DeFi coins, live on one chart

On March 12, 2020, ETH fell by more than 40% in a day and the Ethereum network jammed. MakerDAO's liquidation auctions, which were supposed to sell off risky loans to the highest bidder, ran while almost nobody could get a transaction through. A handful of bots bid zero and won, walking away with about $8 million worth of ETH collateral for nothing. Maker had to mint and sell new MKR to cover the hole.

That day, which people still call Black Thursday, is a decent summary of decentralized finance. The code did exactly what it was written to do. The result was still a mess, and the fix came from the token holders.

This page tracks the coins behind protocols like Maker: lending markets, exchanges, stablecoin issuers and yield platforms, all running as smart contracts rather than companies. Each bubble is one DeFi token, sized and colored by how it's trading right now.

What is DeFi, stripped down

DeFi is financial software that runs on a blockchain and lets you trade, lend, borrow or earn yield without an account at a company. You connect a wallet, the smart contract holds the funds, and the rules are public code rather than terms of service. Nobody can freeze your account. Nobody can reverse your mistake either.

The DeFi summer of 2020 is when it went mainstream in crypto terms. Compound started paying its COMP token to anyone who lent or borrowed in June 2020, and within weeks every protocol was handing out tokens to attract deposits. "Yield farming" came from that summer, and so did a lot of the DeFi tokens still trading today.

Total value locked, the standard measure of how much money sits in DeFi contracts, peaked in late 2021 and then fell by about three quarters during 2022. Maybe a bit more, depending on which week you call the bottom. It has recovered a good part of that since, though a lot of the recovery is higher coin prices rather than new money arriving. Pull up crypto bubbles today on the home page during any DeFi rally and you'll usually see the whole market lifting with it.

Nobody agrees on how to say it, either. "Dee-fye" is the majority pronunciation. A stubborn minority says "deffy," which sounds like a cartoon duck, and plenty of conference panels manage both within a minute. It has no bearing on anything below.

DeFi coins on this chart, sorted by what they do

A DeFi token is usually not a share in the protocol. Most started as governance tokens, which give votes on things like fee levels and treasury spending, and only some have since added a direct link to the protocol's revenue. That link is what separates a token with a business behind it from one with a website behind it.

Read the third column before the bubble. HYPE is the obvious case study: Hyperliquid routes most of its trading fees into buying HYPE on the open market, and the token's run after its November 2024 airdrop tracked the exchange's volume far more closely than most DeFi coins track anything. I used to think fee-sharing tokens were a regulatory dead end that serious teams would avoid. Hyperliquid changed my mind on that, or at least on whether traders care. If you trade perps there yourself, the leverage math is the same as on any exchange, and a crypto futures profit calculator shows your ROE and liquidation price before you size the position.

This DeFi crypto list comes from CoinGecko's decentralized finance tag, which is generous. Wrapped assets, small forks and tokens from protocols that stopped shipping years ago all qualify, so the smallest bubbles on this page deserve more skepticism than the big ones.

DeFi protocols that earn money, and the ones that mostly don't

The single most useful question about any DeFi protocol is who pays it and why. Exchanges earn a slice of every swap. Lending markets earn the spread between what borrowers pay and what lenders receive. Stablecoin issuers like Sky earn interest on the collateral behind their coins, which increasingly means US Treasury bills, the same tokenized treasuries story covered on the RWA page.

Plenty of protocols earn very little once you strip out the token rewards they pay to attract users. A protocol that pays $10 million a year in token incentives to generate $3 million in fees isn't a business yet; it's a marketing budget. Token Terminal is good at exposing exactly this, since it separates revenue from incentives, and DefiLlama does a similar job for fees across thousands of protocols. If you want TVL or revenue numbers for these DeFi protocols, open those two before trusting any bubble on this page.

Most DeFi activity has also moved off Ethereum's main chain. Swaps and loans on Arbitrum, Base and other networks covered on the layer 2 crypto page cost cents, and a lot of the newer protocols launched there first.

Where DeFi yield comes from

Every DeFi yield has a source, and if you can't name it, the yield is probably you. The honest sources are few. Borrowers pay interest on lending markets. Traders pay fees to liquidity providers on exchanges. Ethena's synthetic dollar earns from funding rates on perpetual futures, which is real money in bull markets and can turn negative when traders get bearish.

Liquidity providing is where most people get surprised. You earn fees, but if one token in the pair moves sharply against the other, you end up with more of the loser, and the impermanent loss formula shows how fast that eats the fee income. On thin pools, the trades you make getting in and out cost you too, so set a slippage tolerance that fits the pool's size rather than accepting a wallet's default.

Dashboards also love to quote APY, which assumes you compound every period, rather than APR. The gap matters on high yields, and a crypto APY calculator will show how much of a quoted 40% depends on compounding you'd have to do by hand. Most double-digit yields are paid in the protocol's own token, too. If that token's bubble is red for a month, the yield was never 40%.

DeFi vs CeFi, and 2022's accidental experiment

2022 ran a stress test nobody planned. Celsius froze withdrawals in June and Voyager went bankrupt in July; FTX followed in November. All three were centralized companies that took customer deposits and promised yield. Meanwhile Aave, Compound and Maker kept running. Loans that went underwater were liquidated on-chain, in public, often within minutes, and depositors could withdraw the whole time.

That's the strongest argument for DeFi, and it's a real one. The counterargument is that DeFi swaps company risk for code risk. In March 2023 an attacker drained about $197 million from Euler Finance through a flaw in its lending logic (and then, strangely, gave nearly all of it back). In July 2023 a bug in an old version of the Vyper programming language let attackers pull around $70 million from several Curve pools. No company went bankrupt in either case. The money still left.

CeFi tends to fail when people lie and DeFi when code is wrong. Neither is rare.

A hack headline, as the bubbles see it

Say a mid-sized lending protocol announces an exploit on a Tuesday morning. Its token's bubble turns deep red within one refresh cycle, and over the next few hours the red spreads to other lending tokens, even ones with unrelated code, because traders sell the whole sector first and read the post-mortem later. Switch to market cap mode and the damage usually looks smaller than it felt, since the big names barely move while the small ones get hammered.

Before deciding it's a DeFi problem rather than a market one, look at Bitcoin. If it's red too, the hack is just the story attached to a normal sell-off. The crypto fear and greed index tells you which one you're looking at faster than any headline. And if you're tempted to buy the unaffected lending tokens on the dip, put them next to each other in an altcoins comparison first: after most DeFi hacks, the sector's correlation spikes for a week or two and then drifts back, which is exactly when the difference between a protocol with revenue and one with a website starts to show.