Ivan on Tech Academy provides latest insights and reports about the blockchain industry.
One of the many fields of the economy that is ripe for disruption by the blockchain is the finance field. Virtually every part of the finance industry that traditional finance companies operate in is under threat from the blockchain. Over the last few months, the DeFi space market cap has risen dramatically, and this trend is set to continue over the coming years.
First of all, what is DeFi? DeFi stands for decentralized finance and refers to the ecosystem of financial applications built on the blockchain. This can be anything from decentralized exchanges to decentralized lending.
Projects such as Kyber Network (KNC) and 0x (ZRX) enable a decentralized and trustless exchange of tokens. Kyber “is an on-chain liquidity protocol that aggregates liquidity from a wide range of reserves, powering instant and secure token exchange in any decentralized application”. Their protocol can then be integrated into other applications such as websites or cryptocurrency...
Compound Finance rocketed to preeminence recently as the new DeFi darling with its COMP governance token seeing massive gains. This spate of wild speculation has been accompanied not only by more traders piling on but also by funny memes and videos featuring Yield Farmers harvesting their lucrative crops.
If speculation continues at this pace, Compound could be poised to dethrone MakerDAO as the reigning king of DeFi. Maker and Compound are similar in that they both operate in the money market space. Unlike Maker, however, the Compound protocol supports multiple assets and users don’t have to borrow to lock them up.
Yield farming is all the rage right now, but before we get into that let’s take a deeper look at Compound itself.
Compound is a decentralized protocol on the Ethereum blockchain that establishes money markets for the borrowing and lending of assets. These assets are popular cryptocurrencies such as ETH, DAI, and...
Decentralized Finance (DeFi) is all about creating an open-source, permissionless, transparent, financial ecosystem available to anyone with an internet connection.
DeFi offers a set of products and services similar to that of the conventional financial world except they’re built on a blockchain—notably Ethereum (ETH). And one of the most popular and fastest-growing sectors of DeFi is the money markets.
Traditional money markets exist for the borrowing and lending of assets—likewise, for decentralized money markets. However, the assets involved can be cryptocurrencies and it is smart contracts (not middlemen bankers) that dispense the interest payments and enforce the terms of the loan. No middleman means higher returns for the lenders.
Another big difference is that when you participate in DeFi you can make money off interest payments—unlike the current financial system that’s been operating on zero or...
Decentralized Finance, more popularly known as DeFi, is an umbrella term for the next-generation financial applications ecosystem currently emerging. What sets the DeFi field apart from traditional finance applications is that it employs public blockchain technology. This is the same technology underpinning cryptocurrencies, and has become hotter than ever in past years.
DeFi, which is sometimes known as “open finance”, encompasses a broad variety of various subjects. To name a few, these include decentralized exchanges, decentralized stablecoins, decentralized money markets, decentralized synthetics and decentralized insurance.
This can all be a lot to take in. No matter what, it is clear that the most important takeaway is that the various applications in the DeFi field are decentralized. You might have heard about decentralization in relation to blockchain technology or cryptocurrencies - but what does it mean?
Blockchain-driven innovation is heating up. However, Bitcoin is still the elephant in the room when it comes to discussing crypto with the average person. In terms of sheer brand recognition, it always wins hands down. However, there are more interesting things going on right now in the crypto space, and one of them is Decentralized Finance or DeFi.
Not to dismiss Bitcoin or minimize its role in bringing about the blockchain revolution, but let's just say that while Bitcoin's price has been lurching sideways like a dawdling old grandpa (falling off its walker each time it bumps into the $10k resistance barrier), DeFi has been sprinting around the track like Usain Bolt. In fact, some observers are already predicting that DeFi might well be the next big thing in the blockchain field.
Things can change quickly in crypto, but presently, DeFi is performing well as a family of assets and frankly, it's a more exciting space to be in. So, if you're new to crypto or you've only been...