Blockchain and Crypto Blog

Ivan on Tech Academy provides latest insights and reports about the blockchain industry.

decentralized finance defi what is yield farming yield farming

DeFi Deep Dive - What Is Yield Farming?

Written By Ivan on Tech

Aug 11, 2020

Those looking into the DeFi field will likely come across the term "yield farming". Yield Farming is the process of putting crypto tokens to productive use in a decentralized finance (DeFi) market to earn interest. Yield Farming takes place on the Ethereum blockchain, and yes, it is a way to earn passive income on Ethereum. But “hodling” ETH tokens is not the same thing as Yield Farming. 

This kind of farming is a creative process. It is also a managed process where “farmers” typically hop from one protocol to the next to maximize returns. However, farmers can also employ “set it and forget it” strategies. 

Yield Farming became popular with the release of Compound’s COMP governance token. When word got out that farmers could reap Annual Percentage Yields (APY) over 100%, things took off. At present, there is over $4.5 billion Total Value Locked (TVL) in DeFi according to DeFi Pulse

Governance tokens like COMP offer hodlers...

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DeFi Deep Dive - What is Balancer?

Written By Ivan on Tech

Aug 09, 2020

Balancer is an automated market maker (AMM) for multiple tokens. It enables portfolio owners to create Balancer Pools where traders can then trade against these pools. Balancer is still a relatively new liquidity provider (LP) in the decentralized finance (DeFi) space. It only launched in March 2020. 

Exchanges, whether they be centralized (CEX) or decentralized (DEX), exist to fulfill buy and sell orders. Their role is to find matches for a wide variety of orders from buyers and sellers so their orders can be executed. Traders rarely find the perfect match on the other side of a trade, so compromises have to be made. Hence, the need for market makers.

Market Makers

A traditional market maker is an individual or member firm of an exchange that buys and sells securities with the primary goal of profiting on the spread. Investopedia describes it this way: “Many market makers are brokerage houses that provide trading services for investors to keep financial markets...

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DeFi Deep Dive - What are Decentralized Prediction Markets?

Written By Ivan on Tech

Aug 07, 2020

Prediction markets use the “wisdom of the crowd” philosophy to make decisions on future events or outcomes. The events predicted can be extremely diverse, such as - elections, sales of a company, price fluctuations of commodities, etc. In this article, we will talk about DeFi prediction markets. These are prediction markets that use the advent of decentralized finance to drive the prediction systems.

So, first thing’s first…. 

What is Decentralized Finance (DeFi)?

DeFi stands for decentralized finance. It’s a movement that aims to utilize protocols like smart contracts to create decentralized versions of traditional financial products and instruments. A DeFi can be anything from a digital asset, decentralized applications (DApps), financial smart contracts, and protocols that run on top of public blockchains. Some features of these DeFi applications are as follows:

  • Decentralized: There are no intermediaries that take up control of your funds. A...
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DeFi Deep Dive - What is Aave?

Written By Ivan on Tech

Aug 03, 2020

Aave is a decentralized money market protocol that enables users to lend and borrow cryptocurrencies in a trustless manner. There is a wide variety of cryptocurrencies to choose from, and Aave offers both stable and variable interest rates to its users.

We’re looking closer at Aave today because it is quickly establishing itself as a market leader in the lending and borrowing sector of decentralized finance (DeFi). Like other DeFi protocols, there are no lengthy registrations to contend with, nor any KYC (Know Your Customer) or AML (Anti Money Laundering) documents required.   

How Aave Works

To transact on Aave, lenders must deposit funds into liquidity pools, and users can then borrow from these pools. Each pool sets assets aside as reserves to hedge against volatility. These reserves also help ensure that lenders can withdraw their funds when they’re ready to exit the protocol.  

Aave has close to 20 different cryptocurrencies available for...

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DeFi Derivatives: Using Smart Contracts to Positively Disrupt a Multi-Trillion Dollar Market

Written By Ivan on Tech

Aug 01, 2020

Derivatives are one of the most sophisticated and mature instruments in the financial market. One of the most exciting things about DeFi is that it allows developers to recreate traditional financial instruments in a decentralized context. The DeFi derivatives market has garnered a lot of steam.

As per DeFi Pulse, DeFi derivatives applications have >$500 million locked up, with Synthetix being the clear market leader. If properly executed, DeFi derivatives can bring a whole new class of investors and institutions. But before we do so, let’s look into the definition of financial derivatives.

What are derivatives in finance?

In finance, a derivative is a contract that derives its value from an underlying entity's performance. The contract specifies the exact conditions under which two parties can transact with each other. These conditions include:

  • A predetermined time period.
  • The resulting value of the entity and definition of the underlying variables.
  • Contractual...
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decentralized exchange decentralized finance defi dex

DeFi Deep Dive - What is a Decentralized Exchange (DEX)?

