9 Best DeFi 2.0 Tokens for 2024 Compared

The Best DeFi 2.0 Tokens are redefining the decentralized finance landscape by introducing innovative protocols and features.

As the DeFi space evolves, DeFi 2.0 projects bring enhanced security, scalability, and user autonomy. These tokens address issues like liquidity and governance, making the DeFi ecosystem more sustainable and accessible.

With total value locked (TVL) surpassing $100 billion as of March 2024, the sector’s potential is undeniable.

DeFi 2.0 tokens empower users to maximize their yield and participate in decentralized systems without the limitations of earlier models, ushering in the next phase of financial independence.

Finding DeFi 2.0 gems: Our selection process

To select the most promising DeFi 2.0 tokens, we employed a multi-factor approach:

1. Established DeFi 1.0 Leaders: We considered prominent DeFi 1.0 protocols with solid track records and loyal communities, prioritizing tokens with confirmed upgrades or migrations to DeFi 2.0 functionalities.
2. Innovation and Utility: We evaluated projects that push the boundaries of DeFi 2.0, offering unique features like interoperability, advanced lending options, or unexplored DeFi niches.
3. Market Performance and Traction: We analyzed token price performance alongside key metrics like Total Value Locked (TVL) and user growth to identify DeFi 2.0 projects gaining significant traction.
4. Community and Development Activity: We assessed the project’s team expertise, community engagement, and ongoing development activity to gauge its potential for long-term success.

Combining these factors, we aimed to create a well-rounded list of DeFi 2.0 tokens positioned for significant growth in 2024.

Listing our 10 best DeFi 2.0 tokens for 2024

This section explores DeFi 2.0’s hottest tokens, helping you diversify your decentralized finance portfolio. Get ready to explore the future of finance with our top picks for the year’s hottest DeFi 2.0 tokens.

Best DeFi 2.0 tokens to watch in 2024

The DeFi 2.0 ecosystem is experiencing an exciting wave of innovation, with numerous groundbreaking projects emerging rapidly.

This section highlights seven DeFi tokens that deserve your attention. These projects were chosen based on their potential to bring about significant changes, the strength of their teams, and the level of engagement within their communities.

1. Flockerz (FLOCK): Groundbreaking Vote-to-Earn meme coin with high presale staking APY

We have picked Flockerz ($FLOCK) as the best DeFi 2.0 coin to invest in 2024. This exciting new meme coin offers a new vote-to-earn system that allows its community to participate in voting for the future of the Flockerz ecosystem.

So far, the Flockerz presale has raised over $1 million in just a few weeks. During these early stages, users can stake $FLOCK, the native token, for over 1,600% APY. 25% of the $FLOCK supply is reserved for staking rewards, giving ample resources to support the Flockerz ecosystem in the long term.

The FlockTopia decentralized autonomous organization, or DAO, is the center of the Flockerz platform. With 25% of the total token supply held to secure the Flock Vault for vote-to-earn rewards, the meme coin offers more $FLOCK rewards the more a user votes.

According to the Flockerz roadmap, the project will launch the FlockTopia DAO after its presale has concluded. Until then, users can continue snagging $FLOCK, which currently costs $0.0058394 per token.

Ticker	FLOCK
Max. Supply	12B
Blockchain platform	Ethereum
Inception	2024

2. Pepe Unchained (PEPU): Ethereum Layer-2 meme coin with $16M raised on presale

Pepe Unchained ($PEPU) is a trending meme coin that’s built on the layer-two (L2) network of the Ethereum blockchain. 

It offers higher scalability, charges lower gas fees from token holders, and can conduct transactions at faster speeds. Pepe Unchained reduces operational costs by offloading transactions from the main chain to the L2 network. 

On the platform, $PEPU token holders can earn double the staking rewards compared to other networks. At the time of writing, $PEPU can be staked to earn an APY (Annual percentage yield) of 103%.

