystem where holders of Dai can vote on changes to the Maker protocol itself (the code underlying it), borrow money by putting up Dai as collateral, and use a wallet called Oasis for storing virtual currencies.

3. Compound

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5-year search growth: 44%

Search growth status: Regular

Year founded: 2017

Location: San Francisco, CA

Funding: $25M (Series A)

What they do: Compound Finance is an open-source interest rate protocol that is working to make novel financial applications available to the masses. As of today, there is nearly $15B locked in the Compound DeFi system. Users of Compound can earn interest ranging from 2%-8.5% by supplying crypto to the ecosystem. As one of the largest players in the space, Compound has been backed by large investors like Andreeson Horowitz, Coinbase, and Bain Capital.

4. AAVE

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5-year search growth: 228%

Search growth status: Regular

Year founded: 2017

Location: London, UK

Funding: $24M (Initial Coin Offering)

What they do: AAVE is one of the biggest players in the DeFi space. Working as a lending and borrowing marketplace, users can lend crypto and get aTokens at a 1:1 ratio, leading to interest that grows over time. Users can also take out “flash loans”, which are trustless, uncollateralized loans where borrowing and repayment occur at the same time.

5. Dharma DeFi

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5-year search growth: 6200%

Search growth status: Regular

Year founded: 2017

Location: San Francisco, CA

Funding: $7.1M (Series A)

What they do: Simply put, Dharma Labs is an Ethereum wallet that connects directly to a user’s bank account. One of the biggest challenges with DeFi is making it simple enough for the average non-technical person to use. Dharma aims to solve that through its app by bridging traditional banking with decentralized finance options.

6. Synthetix

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5-year search growth: 2900%

Search growth status: Regular

Year founded: 2017

Location: Sydney, Australia

Funding: $12M (Venture Round)

What they do: Synthetix is the leading platform in the DeFi space for derivatives trading that is on-chain, secure, and allows users to stake SNX tokens. With almost $2B locked in the platform, it’s clearly taken off worldwide. Assets like gold, U.S. dollars, and more are available within the Synthetix ecosystem.

7. Balancer

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5-year search growth: 15%

Search growth status: Regular

Year founded: 2018

Location: Lisbon, Portugal

Funding: $5M (Series A)

What they do: Like many of the other DeFi startups on this list, Balancer works as a decentralized protocol for swapping tokens, providing liquidity pools, and working as an automatic market maker.

Balancer’s value proposition is that instead of paying a portfolio manager to rebalance your portfolio, you collect fees from traders who rebalance your portfolio for you.

8. 0x Protocol

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5-year search growth: 1800%

Search growth status: Regular

Year founded: 2016

Location: San Francisco, CA

Funding: $15M (Series A)

What they do: 0x Protocol is aiming to power the future of DeFi applications through its liquidity books that aggregate data and provide fast, accurate pricing.

0x is innovative because it allows peer-to-peer swapping of tokens through the 0x protocol, which further builds up their proprietary DeFi network.

9. Reflexer Labs

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5-year search growth: 8800%

Search growth status: Regular

Year founded: 2020

Location: San Francisco, CA

Funding: $5.8M (Series Unknown)

What they do: Reflexer Labs understands the incredible amount of volatility in DeFi and in crypto as a whole. This is why they’ve created the RAI, an Ethereum backed stable asset that’s used as collateral with other DeFi protocols, including many on this list.

10. Bancor

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5-year search growth: -80%

Search growth status: Peaked

Year founded: 2016

Location: Zug, Switzerland

Funding: $152.3M (Initial Coin Offering)

What they do: You might notice the -80% search growth and be a little off-put by Bancor. Worry not, as Bancor is still getting started. Bancor was one of the first players in DeFi and thus encountered peaks and valleys along the way.

Billed as the people’s bank, it allows users to generate cryptocurrencies and functions as yet another decentralized exchange.

What makes Bancor unique is that it was one of the first, evidenced by its massive funding round via ICO. Today, the start-up has grown quite a bit but is still working on innovation internally.

11. Nexus Mutual

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5-year search growth: 150%

Search growth status: Regular

Year founded: 2017

Location: London, UK

Funding: $~200K (Seed Round)

What they do: Nexus Mutual is different from many of the DeFi start-ups on this list because it’s an insurance company. Using the Ethereum blockchain, users from anywhere in the world can pool their risk together without the need for an intermediary (like a traditional centralized insurance company).

Nexus Mutual started out with Smart Wallet insurance, which protects against hacks or lost funds in the event of an emergency. Nexus plans to roll out more insurance products in the future.

