What the Top DeFi Protocols Reveal About the Ecosystem

DeFi’s growth may have slowed since its 2021 peak, but its core protocols continue to drive innovation in decentralized finance. As the ecosystem matures, top platforms reveal where users find the most value—and where the future of open finance is headed.

TLDR DeFi’s leading protocols—from Uniswap’s AMMs and Curve’s stablecoin swaps to Maker’s DAI loans, Compound’s lending markets, and Layer-2 trading on dYdX—demonstrate how smart-contract finance can run trustlessly, cheaply, and globally without intermediaries.

Decentralized finance is still pushing forward, but not without its setbacks. By late 2022, the total value locked (TVL) across all DeFi protocols dropped below $40 billion—its lowest point since early 2021 and a sharp fall from the $183 billion peak seen in November 2021.

These shifts remind you just how volatile and early-stage the space still is. For DeFi to keep evolving, protocols need to be more resilient, scalable, and secure. And if you're trying to get a better grip on how this ecosystem works, looking closely at the top protocols people actually use is a smart place to start.

What Makes DeFi Protocols Work Behind the Scenes

At the core of every DeFi protocol is a set of smart contracts—rules, code, and logic that run decentralized financial services without needing intermediaries. These protocols handle everything from trading and lending to yield farming and synthetic assets. But for them to function properly, every wallet interacting with them has to follow a shared rulebook baked into the protocol’s design.

Unlike traditional finance, most DeFi protocols operate autonomously. Take aggregators like Zapper, for example—they plug into multiple decentralized exchanges and liquidity pools to streamline access and help you find the best yields or trading rates without bouncing between platforms.

What makes top protocols stand out is their ability to simplify complex financial operations. MakerDAO is a good example. It allows you to borrow and lend by locking crypto into a smart contract to generate DAI, a stablecoin pegged to the dollar. Behind the scenes, smart contracts manage your collateral, liquidate risky positions, and maintain the peg. But as a user, you get access to a clean, straightforward interface—no need to wrestle with the backend mechanics to get value from the system.

10 DeFi Protocols Worth Paying Attention To

To really understand how DeFi is evolving, it helps to look at the protocols actually being used. Here’s a closer look at one making waves:

SaucerSwap

SaucerSwap is the first decentralized exchange built on the Hedera network, and it brings something different to the table—single-sided staking. Like Uniswap, it relies on the automated market maker (AMM) model, allowing users to trade digital assets directly while rewarding liquidity providers with staking incentives.

What sets SaucerSwap apart is Hedera’s infrastructure. With its low and predictable fees, the platform avoids some of the cost barriers you’ll find on DeFi apps built on more congested networks.

0x Protocol and the Role of Cross-Chain Bridges

The 0x Protocol is one of the go-to tools for moving assets between Ethereum and Polygon. It supports the trading of ERC-20 tokens and includes a front-end bridge that simplifies cross-chain transfers, giving users an easy way to shift assets while sidestepping high Ethereum fees.

Bridges like this are critical when you’re looking to reduce transaction costs and access faster networks. While 0x remains a widely used option, it’s not the only one. The Polygon POS Bridge, for instance, also facilitates seamless movement between the Ethereum and Polygon ecosystems, helping maintain fluidity across chains without compromising on security.

Uniswap V3 and the AMM Model That Changed Everything

Uniswap V3 stands as a cornerstone of decentralized trading on Ethereum. It helped pioneer the automated market maker (AMM) model, which broke away from traditional order books and opened the door for peer-to-peer asset swaps.

Here’s how it works: users supply tokens to liquidity pools, which power the protocol’s trading engine. In return, they earn a share of the fees generated by the trades they help facilitate. With V3, Uniswap added more control for liquidity providers, letting them concentrate capital within specific price ranges—making the system more efficient and, for the right strategies, more rewarding.