Another 20% of the token supply is allocated through the ongoing presale. Currently, $PEPU is priced at $0.01177 per token. Pepe Unchained, one of the top presales in 2024, has raised more than $22 million in a few months. 

Ticker	PEPU
Max. Supply	8B
Blockchain platform	Ethereum
Inception	2024

3. Crypto All-Stars (STARS): Earn 3x APY Rewards When Staking Top Meme Coins

Crypto All-Stars ($STARS) is an exciting new DeFi 2.0 crypto project that lets users stake the top meme coins in one place. The ‘MemeVault’ allows users to stake and hold 11 meme coins, including $DOGE, $PEPE, and $SHIB.

$STARS, the native token, provides staking utility and extra rewards for token holders. In particular, staking $STARS gives users 3x more rewards from their other staked meme coin holdings.

Within a few weeks, the $STARS presale has already raised over $2.6 million. Incremental price increases of the token follow this steady growth, so purchasing $STARS as soon as possible is an excellent strategy to get it at a discounted price. The token is worth $0.0015188 at the time of writing.

Token holders can also stake $STARS while its presale is ongoing. Annual rewards for staking the token are at 573% APY dynamic, and paver 1.2 billion $STARS have already been staked. View the Crypto All-Stars whitepaper to learn more, and subscribe to the Telegram channel for more updates.

Ticker	STARS
Max. Supply	42.069B
Blockchain platform	Ethereum
Inception	2024

4. FreeDum Fighters (DUM): Political Satire Crypto Project With Earn Stake-to-Vote Rewards

Another DeFi token is FreeDum Fighters ($DUM). This satirical meme coin plays on the upcoming US presidential election and features two fictional characters: Magatron and Kamacop. Users can “vote” for either character by staking $DUM.

In particular, FreeDum Fighters has two staking pools, one for each character. Token holders can vote by staking their $DUM on either of the pools. This earns points for the respective party. Currently, Magatron is in the lead and offers 411% APY returns. The lagging pool will offer higher returns, with Kamacop’s pool offering 1,782% APY rewards. 

Besides staking, community members can earn other gamified rewards through the weekly debates on the FreeDum Fighters. The winning side earns airdrop rewards in the form of $DUM. 10% of the total $DUM supply is allocated to debate rewards.

The $DUM presale has garnered over $254K within weeks, with the token currently priced at $0.00005. Read the FreeDum Fighters whitepaper and join the Telegram channel for the latest updates.

Ticker	DUM
Max. Supply	270B
Blockchain platform	Ethereum, Solana, Binance Smart Chain, Base
Inception	2024

5. Sponge V2 (SPONGEV2): Continuation of the 2023 Sponge Token with New P2E Features

Another Defi 2.0 token to buy is Sponge V2 ($SPONGEV2), the new version of the Sponge meme coin that reached a $100 million market cap in 2023. The new token aims to follow the success of its predecessor with new tokenomics and a new blockchain, the layer-2 network Polygon.

With $SPONGE V1 discontinued last February 2024, the Sponge V2 project capitalizes on the active Sponge community, which has over 13,000 token holders and gained 30 thousand social followers in just days. 

Since $SPONGEV2 now resides on the Polygon chain, token holders will benefit from cheaper transactions and faster crypto transfers. At the time of writing, $252k worth of $SPONGE have been staked and bridged on the platform.

First-time Sponge token users can buy $SPONGEV2 with MATIC or USDT. They can also stake the token for 27% APY. Over 15 billion native tokens have been staked on the Sponge V2 project. For more details, see the Sponge V2 whitepaper and join the Telegram channel for the most recent updates.

Ticker	SPONGEV2
Max. Supply	150B
Blockchain platform	Polygon
Inception	2023

6. SpacePay (SPY): Facilitates Crypto Payments for POS Systems

SpacePay ($SPY) is a London-born crypto startup that aims to enhance crypto payments with its point-of-sale solution. The project has already been launched, unlocking a network of over 400 million new customers to businesses that wish to integrate their POS systems.