12. Yearn Finance

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5-year search growth: 6500%

Search growth status: Regular

Year founded: 2020

Location: N/A

Funding: N/A

What they do: Yearn Finance is the go-to platform for “yield farmers” — those looking for arbitrage opportunities by providing tokens as liquidity to different networks.

Using automation, a yield farmer can utilize Yearn to maximize profits and automatically rebalance without having to do the mental work of shifting from platform to platform, token to token.

13. Rocketpool

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5-year search growth: 3300%

Search growth status: Regular

Year founded: 2016

Location: Brisbane, AU

Funding: Not Disclosed (Seed Round)

What they do: If you’ve had any exposure to the cryptocurrency world, you might have heard the term “staking”. Staking basically means using crypto to help secure the blockchain while earning rewards, interest, or tokens for your participation.
Staking on the Ethereum blockchain is too technical, complicated, and risky for many folks without a coding background. Enter Rocketpool. Rocketpool is a staking option that allows users to stake with less than required minimums while making the process more accessible.

14. 1Inch

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5-year search growth: 316%

Search growth status: Regular

Year founded: 2017

Location: Castilla-La Mancha, Spain

Funding: $12M (Series A)

What they do: 1Inch is almost brand new, and not much information exists besides the fact they’re trying to create a new DeFi environment that contains multiple decentralized protocols within one environment. 1Inch will be governed by a DAO (Decentralized Autonomous Organization) where users get voting rights based on holding the 1Inch token.

15. Nifty Gateway

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5-year search growth: 6200%

Search growth status: Regular

Year founded: 2016

Location: New York, NY

Funding: Acquired by Gemini (NYC)

What they do: By now, you’ve probably heard NFT’s mentioned somewhere or by someone at least once. Nifty Gateway, recently acquired by Gemini and the famous Winklevoss twins, is building an NFT marketplace akin to something like Supreme, the fashion brand.

Exclusive, limited-edition drops by famous artists frequently happen on Nifty, which aims to bring the DeFi concept of decentralizing artwork to the NFT market.

16. dYdX

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5-year search growth: 187%

Search growth status: Exploding

Year founded: 2017

Location: San Francisco, CA

Funding: $22M (Series B)

What they do: dYdX is one of the leading DeFi exchanges currently out there, and also one of the few that has raised money the traditional way (Series A, Series B).

The exchange runs on audited smart contracts on the Ethereum blockchain, allowing DeFi to commence but with the security and flexibility of a more centralized exchange, like a Coinbase.

dYdX was founded by a former Coinbase engineer, Antonio Juliano.

17. Kyber Network

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5-year search growth: 5100%

Search growth status: Regular

Year founded: 2017

Location: Singapore

Funding: $60M (Initial Coin Offering)

What they do: Kyber Network is a DeFi system that allows users to easily swap and convert different digital assets. One of the best features is that users can be paid in any token/crypto seamlessly in their Kyber wallet, but are also able to convert that payment instantly into crypto of their choice.

Vendors who use Kyber can receive payment in a variety of cryptocurrencies, but can also exchange automatically for another desired crypto, like the US Dollar Coin.

18. Loopring

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5-year search growth: 2200%

Search growth status: Regular

Year founded: 2017

Location: Shanghai, China

Funding: $45M (ICO)

What they do: Loopring is another key player in the DeFi system. Loopring is primarily used primarily by traders and institutions that want to seamlessly integrate trades across exchanges. This usually results in reduced trading costs.

Specifically, for exchanges and institutions, Loopring helps match order flows while allowing on-chain transaction processing and payment.

19. ChainLink

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5-year search growth: 1200%

Search growth status: Regular

Year founded: 2014

Location: Grand Cayman, Cayman Islands

Funding: $32M (ICO)

What they do: Chainlink works as one of the essential cogs in the DeFi system. To have a decentralized financial system, you need accurate, reliable, and cutting-edge information on pricing and asset movements.

Chainlink is an oracle, or intermediary, between complicated smart contracts and allows them to work together in unison. Seemingly unrelated smart contracts can be connected through using Chainlink.

Conclusion

So there you have it. Our list of 19 fast-growing DeFi startups that are changing perceptions around what money really is, and what it can do.

These DeFi start-ups all feature a tight user experience across their products, sleek branding and marketing, but most importantly a whole new way to move money in the digital age.

Last Updated: 
April 21, 2021
Josh Howarth
Co-founder of Exploding Topics.

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