Top DeFi Protocols of 2024: A Ranking of Reliability and Returns

The last year was more than just positive for the DeFi sector. Since the last quarter of 2023, the combined TVL of the sector grew by 129% reaching a massive $124 billion by January 2025. Solana and Base are among the top gainers. The latter has been tracked for less than two years and has already reached a solid $3.7 billion in combined TVL thanks, in large part, to the impressive performance of Aerodrome, the biggest DEX on the chain.

Making a top DeFi protocol ranking list can be challenging due to the overperformance of the sector as a whole and the sheer volume of data generated by over 120 chains. We simply cannot track all obscure protocols that may have delivered outstanding results yet did not break into the biggest platforms by TVL.

Total Value Locked (TVL) remains the most important metric when trying to determine the viability and reliability of any given project. With over 5,000 protocols to choose from and a seemingly endless number of pools to invest in, separating the wheat from the chaff is a Herculean task that many investors do not feel taking on.

Decentralized finance performance in 2024

According to various sources, user activity has increased by 291% with the number of unique wallet addresses interacting with protocols within the Ethereum ecosystem growing to an impressive 151 million and the monthly active user count reaching over 20 million by the end of 2024. These statistics are in line with the general increase in TVL and revenues across the ecosystem.

Many users are interested in exploring the yield farming potential of novel investment instruments offered by the sector. When broken down by the biggest protocols in terms of TVL, some platforms immediately stand out.

Here are the top five biggest DeFi protocols in 2024:

1. Lido is a liquid staking platform that had an outstanding year reaching $31 billion in TVL.
2. Aave has been doing quite well and attracted significant funds across 13 chains reaching $22 billion.
3. EigenLayer focused on restaking Ethereum tokens has a massive $14.48 billion TVL.
4. The WBTC bridge protocol allowing for cross-chain interoperability reached $13.5 billion in 2024.
5. Binance Bitcoin is another massive gainer propped by the BTC growth. It has a $7.12 billion TVL.

Other notable performers that deserve a mention are Justlend ($6 billion), Pendle ($5.3 billion), and Uniswap ($5.8 billion). Note that high TVL does not mean that these protocols were among the best in terms of generating returns for users. However, the increase in total value locked always indicates a growing level of trust from capital holders.

As usual, among the biggest protocols are the ones that symbolize the blockchain investment reliability. Direct liquid staking on Ethereum’s mainnet, lending protocols that demand overcollateralization of loans, and Bitcoin-centric platforms dominate the DeFi sector. However, other options are also worthy of exploring and experimenting with.

Obscure outliers in the DeFi ecosystem

In 2024, some platforms managed to deliver unexpected surges of higher-than-expected performance. While we cannot testify in favor of these protocols when it comes to security and trustworthiness, many of them deserve a mention and a visit for an aspiring crypto investor. 

Here are underappreciated DeFi protocols that performed well last year:

• fx Protocol (FXN) is a platform capable of splitting an ETH token into a floating stablecoin fETH and a leveraged xETH. It can utilize mainnet coins directly or stETH liquid tokens from Lido Finance. As of the time of writing, fx Protocol has a solid $74 million TVL and operates 28 pools averaging 17.6% APY.
• TLX Finance peaked in the summer of 2024 by reaching over $13 million in TVL and performing quite well collecting up to $60K in daily revenues. It is a protocol for derivative trading that experienced a massive user influx two months after launching. It is still active and provides interesting earning mechanics.
• Parasail is one of the most intriguing DePIN protocols that works with a variety of networks and emphasizes the importance of community-driven development. In 2024, it reached a massive $107 million TVL but has since lost a significant chunk of it and hovers above $60 million which is still great.

Note that these protocols were outliers in the DeFi sector in 2024 and managed to attract users at the launch. We do not have enough data to analyze their long-term potential and even understand the quality of investment outcomes for users who decided to engage with them. If you are interested in exploring them, make sure to do your own research.

The best investment return strategies

Some of the protocols made it possible for users to earn solid returns by prioritizing yield farming approaches that rewarded them with different native tokens. Some chains overperformed on average. For example, one of the best strategies of 2024 was investing in the Base Yield Index at Rivo to earn a 19.2% weekly APY.

Here are the top performers among DeFi protocols in 2024:

• Lido was the best choice for conservative investors interested in safer options and flexibility. While the APY in the stETH pool was lower than direct staking, the opportunity to receive staked tokens and use them to take out a loan or invest in fx Protocol was a significant enough incentive to increase the TVL by roughly 76% throughout the year.
• Aerodrome is certainly among the best DeFi protocols for proactive investors hunting for better yields at a moderate risk level. As of the time of writing, Aerodrome has a solid TVL of $1.19 billion and operates 330 pools averaging 100.5% APY. The sector-wide governance token analysis shows that AERO is one of the best assets out there.
• Pendle is a multi-chain yield protocol that has a massive $5.3 billion TVL, offers 120 pools with an average APY of 15.62%, and has one of the best TVL dynamics in the sector as it skyrocketed to over $6.6 billion in just several months after gaining some recognition at the beginning of 2024. Pendle offers pools with limited maturation focused on sUSDe, USDe, BTC, and stETH tokens.

It is quite hard to conduct proper crypto protocol analysis during the strong bull run that we experienced at the end of 2024 with BTC breaking through the $100K price barrier. However, some protocols have performed in line with the overall positive trend while amassing solid TVLs and gaining trust from investors all over the world.

Some challenges remain unsolved even after a breakthrough year for the DeFi sector. Over 65% of surveyed capital holders say that difficult onboarding is still the biggest hurdle as many newcomers poorly understand liquidity pool mechanisms and other popular investment instruments. Nevertheless, complex protocols like Pendle, fx Protocol, Lido, and others managed to attract many users and showed excellent performances.