Tamil₿TC -தமிழ்பிடீசி

Overview of Decentralized Finance (DeFi)

Since DeFi projects are very much in hype lately, our experts wanted to shed some light on how DeFi products build, how the ecosystem evolves over time and some crypto projects that are using DeFi.

Meaning :-

Cryptocurrency’s promise is to make money and payments universally accessible– to anyone, no matter where they are in the world. The Decentralized Finance (DeFi) takes that promise a step further. DeFi is the movement that leverages decentralized networks to transform old financial products into trustless and transparent protocols that run without intermediaries. If we put it in simple terms, JUST IMAGINE Global, Open alternative to every financial service you use today — savings, loans, trading, insurance and more, which are accessible to anyone in the world with a smartphone and internet connection.

Smart Contract Blockchains (Dapps) :-

DeFi is now possible on smart contract blockchains, like Ethereum. Smart contracts are programs running on the blockchain that can execute automatically when certain conditions are met. These smart contracts enable developers to build far more sophisticated functionality than simply sending and receiving cryptocurrency. These programs are what we now call decentralized apps or dapps. Dapp is an app that is built on decentralized technology, rather than being built and controlled by a single, centralized entity or company. You guys get used to this word, dapp, you’ll be seeing it a lot from here on out.

Real Life uses of Dapps :-

While some of these concepts might sound futuristic but few areas where it is Already operative
i) Automated loans negotiated directly between two strangers in different parts of the world, without a bank in the middle.
ii) DeFi dapps allow you to create stablecoins (USDT, BUSD, PAX, TUSD, USDS)
iii) Lend out money and earn interest on your crypto
iv) Take out a loan, exchange one asset for another
v) Go long or short assets, and
vi) implement automated advanced investment strategies.

How DeFi Apps are different from similar Traditional Banks/Wallstreet apps :-

A. The operations of projects running on DeFi are not managed by an institution and its employees — instead the rules are written in code (or smart contract, as mentioned above). Once the smart contract is deployed to the blockchain, DeFi dapps can run themselves with little to no human intervention

B. The code is transparent on the blockchain for anyone to audit. This builds a different kind of trust with users, because anyone has the opportunity to understand the contract’s functionality or find bugs. All transaction activity is also public for anyone to view. While this may raise privacy questions, transactions are pseudonymous by default, i.e. not tied directly to your real-life identity.

C. Dapps are designed to be global from day one — Whether you’re in USA, France z Germany, Sweden, Canada, you have access to the same DeFi services and networks. Of course, local regulations may apply but, technically speaking, most DeFi apps are available to anyone with an internet connection.

Few Examples of DeFi Projects :-

There have been many DeFi projects listed and most of them are built on ethereum.
Few cryptocurrency projects which are evolving and have started using DeFi :-
ETH, REN, AST, BNT, EDO, LEND, ENJ, Huboi Token, MKR, IDEX, REP, KNC, REQ, FET, ZRX, LOOM, LRC, NXS

Conclusion :-

DeFi is now one of the fastest growing sectors in crypto. Industry observers measure traction with a unique new metric — “ETH locked in DeFi”. Right now, users have deposited over $600 million worth of crypto into these smart contracts.

Intrigued? Look forward and wait for what's coming for you in this era of innovation.

128 views02:10