The presale was launched in 2023, paving the way for crypto transactions in today’s digital age. So far, the platform supports over 325 crypto wallets for day-to-day purchases. Payouts to merchants support traditional cryptocurrencies like Ethereum.

Based on the SpacePay tokenomics, the project has a total supply of 34 billion $SPY, with 20% or 6.8 billion native tokens. So far, $449K has been raised in the $SPY presale, with the current token price at $0.001964 per token.

Interested participants can buy $SPY with ETH, USDC, USDT, BNB, MATIC, AVAX, and a credit card. Users who connect their crypto wallets to buy $SPY during the presale can claim their tokens after the first successful DEX listing. Read the Space Pay whitepaper to learn more, and join the Telegram channel for the latest news.

Ticker	SPY
Max. Supply	34B
Blockchain platform	Ethereum
Inception	2023

7. Alchemix (ALCX): DeFi innovation with self-paying loans

Alchemix is a DeFi 2.0 protocol shaking things up with synthetic assets. Liquidity providers deposit DAI stablecoins to mint alUSD, a synthetic token representing a future yield on the deposit. This unlocks immediate access to the value of their deposit without waiting for yields to accrue.

Borrowing with future yield

Alchemix offers a unique take on lending. Deposit DAI and borrow up to 50% of its value as alUSD.

Alchemix automatically puts your DAI in a Yearn vault, generating a yield (around 12% APY) that seamlessly repays your loan over time. Borrowers can use alUSD for purchases or stake it within Alchemix for even more returns.

Additionally, Alchemix boasts:

• Vaults: Similar to other DeFi platforms, Alchemix offers Vaults to generate yield advances. These Vaults currently accept DAI as collateral.
• Transmuter: This built-in tool ensures a 1:1 peg between alUSD and DAI, allowing users to redeem their synthetic tokens for the underlying asset anytime.

Project review

This DeFi protocol is a pioneering platform that brings innovation to decentralized finance (DeFi) lending. Through Alchemix, users can swiftly access the capital they deposit while earning yield.

The platform’s automatic yield-based repayment system streamlines loan management. With its distinctive features, Alchemix stands out as a formidable contender in the category of Best DeFi 2.0 Tokens.

8. KlimaDAO (KLIMA): Building a global marketplace for climate action with DeFi 2.0

KlimaDAO is a frontrunner in DeFi 2.0, building the infrastructure for a transparent and global Digital Carbon Market. Their KLIMA token fuels this marketplace, aiming to accelerate climate finance through DeFi mechanisms.

Accelerating climate finance

In 2022, KlimaDAO processed over $4 billion in carbon credit trades. Its treasury also grew to over $100 million, demonstrating a robust foundation for future growth.

KlimaDAO’s innovation lies in using DeFi 2.0 to create a market for real-world carbon credits.

Their Carbonmark platform simplifies institutional access to carbon credits and KlimaDAO’s infrastructure. Partnering with Circle, Carbonmark allows institutions secured custody and easy USD conversion for institutions.

Project review

KlimaDAO’s impact is undeniable—their protocol powers platforms like Carbonmark and partners with organizations like Polygon and Circle.

This empowers airlines, automakers, and even celebrities like Mark Cuban to meet sustainability goals. With over 100,000 token holders and a proven track record, KlimaDAO is a key player in shaping the future of DeFi 2.0 and sustainable finance.

9. Abracadabra (SPELL): Unlocking leverage for DeFi 2.0

Abracadabra stands out in the crowded DeFi 2.0 landscape by unlocking liquidity for yield farmers. This innovative platform lets users collateralize interest-bearing tokens (ibTKNs) – like those earned from Curve, Yearn, or SushiSwap – to borrow stablecoins.

