DeFi (short for decentralized finance) uses blockchain technology to facilitate financial services without traditional intermediaries like banks. Transactions are executed using smart contracts, which are self-executing contracts with specific and verifiable terms written into the code. Smart contracts allow crypto holders to enter into clear and reliable agreements (also called liquidity pools) to lend, borrow, and trade directly on the blockchain – and earn yield banks normally would.
DeFi yield mainly comes from traders paying fees for transactions (like in trading), interest (from borrowing) or from validating blockchain transactions (called staking). Sometimes, platforms will reward you with their own token as a bonus – just for using their platform. Your total performance will depend on the yield you earn and how the crypto assets you’re using are performing.
We eliminated the most frustrating parts of DeFi investing so you can invest in a DeFi opportunity you like in just a few clicks. You don't have to worry about unpredictable gas fees (fees for blockchain transactions) or moving funds across blockchains when investing on Exponential
Your funds are yours, period. We never repurpose your funds or mix them with company assets. Plus, we’re registered with FinCEN as a money services business in the US, so you can invest with peace of mind. Your assets are held 1:1 in your own isolated wallet, and you can withdraw anytime. Only when you invest your funds, we seggregate all users' investments in cold wallets.
We take a safety-first approach to DeFi. Our platform has multiple layers of security to keep your funds safe and ensure only you can access them. They won’t go anywhere unless you want them to. You can read more about how we keep your funds safe here.
After you place orders to invest, we will group your order with other users' to process them in batches. We do this to save on blockchain fees and so that you can invest without worrying about them. We will trade with our own funds to avoid exposing yours, and we will handle all the complexities of onchain operations like swaps and bridges. Once we have invested in the pool you chose, we will sweep the assets in your wallet and ledger in how many shares of the pool you own.
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Like all investments, investing in DeFi comes with some risk. Our focus is to make assessing the risk of DeFi opportunities as easy as possible. All featured pools have an Exponential Risk Rating – which distills thousands of risk vectors into a simple letter grade from “Lowest risk” to “Very high risk,” so you can evaluate risk at a glance.
Think of yield as a type of dividend you earn, separately from asset return. When you select an opportunity, you are first investing in the crypto assets underlying that investment. Over time, your investment value will change based on two separate components: (1) the change in price of the underlying crypto assets and (2) the yield the investment opportunity generates.
Yields change every day depending on multiple factors like trading volume and value. Since yields are variable, it’s important to keep an eye on them. You get alerts when there’s a major change in yield after investing in a pool with Exponential. We’ve researched the best yields in DeFi, but remember that past performance does not guarantee future returns.
It's simple. We created our own Risk Framework to assess DeFi protocols and assets. Visit our Protocols and Assets directories for in-depth research on your favorite protocols, and assets analyzed by our team of experts. We also curate the list of the top 500 pools in DeFi.