November 29th, 2023
Decentralized Finance (DeFi)
Check the latest news about Decentralized Finance (DeFi) – feel the pulse of the major innovations, stay up to date on the industry’s key players, and explore expert technology insights.
Infura Network Partners with Microsoft and Other Top Tech Firms to Create Decentralized Web3 Infrastructure
By Mayowa Adebajo
November 16th, 2023
Andrew Breslin clarified that the idea was more about the numbers than the big-name firms that it appears Infura had targetted.
Chainlink Announces v0.2 LINK Staking
By Mayowa Adebajo
November 10th, 2023
By deploying the LINK staking v0.2, Chainlink shows its commitment to blockchain initiatives that drive user engagement.
Bumper’s $20M Bid to Undercut Deribit Crypto Options Goes Live on September 7, 2023
By Chainwire
September 7th, 2023
Bumper, a decentralised finance (DeFi) protocol, today launched its crypto options killer.
Binance Labs Supports Curve Finance with $5M Investment to Aid Recovery from Recent Hack
By Chimamanda U. Martha
August 11th, 2023
The injection of $5 million from Binance Labs transcends a simple financial transaction; it represents a collaborative effort focused on strengthening Curve’s security infrastructure and aiding the protocol in recovering its stability.
Cypher Protocol Halts Smart Contract Following $1M Exploit
By Benjamin Godfrey
August 8th, 2023
Following the attack, the Cypher Protocol team highlighted that an internal investigation had been launched to determine the root cause of the exploit.
Curve Finance Offers Generous Bug Bounty to Expose Its Exploiter
By Benjamin Godfrey
August 7th, 2023
Curve Finance fell victim to a reentrancy bug exploit in late July. The incident not only rattled the DeFi community but also exposed the platform to significant risks.
Ethereum Celebrates 8th Anniversary with Impressive Feat
By Chimamanda U. Martha
July 31st, 2023
Ethereum has achieved a significant feat of $400 billion in secured value, generating annualized profits of $3.6 billion and a total of 17.8 million blocks of digital assets.
CoinMarketCap Releases Its H1 2023 Report on Crypto Market
By Benjamin Godfrey
July 19th, 2023
According to the CoinMarketCap report, the global crypto market demonstrated continued growth in the second quarter of the year, with the total market capitalization reaching $1.17 trillion.
Sturdy Finance Hit in Fresh Exploit, Loses Over $800,000
By Mayowa Adebajo
June 12th, 2023
DeFi hacks have gone through the roof in recent times and many will argue that the DeFi ecosystem has proven time and again that it is indeed an exploiter’s paradise.
Jimbos Protocol Suffers $7.5M Loss in New Hack as Token Plummets 26%
By Mayowa Adebajo
May 29th, 2023
The incident comes barely three days after Jimbos Protocol launched its version 2.
DeFi is a short way of writing Decentralized Finance. Generally, DeFi encompasses cryptocurrencies and financial smart contracts, protocols, and decentralized applications (dApps) that are built on the Ethereum blockchain. To break it down further, DeFi is simply a blockchain-based financial software that can be joined together piece by piece like Legos.
The Key Components of DeFi
The key components of DeFi include digital assets, smart contracts, protocols, and decentralized applications. A good example of DeFi is Bitcoin and stablecoins, the likes of Paxos Standard, USDT, and Dai. DeFi applications do not need arbitrators or intermediaries to be functional. At all times, every user has total control over their funds, and the code is used to specify the resolution of any dispute that might arise.
What are Some Common Functionalities of DeFi?
DeFi currently has three main functions and they are:
- For creating monetary banking services. An example of this is the issuance of stablecoins.
- For providing platforms that can be used for peer-to-peer borrowing or pooled lending.
- For making advanced financial instruments a reality such as prediction markets, tokenization platforms, DEX, and derivatives.
