The decentralized finance applications are also known as DeFi is not new any more to crypto enthusiast but again, is still a new breed of consumer-facing financial applications composed as smart contracts which are been deployed on permissionless blockchain technology.
In actual sense, the perception that banks had misbehaved resulted in a deterioration of trust in the traditional financial sector. The causes of the crisis were several, but arguably chief among them was a lack of transparency regarding the amount of risk major banks were accumulating.
Do you still remember Lehman Brothers filed for bankruptcy? It's an exposure that was compounded by the fact that the bank had a leverage ratio 2 which is defined as total assets/equity (won't dwell more on this) Read more
Decentralized Finance (DeFi) is a peer-to-peer financial paradigm which leverages blockchain-based smart contracts to ensure its integrity and security. This market contains over $16 Billion as its crypto market cap according to CMC with 20.10% decrease over the last day as at the time of writing this article.
2020 has welcomed so many DeFi projects, solid and those that are just in for money and not considering their community members and how to build wealth together through the means of engagement and members activities. In a clear understanding of DeFi, there is no way DeFi will exist without stable coins. If we consider the first cryptocurrency and other altcoins, volatility is the problem and this makes an introduction of a stablecoin important because this is pegged to a fiat currency such as the USD or the Chinese Yuan. Decentralized Finance is known for staking or lending contracts and other financial products in a volatile asset which is impractical and this made most DeFi contracts incorporate stablecoins at the core of their functionality.
Now, you see one of the reasons stablecoins was inaugurated/incorporated in Decentralized Finance like we have Dai, Paxos, USDT, TrueUSD e.t.c. in the market today.
At the time of writing, the total value locked in DeFi contracts is approximately $14.09 Billion according to DeFiPulse and Maker dominance is about 18.41%.
Staking
Lending & Borrowing
Governance & Voting
This is a process of holding a certain amount of coin in your wallet for some time with a mind of receiving a reward. Considering staking is a lucrative way to earn passive income and you can either stake on a crypto exchange like Binance or Wallet like Trust wallet or a project App like MANTRADAO App that have 3 assets you can stake at the moment and according to WhitePaper, DOT, KSM, RING, PCX, ACA, XTZ, TRX, ADA, EOS, and ELA are tokens expected on the MANTRADAO App. $OM is the utility token of MANTRADAO with 88.88% APR on your staked $OM. There are various implementations of staking that commands reward MANTRADAO has introduced via validator nodes activation with project partners.
In this category, just like we have in the traditional finance system, DeFi gives the user advantage of taking a loan via the program or available decentralized staking system without an application's review or even a bank account. When considering borrowing, the borrower does not need to go out and find a lender, the platform will automatically fix that through the smart contract interest rates are calculated algorithmically based on supply and demand. MANTRADAO is developing its proprietary lending algorithm & stablecoin system which is similar to MakerDAO鈥檚, but with cross-chain collateralized assets rather than just Ethereum-based ones. More info on this.
In today's society, the wisdom of the crowd is a valuable asset and this play a major role in the marketing and financial sector not only in voting or election. When you consider a means of having a trustworthy source of opinion in other to make decisions with a community, you will understand the importance of governance in a decentralized financial system. MANTRA DAO believes in the wisdom of the crowd and thereby its called community-governed DeFi platform because they leverage on this wisdom to create a community-governed, transparent, and decentralized ecosystem for web 3.0 built on Parity Substrate for the Polkadot ecosystem, MANTRA DAO gives financial control back to the people to store and grow wealth together. Check out the soft governance
In conclusion, Decentralized finance is open for anyone to take part in. You can start by leverage on the information you have gathered right here, also try to do your research and ask questions from people for guidance.
https://mantradao.com
https://t.me/mantradao
https://t.me/mantradaoafrica
