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Hello everyone, here is my homework for week 4, and I will discuss about decentralized finance from my own perspective before entering the course outline. Let's get started..
<center><h1>DeFi!</h1></center>
Decentralized finance (DeFi) is one of the most talked about trends in the cryptocurrency world today. For those of us who are new to this trend, the only question is what is Decentralized Finance (DeFi)?
Decentralized finance or (DeFi) is not a very complicated subject. The matter is very simple. I understand from the post of Professor @yohan2on, he explained in very simple language in his post. Simply, decentralized finance (DeFi) is financial system that operate independently, It does not rely on financial intermediaries like any bank, insurance.
I will briefly discuss each of the DeFi apps below.
- Maker
- Compound
- Synthetix
- bZx
- Uniswap
<center><h1>Maker</h1></center>
Dai is a stable decentralized currency built on the Ethereum blockchain (ERC20 token). Aims of this project to keep its value as close USD. It's mean 1 Dai=1$, created by Maker(MKR), founded by Rune Christensen, and present CEO.
Stable coin is a cryptocurrency that is less volatile and pegged than any other cryptocurrency on the market. And Dai is one of them.
Since Dai is a simple Etherium token, anyone can use and build without permission. Also as an ERC20 builds the Dai function block as a token that is Incorporated as a stable assets for decentralized applications.
<center><h1> Compound </h1></center>
Another DeFi lending protocol is Compound Finance. It is also a protocol built on Ethereum decentralized blockchain-based that allows users to use lend and borrow crypto. Its an open source lending platform. Its like a saving account, that put money into it and earn interest on that money.
Users can earn a certain amount of interest by depositing cryptocurrency or digital assets. It uses a smart contract that automates storage and capital management.
One thing you should keep in mind that, when a user looked his/her assets are directly converted into ERC20 form, and then can free to trade, move and useable in the other decentralized application.
<center><h1> Synthetix </h1></center>
Synthetix is ββanother decentralized finance platform top of on Ethereum blockchain. Its a Token trading platform also It allows user to bet on cryptocurrency assets and other assets of ERC20 toekns.
Synths are on Ethereum , you can deposit them on other DeFi platforms and earn interest by providing liquidity from there.
One thing you should keep in mind,When you create a new Synthe, you must use 800% Synths in the SNX token when betting.
<center><h1> bZx </h1></center>
The bZx is a protocol based on top of Ethereum Blockchain. Its a lending protocol where user can borrow, lend and margin trade without relying on any other third parties service.
In the past, margin traders used centralized exchanges (CEXs) to margin trade , where they had to rely on third parties, while decentralized exchanges(DEXs) did not have to rely on any third party. Traders can trade margins from DeFi projects like bZx.
Since this protocol is built on top of Ethereum so it's a sort of like for Ethereum.
Behind of this project Tom Bean and Kyle kistner are the co-founder of bZx protocol. This great idea came to their mind in 2016 and its white paper was released in February 2016. December of 2018 they raised 8 Million in ICO, June 2019 Fulcrum, And October 2019 they launched Torque.
<center><h1> Uniswap </h1></center>
Uniswap is one of the most popular decentralized exchange platforms run on the Ethereum blockchain.
Centralized exchanges occupied a large area such as, Binance, coinbase. These platform are run by single authority. And Uniswap is completely different exchange platform that fully decentralized its mean there is no authority that they can access your funds. Uniswap is a type of trading platform called automated liquidity protocol. And also its a open source DEXs that any one can build another Decentralized exchanges like Uniswap, anyone can copy the system and create tjeir own DEXs.
There is no order book in Uniswap, you don't have to order like Centralized Exchange platform to do any crypto exchange. It is an automated liquidity pool exchange.
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There was a lot to learn in this lesson. Thanks @yohan2on for bringing such an important lesson. Waiting for the next task.
Cc :
@yohan2on
@steemcurator01
@steemcurator02
@steemitblog