Written By Ivan on Tech

Jul 28, 2020

A decentralized exchange, or more commonly a “DEX”, is one of the most fascinating aspects of the DeFi revolution. As you may already know, DeFi, is a movement wherein developers create decentralized alternatives of various traditional legacy financial institutions and products. The DEX is the decentralized version of an exchange, such as a crypto exchange. Before we answer the “what is a decentralized exchange” question, let’s learn about traditional exchanges and its many flaws.

What is a cryptocurrency exchange?

Centralized cryptocurrency exchanges are often the first point of contact that people have with the crypto world. The chances are that if you have cryptocurrency, you must have bought it from one of these exchanges. The exchanges act as a portal between the “real” world and the crypto world. 

Now, don’t get us wrong. While they have plenty of flaws, they certainly have some advantages, as well.

  • They enjoy consistently...
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What is DeFi Pulse? The Ultimate DeFi Pulse Guide

Written By Ivan on Tech

Jul 24, 2020

DeFi Pulse is the world’s leading resource for everything related to DeFi or decentralized finance. We are pretty sure that you are very well-familiar with the term “DeFi” by now. It’s an all-encompassing term for decentralized protocols that deal with a variety of financial services like lending, derivatives, payments, exchange, etc. The lion’s share of these protocols is ETH-based, which is why the rise of DeFi has been a huge Ethereum price growth factor.

With its rise in popularity, the DeFi space has welcomed a barrage of newcomers. This is why websites like DeFi Pulse are so incredibly valuable. Crudely speaking, you can think of DeFi Pulse as the CoinMarketCap of DeFi projects. However, as you will soon find out, it packs quite a punch with the sheer amount of value it gives to its users.

What is DeFi Pulse? An Overview

The moment you enter the website, you will see the following the screen:

Let’s see what all is happening here:

  • First up,...
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DeFi Deep Dive - What is Curve Finance?

Written By Ivan on Tech

Jul 23, 2020

Curve is a decentralized exchange (DEX) designed for efficient stablecoin trading. It is like Uniswap in that it uses liquidity pools, it’s non-custodial, and it rewards its liquidity providers. However, because Curve focuses solely on stablecoins, it costs less to use.

Curve vs. Uniswap

Stablecoins are traded directly against each other on Curve. Furthermore, that is one of the most significant differences between it and Uniswap. If you want to trade between a pair of stablecoins on Uniswap, two trades must occur: 

  1. Stablecoin #1 gets traded for Ethereum (ETH). 
  2. ETH gets traded for Stablecoin #2. 

So, as a trader, you will accrue double trading fees. And while Curve has similar benefits as Uniswap for liquidity providers, it’s not subject to the degree of “impermanent loss.” That’s because Curve only trades between stablecoins, whilst Uniswap trades directly against ETH. And ETH’s volatility can wreak havoc on...

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DeFi Basics - What is Decentralized Finance (DeFi)?

Written By Ivan on Tech

Jul 22, 2020

The finance industry is one of the most important in the world, and many may take it for granted. In fact, some may assume that nearly everyone in the world has a bank account and is connected to a bank. This, however, is a false assumption. In fact, nearly a fourth of the population remains “unbanked” - without access to existing financial infrastructure. According to a recent report from the World Bank Group, approximately 1.7 billion people worldwide still do not have any connection to a bank whatsoever. There is, nevertheless, a light at the end of this tunnel. The solution to this problem? Well, it could well be that of Decentralized Finance, or “DeFi”.  

The fact that one out of four people on the globe still does not have regular access to financial infrastructure is just the most visible manifestation of a larger problem. Specifically, it exposes how customers are essentially at the mercy of financial service providers. Current centralized...

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decentralized finance defi defi innovation innovative defi

Innovative DeFi Projects - What Is DeFi Innovation?

Written By Ivan on Tech

Jul 21, 2020

There is no shortage of innovative DeFi projects in 2020. Far from it, this year appears to be the one where the DeFi sector could be ready for the limelight. However, what DeFi projects are really setting themselves apart - and is it possible to develop socially innovative DeFi solutions? This article explains everything there is to know about decentralized finance and DeFi innovation!

DeFi Innovation

Those keeping an eye on either the field of finance of blockchain technology will have heard about DeFi. DeFi, short for Decentralized Finance, is a technology that promises to change the existing financial ecosystem. If this sounds dramatic, it is because it is.

The recent flurry of DeFi innovation has been a long time coming. Relying mainly on the Ethereum network and blockchain-driven smart contracts, the DeFi ecosystem began growing in the shadow of the Bitcoin boom and cryptocurrency craze. Nevertheless, DeFi innovation never got as much attention as the glitzy world of crypto....

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