Users need ETH to pay network fees (known as gas fees) for each transaction on the network. Although ETH is technically a coin rather than a token, its utility in the DeFi space is unrivaled. Ethereum (ETH) & Protocol Gas CoinsĮthereum is the first blockchain to introduce smart contracts - programming logic that creates automated rules for crypto transactions - resulting in over 200 DeFi applications for lending/borrowing, decentralized trading, and yield farming.ĮTH is the native coin of the Ethereum blockchain. However, AAVE has utility within its own DeFi lending/borrowing protocol. AAVE isn’t required for all transactions on the Ethereum blockchain like ETH. For example, AAVE is an ERC-20 token that uses the Ethereum blockchain.
Users must have ETH to pay network fees for any transaction that takes place on Ethereum.Ī DeFi token can also use an existing blockchain rather than its own blockchain. For example, ETH is a DeFi coin and the native currency of the Ethereum blockchain. Terms “DeFi coin” and “DeFi token” are sometimes used interchangeably in the crypto space, yet their definitions have important differences.Ī DeFi coin runs on its own blockchain. A DeFi token can be any cryptocurrency that powers a decentralized exchange, lending/borrowing protocol, or even a digital advertising platform. The exact definition of a DeFi project varies. In this post, we’ll examine the four examples of popular DeFi projects and the tokens that power them, as well as the top DeFi tokens by market cap listed on Abra. Many DeFi protocols have their own cryptocurrencies, which users commonly refer to as DeFi tokens. DeFi offers a new global financial system that is more accessible and transparent than traditional finance.Īs of February 2022, DeFi applications held nearly $100 billion in crypto assets, according to DefiPulse. Decentralized finance (DeFi) is an exciting and constantly expanding sector within the blockchain space.
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