The Best DeFi Coins of 2021: A Look Back at Crypto's Greatest Gainers

The crypto market in 2021 was a remarkable phenomenon captured in a single phrase: explosive growth. Bitcoin and Ethereum launched the year riding momentum from 2020’s gains, and both shattered previous records with new all-time highs. What started as an $800 billion sector in January had ballooned to $2.2 trillion by year’s end, according to CoinMarketCap data. Yet the real story wasn’t written by the established giants—it was the lesser-known tokens that transformed 2021 into a year of unprecedented opportunity. Among the best DeFi coins and digital assets that year, a clear pattern emerged: investors were chasing three distinct narratives that would define the entire market cycle.

Metaverse Tokens Led the Charge

When Facebook rebranded to Meta in 2021, it sent a powerful signal to the crypto market. The metaverse became the hottest investment theme, and tokens tied to virtual worlds saw astronomical returns. The Sandbox and Axie Infinity emerged as clear leaders in this category, with SAND and AXS tokens posting gains that seemed almost too remarkable to believe.

The Sandbox’s SAND token achieved a staggering 162-fold increase during 2021, making it one of the best performing DeFi-adjacent assets of the year. What made this metaverse play particularly attractive was the convergence of retail excitement and institutional validation. Luxury brands like Adidas and Under Armour began announcing partnerships with virtual world platforms, signaling that the metaverse might be more than just hype. Axie Infinity followed closely behind, with AXS reaching 16,160% gains as the play-to-earn gaming model exploded.

Axie’s success was particularly notable because it transcended typical crypto speculation. In countries like the Philippines and Venezuela, players were literally earning income through gaming—a compelling use case that suggested crypto gaming could democratize earnings. Decentraland’s MANA token, another metaverse contender, also cracked the year’s best coins list, surging nearly 40-fold as virtual real estate and digital experiences attracted serious investment.

Today, these metaverse tokens tell a cautionary tale: SAND is down 71.88% from its peak, AXS has declined 63.30%, and MANA has dropped 65.36% since those heady days of 2021. The metaverse narrative remains, but the speculative premium has clearly deflated.

Ethereum Killers Became the Real Winners

The second dominant theme of 2021 involved scaling solutions and alternative blockchains. High transaction fees on Ethereum—the infamous “gas fees”—had become a point of genuine frustration for users. This opened the door for competing layer 1 blockchains that promised faster, cheaper transactions while maintaining smart contract functionality.

Polygon emerged as a breakthrough project, with MATIC delivering approximately 14,500% gains as it offered an elegant sidechain solution to Ethereum’s congestion problems. The Polygon ecosystem flourished as developers migrated DeFi protocols, NFT marketplaces, and decentralized applications to escape Ethereum’s high costs. This category became synonymous with “Ethereum killers”—not because they would replace Ethereum, but because they represented genuine competition for developer mindshare and liquidity.

Terra’s LUNA token surpassed Polygon with 13,800% gains, as the layer 1 blockchain position itself as a major DeFi hub. The project’s flagship stablecoin, TerraUSD, reached a $10 billion market capitalization by late 2021, representing genuine adoption of the Terra ecosystem. Solana, Fantom, and Avalanche also made the year’s best coins list, with SOL posting 9,374% gains and FTM reaching 13,007%. Each offered different scaling approaches, yet all benefited from the fundamental thesis: Ethereum users were actively seeking alternatives.

However, these “best DeFi coins” of 2021 have since faced significant headwinds. LUNA collapsed from prominence following the 2022 ecosystem crisis and now trades down 71.76% from its 2021 peaks. SOL declined 38.81%, AVAX fell 57.23%, and FTM saw similar pressures. While these layer 1 blockchains haven’t disappeared, the competition has become far more nuanced, with many recognizing Ethereum’s own scaling solutions have improved dramatically.

Gaming and Play-to-Earn Economics

Perhaps the most culturally significant trend of 2021 involved the emergence of play-to-earn games as a legitimate investment category. Axie Infinity led this charge, but the success inspired an entire ecosystem of gaming tokens that promised to align player incentives with project growth.

Sky Mavis’ Axie Infinity became more than just a game—it became a livelihood for hundreds of thousands globally. The ability to earn real cryptocurrency income while playing attracted investors seeking exposure to gaming tokenomics. This best coins category represented a genuine innovation in how blockchain technology could align economic interests: players earned, developers benefited from platform growth, and investors participated in ecosystem value creation.

The play-to-earn narrative suggested that blockchain gaming could drive mass adoption by offering tangible economic benefits. Retail investors flooded into these tokens, and returns reflected the speculation. Axie Infinity’s early adopters saw returns that dwarfed traditional gaming stocks or venture-backed game studios.

The Meme Coin Phenomenon

Not every successful token in 2021 traced its gains to technological sophistication. Dogecoin and Shiba Inu demonstrated that meme culture and social sentiment could drive remarkable valuations in the crypto market. DOGE reached an all-time high near $0.74 in 2021, buoyed heavily by Elon Musk’s Twitter commentary and growing retail interest.

Dogecoin’s surge peaked in mid-2021 and eventually settled, though the token still finished the year up 2,943% despite coming from pennies. As DOGE momentum faded in the latter half of 2021, Shiba Inu took center stage as the DOGE derivative, finishing the year with 1,608% gains and claiming the final spot in that year’s breakout performers.

The success of DOGE and SHIB inspired dozens of dog-themed tokens, each hoping to replicate the social media magic of their predecessors. While these meme coins demonstrated the power of community and narrative in crypto markets, they also highlighted a fundamental truth: not all innovations require utility.

Five Years Later: Market Maturation and Perspective

Looking back at 2021’s best coins from the vantage point of 2026, the maturation of the cryptocurrency market becomes evident. The tokens that delivered the most spectacular returns have faced significant corrections:

• Bitcoin, which gained 66% in 2021, has since declined 22.96%
• Ethereum, up 418% in 2021, is now down 17.05%
• The metaverse darlings have shed 60-70% from peak valuations
• Most layer 1 competitors have given back 35-70% of their gains

This pattern suggests that 2021 was indeed a speculative peak, but it was also foundational. The infrastructure built during that period—whether in metaverse platforms, alternative blockchains, or gaming tokenomics—continues to evolve. Protocols that once seemed revolutionary now compete in a vastly more sophisticated landscape where differentiation requires genuine utility and adoption rather than narrative alone.

The best DeFi coins of 2021 taught important lessons about market cycles, the power of institutional validation, and the difference between hype-driven gains and sustainable value creation. For investors navigating today’s market, understanding 2021’s winners and their subsequent trajectories offers crucial perspective on what separates lasting innovations from speculative manias.