Borrow USD coins with interest-bearing tokens

Abracadabra.money offers a unique twist on DeFi lending:

• Collateralize ibTKNs: Unlike most platforms, Abracadabra accepts ibTKNs, which continuously generate returns, as collateral for loans. This frees up liquidity trapped in these tokens.
• Mint Magic Internet Money (MIM): Abracadabra’s native stablecoin, MIM, is pegged to the US dollar and can be minted using ibTKNs as collateral. MIM boasts multi-chain functionality, allowing easy transfer across various blockchains.
• Governance via SPELL: SPELL token holders have a say in Abracadabra’s future. They can vote on proposals to shape the platform’s development.

Project review

This lending platform‘s ability to leverage ibTKNs creates a unique niche in DeFi 2.0. This innovation allows users to amplify their returns by borrowing MIM against their ibTKNs and deploying those borrowed funds into additional yield-generating opportunities.

However, users should carefully consider the added risks involved. Leverage can magnify profits and losses; even small price swings can trigger collateral liquidation. It’s crucial to properly size your positions and constantly monitor market conditions to avoid these pitfalls.

What is DeFi 2.0?

Decentralized finance (DeFi) is leaping forward with DeFi 2.0. This next generation tackles the growing pains of DeFi 1.0, specifically scalability, compatibility between blockchains, and long-term viability.

DeFi 2.0 achieves this by leveraging advanced technologies like layer 2 solutions and bridges between blockchains. The focus of DeFi 2.0 is on providing secure and efficient financial services like lending, borrowing, trading, and yield farming.

These projects prioritize user experience, security, and interoperability for DeFi applications. This results in benefits such as lower fees, faster transactions, and less network congestion for users.

Balancing risks and rewards

While DeFi 2.0 builds on the foundation of DeFi 1.0, it embraces a higher risk tolerance. This allows for more experimentation and innovation for decentralized applications within the finance space, and projects are more willing to explore new approaches, even if they carry some risk.

This fosters a dynamic environment where groundbreaking ideas can take root and promising DeFi applications emerge – all while staying true to the core principles of decentralization and trustless operation.

In essence, DeFi 2.0 retains the familiar mechanisms of DeFi 1.0 but injects them with innovation, paving the way for a more robust and user-friendly future for decentralized finance.

How DeFi 2.0 improves on DeFi 1.0

DeFi 1.0 Limitation	DeFi 2.0 Solutions
Scalability: Low liquidity in DeFi markets leads to volatile price swings during token swaps.	Explores faster, cheaper blockchains and Layer 2 scaling.
Liquidity: The difficulty of providing sufficient funds for seamless trading causes slippage and price volatility in decentralized exchanges.	It uses Protocol-Controlled Liquidity (PCL) mechanisms where protocols lock their tokens to create deeper liquidity pools.
Centralization: Single oracles or controlled governance models may have centralized elements	Prioritizes DAOs and community governance to distribute power
Security risks: Bugs in smart contracts can result in hacks and loss of funds	Emphasizes audits and multi-signature security to reduce vulnerabilities
Capital inefficiencies: Locked DeFi capital reduces market efficiency.	Introduces innovative solutions like fractionalized lending protocols

Earning with DeFi 2.0

DeFi 2.0 opens doors to potentially lucrative returns on your crypto assets. Here’s a roadmap to navigate these opportunities:

• Staking: Become a network validator by locking your Best DeFi 2.0 tokens in a smart contract. This contributes to network security and earns you rewards.
• Liquidity Provision: Think of yourself as a market maker—supply tokens to decentralized exchanges (DEXs) to create liquidity pools facilitating trading. In return, you collect a portion of the swap fees generated.
• Yield Farming: This strategy involves strategically moving your crypto holdings between DeFi platforms to maximize interest earned. It’s akin to constantly seeking the best savings account rates but on steroids. However, yield farming can be complex and carries higher risks due to its dynamic nature.

The decentralized finance landscape is rife with innovation but also potential pitfalls. Avoid projects that lack a clear path to revenue generation. These can operate similarly to unsustainable Ponzi schemes, where early investors are paid with funds from later entrants.