Decentralized Exchanges vs. Decentralized Applications
A decentralized exchange (DEX) is a cryptocurrency exchange whose mode of operation is decentralized in nature. Meaning that no central authority has the final say over its working. At Decentralized exchanges, peer-to-peer cryptocurrency trading is allowed. Like the decentralized exchanges, Decentralized applications (dApps) aren’t under the control of any single authority. They are digital applications or programs that operate on a blockchain or peer-to-peer computer network, rather than a single computer.
Popular DeFi Apps
Some popular DeFi apps include the following:
- Chainlink is a decentralized network protocol that enables the transfer of data through smart contracts between blockchain sources. To carry out this process via an oracle, the network uses its LINK token as a means of payment. Chainlink is also used to power the growth of DeFi applications.
- Uniswap is a decentralized finance (DeFi) protocol on the Ethereum blockchain that enables swapping of ETH and other ERC20 tokens. UNI is Uniswap’s network governance token and is used to fuel the system operations.
- Balancer is a decentralized finance protocol that serves as an automated maker for the market that lowers the cost difference between two or more ERC 20 tokens on the Ethereum blockchain network. BAL is the Balancer’s official token used as a means of payment on the network.
- 0x is a decentralized protocol built on the Ethereum blockchain network to enable peer to peer exchange of ERC20 tokens. 0x is also referred to as decentralized exchange (DEX). Its token, ZRX, is used to pay for services on the protocol.
So What’s Next for the DeFi?
The future holds a lot in store for DeFi. The financial industry is fast moving towards a future of digital money. Hence, the need to explore DeFi the more. As at the time of writing, the market worth of Decentralized finance is over $4 billion. For many companies, the Ethereum blockchain has become the favorite go-to for their financial products. These companies make use of the Ethereum blockchain to build every one of their financial-related products. As time passes, the world can expect more DeFi products.
Click to see more
FAQ on Decentralized Finance (DeFi)
Why is DeFi the hottest topic in cryptocurrencies in 2020?
Remember the promise of cryptocurrency to make money and payments accessible to everyone, regardless of where they are located? Well, Decentralized Finance (DeFi) is taking that a step further. DeFi was initiated to bring about a global, open alternative to the financial services of today. This includes services like insurance, loans, trading, savings, and a host of others. Because of DeFi, they will become more accessible to anyone who has a smartphone and an Internet connection, no matter their geographical location in the world.
What are dApps (Decentralized Applications)?
DApps are applications built on the most popular programmable blockchain in the world, Ethereum. These Ethereum-based applications can create, store, and manage cryptocurrencies on the blockchain. Also known as smart contracts, DApps are agreements or contracts that are enforced by the Ethereum blockchain. These agreements are irreversible and you can create such complex contracts without needing a middle man. A good example is Ocean Protocol, a project built to bridge the gap between data providers and organizations that need data to make the world a better place.
What is the relation between DeFi and blockchain?
Enter the answer in DeFi and blockchain are interwoven. DeFi cannot exist without blockchain. Decentralized Finance is built upon blockchain networks. This ecosystem of financial applications allows users to have complete control over their assets. Users can interact with the ecosystem using peer-to-peer decentralized applications (DApps).
What is the relationship between DeFi and Staking?
Staking is not just one aspect of the DeFi ecosystem that is growing very rapidly, it is also among the latest trending topics in the crypto industry. Staking is exclusive to the crypto community and has to do with crypto owners locking their assets to receive rewards. This debt mechanism depends on DeFi to excel. Similar to conventional banks, DeFi makes it possible for people to borrow by using their crypto assets as collateral.
Who is Investing in DeFi?
Just about anyone can invest in DeFi and for different reasons. Using the blockchain technology, DeFi will allow you to enjoy all the regular financial services, only this time no third party is involved. DeFi technology makes possible the creation of smart contracts with codes that facilitate managing and accepting deposits, liquidating collateral assets, handling collateralized loans and so much more under the contract terms should there be a fluctuation in their values.