Curve: Precision Swaps for Pegged Assets

Curve is a decentralized exchange and DAO designed to handle swaps between assets that are closely pegged—think stablecoins like USDC and DAI, or wrapped assets like wETH. By focusing on assets with minimal price variation, Curve minimizes slippage and trading fees, making it a go-to choice for efficient stablecoin trades.

Its governance token, CRV, plays a dual role. It gives holders voting rights over protocol decisions and acts as a reward mechanism for liquidity providers who help keep the trading engine running smoothly.

dYdX: Trading With an Edge in DeFi

dYdX brings a more advanced trading experience to the decentralized space. Built on Ethereum and enhanced by STARK rollups from StarkWare, it offers over 30 trading pairs with options like spot, margin, and synthetic trading.

With its v4 upgrade, dYdX shifts even further toward community control. This latest version gives you a fully decentralized exchange that combines scalability with a robust suite of trading tools—delivering a high-performance experience without sacrificing control.

Maker Protocol and Oasis.app: Powering DAI Creation

The Maker Protocol lets you borrow against your crypto by locking it into smart contracts that generate DAI, a stablecoin pegged to the U.S. dollar. Oasis.app is the platform most people use to interact with Maker—it’s the user-friendly interface that makes the process of locking assets and creating DAI accessible.

Whether you’re new or experienced, Oasis has features that fit both ends of the spectrum. You can swap tokens quickly, manage vaults, or even leverage your position directly from the app without needing to write a single line of code.

Compound: Peer-to-Peer Lending, Simplified

Compound offers a decentralized way to lend and borrow crypto, cutting out traditional intermediaries entirely. You can supply assets to earn interest or borrow against your holdings—all handled automatically through smart contracts.

Interest rates adjust in real time, based on the supply and demand for each asset. As new blocks are added to the blockchain, those rates are recalculated, creating a dynamic and fully autonomous lending market you can tap into at any time.

Venus Protocol: Lending, Borrowing, and Minting on BNB Chain

Venus is a decentralized money market built on BNB Chain, designed for users who want to lend, borrow, or mint synthetic stablecoins—all without needing a central authority. If you’ve got a compatible wallet like MetaMask, you’re ready to engage with the protocol directly.

Venus pulls inspiration from both Compound and Maker. You can supply assets to earn interest, borrow against your holdings, or mint stablecoins by over-collateralizing your position. Its native governance token, XVS, gives holders the power to vote on protocol changes and can also be staked for additional rewards.

GMX: Leverage Trading Without Giving Up Custody

GMX brings high-leverage trading to DeFi while keeping control in your hands. From your own wallet, you can trade major assets like BTC and ETH using perpetual futures—going up to 50x leverage, if you’re willing to take the risk.

What makes GMX different is that it keeps you in charge of your funds. Unlike centralized exchanges, your assets stay in your wallet, even while you’re executing complex, high-stakes trades.

Getting Involved With DeFi Protocols

DeFi has come a long way, and much of that progress is thanks to the protocols that power its core functions—lending, asset management, yield farming, and more. These systems have reshaped how people interact with finance, giving anyone with internet access a way to tap into a trustless, decentralized ecosystem.

But the momentum behind DeFi depends heavily on the developers building these tools. The infrastructure, the experience, and the innovation—it all starts at the code level. Platforms like Hedera are helping streamline that process.

With its gossip protocol and predictable low fees, Hedera gives developers the foundation to build confidently. Setting up a test environment is simple, and with SDKs available in Java, JavaScript, Go, .NET, and other familiar languages, there’s nothing stopping you from contributing to the next wave of financial apps.

Bottom Line

The evolution of DeFi is a story of bold experimentation, smart contract innovation, and community-driven progress. While setbacks like declining TVL highlight the ecosystem's volatility, the continued development of standout protocols—from Uniswap and Maker to newcomers like SaucerSwap and GMX—proves that decentralized finance is far from stagnant.

These platforms aren’t just technical achievements; they’re redefining access to financial services. For users and developers alike, understanding and engaging with these top protocols is key to shaping what comes next in the future of finance.