January 18th, 2022
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.
Engaging Times for SundaeSwap Ecosystem: Fully-functional Beta DEX Set for January 20
By Steve Muchoki January 17th, 2022
In the yield farming segment, the company has set out 500,000 SUNDAE tokens to be distributed daily for the next six months.
Introducing Dendy Metaverse: Hub for Innovative Play-to-Earn Games
By Benjamin Godfrey January 10th, 2022
The Dendy Metaverse is built as a community-driven platform where everyone’s participation will remain a factor in staying united in several ways.
Avoiding Impermanent Loss
By Kseniia Klichova December 29th, 2021
Avoiding temporary loss is crucial to liquidity pools. The greater the liquidity, the less your risk of temporary loss. Liquidity provisioning can help avoid temporary loss in liquidity pools.
DeFi Portfolio Tracker DeBank Closes $25M Equity Round at Valuation of $200M
By Daria Rud December 29th, 2021
Notably, the announcement coincides with the growth of decentralization and DeFi in China. As the authorities are introducing new restrictions on crypto, many Chinese crypto users are moving their crypto holdings to DEXes.
Terra Blockchain’s UST Stablecoin Inks New Milestone of $10B Market Cap
By Benjamin Godfrey December 28th, 2021
Beyond the UST stablecoin, Terra embodies a far greater innovation that has informed its massive coin performance thus far.
Fireblocks (Fb): Gateway for Institutional Players to Embrace DeFi
By Benjamin Godfrey December 14th, 2021
Through Fireblocks, clients gain access to tokenization, smart contracts, DeFi protocols and other emerging capabilities that define the growing world of blockchain technology.
Cook Finance Launches First Ever DeFi Index Platform on Avalanche
By Benjamin Godfrey December 10th, 2021
Alongside the new indexes that Cook Finance launched on Avalanche, a new feature dubbed Issue with Single Token has also been added.
Crypto Launchpad CoinList Announces Plans for pSTAKE Token Sale
By Benjamin Godfrey December 9th, 2021
pSTAKE operates based on a dual token system that notably simplifies the process of staking and earning rewards.
BIS Calls Complete Decentralization in DeFi Illusion, Stresses on Proper Regulations
By Gladis Monteiro December 8th, 2021
The report by BIS explains why the decentralization in DeFi is a myth or illusion and reveals a principal reason for these concerns.
Largest NFT Project in History Has Finally Dropped – Bitcoin NFT
By Benjamin Godfrey November 30th, 2021
Today’s blockchain ecosystem is replete with many projects ranging from Bitcoin, to those focused on Decentralized Finance (DeFi), and to Non-Fungible Token (NFT) projects respectively. These projects seek to advance the core capabilities of blockchain technology as one that can help revamp all aspects of human activities.
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.