Skip to main content

WHAT IS DEFI AND WHY DOES IT MATTER?

 



Things have been changing rapidly in the crypto space and DeFi happens to be an ongoing trend and it's quite an interesting space to be.


DeFi is the short form for decentralized finance and it was designed as a financial system that is accessible to everyone and reduces the need to hope and count on a central authority like banks and brokerages.


It is dependent on no single entity and utilizes smart contracts on Blockchain (a public database where thousands of computers all over the world verifies transactions).


Now, I know you are wondering what exactly are smart contracts?


Smart contracts are simply self executing codes stored on the blockchain.


For example, let's say you want to send money to a friend tomorrow, only if the temperature gets to 30°C, such orders can be put down in a smart contract.


Let's continue…


Decentralized finance stores all transactions on the blockchain and this reduces the risk of hackers focusing on banks to steal your funds.


Below are the following functions that DeFi performs:


1.Decentralized Exchanges (DEX): This permits its end users to trade and swap their digital assets without trusting any middleman or custodian. Examples of DEX are; Pancake swap, Bakery swap, Uniswap and so forth.


2. Lending and Borrowing Platforms: They offer people lending chances to obtain yearly returns. They also permit individuals to borrow funds at a definite interest rate. It utilizes smart contracts to stand in the place of intermediaries. Examples of such platforms are Aave, InstaDApp, and others.


3. Management of Asset: It plans to make investing swift, affordable and more even. It makes control of funds more clearer and investment opportunities accessible to everyone, regardless of your location. An example is Ampleforth.


4. Yield Farming: This is a golden opportunity for experienced traders to look for prospective defi tokens that have the capacity to generate bigger returns.


5. Prediction Markets: It brings opportunity for individuals to bet on the end results of future incidents such as sports, elections, prices of stock and more. An example is Augur.


Note that DeFi is novel and experimental and isn't without issues but blockchain developers look forward to working on it.

Comments

Popular posts from this blog

  Pick a niche The Blockchain and Crypto space is large and full of opportunities. Most people limit the industry to just a place to trade and make quick cash little do they know that you can actually build a career and achieve much more. There's a lot of skills required in blockchain technology. Firstly, you can become a trader, a day time trader or night trade it all depends on your schedule. You can actually make 10 to 20% of your capital daily or even more depending on the volume of your capital and trading strategy. you can become an investor who spots good coins and invests in a project you believe will do well, you can hodl, meaning you can buy and hold for short or long term period.  OTC trading is actually underrated, you can become an over the counter trader by just buying and selling cryptocurrency through the P2P Platforms or escrow groups, there's a lot of money to be made here if you move volumes on a daily. You can become an expert in technical analysis and give
WHAT YOU NEED TO KNOW ABOUT  NON FUNGIBLE TOKENS NFTs (or "non-fungible tokens") are a kind of digital asset with a unique kind of token-unlike other assets like bitcoin and dollar bills which have a particular and fixed amount that is accepted by all, NTFS have a unique price for every token. Every NFT is Unique, they can be used to authenticate ownership of digital assets like musical records, artwork, virtual real estates and pets. NFTs could be likened to a kind of certificate of authenticity for digital artefacts. They're are actually been used to sell a huge range of collectables currently including: *A tweet by Dallas Mavericks owner and entrepreneur Mark Cuban. *Video art by Grimes *The Original "Nyan cat" meme *Virtual real Estate in a place called Decentraland  and others...   As other digital assets like Bitcoin and other cryptos has grown in popularity over the years, NFTs have also soared — growing to an estimated $338 million in 2020. Each NFT is s
FUTURES TRADING MADE EASY! Do you want to become an expert in Futures trading? or you want to know how to take advantage of the market in futures trading? Here's an opportunity you wouldn't want to miss to build your portfolio and make money trading the futures market. Don't miss this opportunity to improve and build on your knowledge. Join SYDA and our team of experts as they take you on this journey. Register with the link below. Join this 1-day Futures Trading Class that will expose some of the trading tips you need to know. Meeting Link: https://t.co/6xo9BTD0LV Tweet Link: https://twitter.com/syrex_academy/status/1380121037669609475?s=20