What is DeFi?
DeFi is the acronym for Decentralized Finance or the offer of a series of financial services, which by exploiting the potential of platforms and protocols that allow the automatic execution of smart contracts (Erc-20 or BEP20), eliminate financial intermediaries such as centralized exchanges and thus offering the possibility to the individual user to be able to earn using their crypto.
Among the most popular decentralized finance projects we find:
DEX: decentralized exchanges that allow users to trade currencies with other currencies without intermediaries and almost anonymously (KYC processes are not necessary).
stablecoin: through these decentralized applications a user or a company can generate a new stable cryptocurrency linked to another asset, DAI using ETH or USDT using the dollar $ are two examples.
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Lending platforms:** These platforms use smart contracts to replace intermediaries such as banks and on which cryptocurrencies can be lent or borrowed
Wrapped Tokens: these are cryptocurrency tokens anchored to the value of another cryptocurrency. It is called a wrapped token because the original asset is placed in an envelope, a kind of digital vault that allows you to create the wrapped version on another blockchain.
Currently, through decentralized finance, we can create virtually and easily wrapped tokens on any asset.
The first and famous wrapped token is the famous WBTC
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Yield farming:** platforms, about which I wrote about in a previous article (What is yeld farming), that allow traders who are aware and willing to take the risk of earning higher returns from their cryptocurrencies.
The most important platform defi are: Uniswap - MakerDao - Synthetix - Aave
For more information on the defi platforms visit: Defipluse - Defistation - Dappradar
Disclaimer: This article reflects its author’s opinion only and is not financial advice!