Focus on DeFi 2.0 projects with real-world utility and a well-defined token economic model. These factors can increase your chances of finding sustainable DeFi 2.0 tokens with long-term earning potential.

DeFi 2.0 vs. GameFi

DeFi 2.0 aims to revolutionize traditional finance. Its tokens aim to improve lending, borrowing, and trading protocols on the blockchain, making them faster, more adaptable, and more efficient. DeFi 2.0 is essentially an upgrade for core financial services on the blockchain.

GameFi, however, takes a different approach. It merges gaming with decentralized finance, creating a “play-to-earn” model. Gamers can earn cryptocurrency through gameplay and by owning digital assets within the game itself. This creates a new kind of in-game economy where players have a stake in the game’s success.

Interestingly, the line between DeFi 2.0 and GameFi isn’t always clear-cut.  Some innovative GameFi projects leverage DeFi 2.0’s infrastructure to create their in-game economies. Here’s how:

• Earning & lending: DeFi 2.0’s lending protocols can be integrated into GameFi, allowing players to earn interest on their crypto earned through gameplay. Imagine storing your in-game tokens and generating passive income!
• NFT utility: DeFi 2.0’s focus on NFTs (non-fungible tokens) perfectly complements GameFi’s reliance on in-game assets. These NFTs, representing unique digital items within the game, can be collateral for loans within DeFi 2.0 protocols.

This synergy between DeFi 2.0 and GameFi creates a dynamic ecosystem where players can enjoy the game and potentially earn a return on their investment and in-game assets.

So, how do you choose? DeFi 2.0 beckons if you’re interested in financial innovation. If the thrill of playing to earn and exploring new gaming experiences is more your style, then GameFi might be the better fit.

Comparison chart: Our best DeFi 2.0 tokens side-by-side

Token	Chain	Supply	Inception
Flockerz	Ethereum	12B	2024
Pepe Unchained	Ethereum L2	8B	2024
Crypto All-Stars	Ethereum	42.069B	2024
FreeDum Fighters	Ethereum and more	270B	2024
Sponge V2	Polygon	150B	2023
SpacePay	Ethereum	34B	2023
ALCX	Ethereum	2.89M	2021
KLIMA	Polygon	8.82M	2021
SPELL	Multichain [Ethereum (ETH), Avalanche (AVAX), Fantom (FTM), Arbitrum]	210M	2021

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FAQs

Are DeFi projects good or bad?

DeFi projects offer mixed results. While high yields seem enticing, they’re often unsustainable due to token inflation, which can erode rewards. Long-term, even moderate returns (5-10% APY) carry risk, and DeFi still feels speculative. However, for those without access to traditional financial tools, DeFi presents a valuable alternative. For others, it’s more of a way to diversify, with high risk for potential rewards. If mass adoption is the goal, DeFi isn’t quite there yet.

What is the market capitalization DeFi?

The decentralized finance (DeFi) cryptocurrency market is currently valued at $90.78 billion and is projected to grow at a compound annual growth rate (CAGR) of 39.5% from 2022 to 2027. In comparison, centralized finance (CeFi) has a market cap of approximately $324 billion, as CoinMarketCap and BCC Research reported.

Is DeFi still profitable?

DeFi can be profitable, but it’s not guaranteed to make money. The profitability of DeFi 2.0 tokens and a surge of the DeFi crypto market cap depend on various factors, including market conditions and individual project success.

References

• Forecast for the number of active virtual reality users worldwide from 2014 to 2018 | Statista
• Global Decentralized Finance (DeFi) Market: Trends, Global Scenario, Innovations & Market | BCC Research
• Understanding Voluntary Carbon Markets | SP Global
• What Is Decentralized Finance (DeFi) and How Does It Work? | Investopedia
• Information and Market Power in DeFi Intermediation | Federal Reserve Bank of New York
• https://www.coinchange.io/blog/defi-research-news-january-2024