What is Decentralized Finance (DeFi)?

  • Stablecoins. A building block of decentralized finance. Unlike cryptocurrencies such as Bitcoin or Ethereum that are known for their price volatility, a stablecoin is engineered to remain “stable” at exactly 1.00 units of fiat. Most stablecoins are pegged to the USD, but some are in other fiat currencies like the Chinese RMB.
  • Decentralized lending. Programmatically take out a loan on the blockchain. No bank account is required.
  • Decentralized exchanges. Buy and sell cryptocurrencies through a blockchain, rather than a centralized exchange like Coinbase. In principle, a machine can trade on it!
  • Collateralization. Provide digital assets to collateralize your decentralized loans, providing the lender some recourse in the event of default.
  • Decentralized Identity. Identities are used in the context of smart contracts for things like assessing your creditworthiness for a decentralized loan.
  • Composability. Snapping together DeFi functions that make different things, much like software libraries. For example, if a contract takes in crypto and generates interest, the second contract could automatically reinvest that interest.
  • Risk management. High returns in DeFi are often accompanied by even higher risks. Fortunately, new tools are arising to help to hedge these risks.

--

--

--

The most convenient platform to trade, store, invest and manage your crypto assets.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Tatum now supports transaction fee estimation

AlchemySmartLab launches its first cryptoasset on the Waves Platform… A fixed interest paying…

PayRue DEX Wallet

Magik Finance partners with Liquid Capital

Roadmap to Mars

STC Token fork! Check the details

Blockchain🔗 current and future evolution

Here’s My Impressions on the S-Wallet Ambassador Program’s First Phase

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
TBCC

TBCC

The most convenient platform to trade, store, invest and manage your crypto assets.

More from Medium

CTENA Finance DAO built on xDAO.app and Snapshot.io

Liquidity — Queen of DeFi

Announcing two initiatives to thank the entire community!

The Backing Per HADE | Hades DAO