Ganibade
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Decentralized Finance, or "DeFi" for short, has swept the blockchain and cryptocurrency industries. But its recent resurgence conceals its roots in the 2017 bubble era. Few businesses recognized the potential of blockchain beyond a brief increase in price while everyone and their dog was conducting a "Initial Coin Offering," or ICO. These pioneers imagined a world in which all financial applications, including banking, trading, savings, and insurance, could be carried out directly on the blockchain without the need for any middlemen.
Imagine having access to a savings account that pays out 10% annually in USD, but without a bank and virtually no risk to your money, to get an idea of the potential of this revolution.Imagine being able to exchange crop insurance with a farmer in Ghana while working from your Tokyo office. Imagine having the ability to act as a marketmaker and earning percentage-based fees that every Citadel would desire. Does it seem too good to be true? It's not. The time has come for this future.
the pillars of DeFi
You should be aware of the following DeFi fundamentals before continuing:
automated market making, or the trustless exchange of one asset for another without a middleman or clearinghouse.
Being able to "put your assets to use" for traders, speculators, and long-term holders, or overcollateralized lending
Stablecoins or algorithmic assets that, without being centralized or supported by physical assets, track the price of an underlying.
Understanding the Production of DeFi
Because they resemble conventional fiat currencies like the USD, stablecoins are frequently used in DeFi. Given how unstable things are and how the history of crypto illustrates this, this is a significant development. Even during severe bear markets, that is, even when the price of cryptocurrencies is collapsing like the bear market of 2018–2020, stablecoins like DAI are built to track the value of USD with small deviations.
A fascinating advancement that is frequently built on top of stablecoins is lending protocols. Imagine being able to borrow money using stablecoins and locking up assets worth $1,000,000 to do so. When your collateral is no longer sufficient, the protocol will automatically sell your possessions if you don't pay back the loan.
Imagine having access to a savings account that pays out 10% annually in USD, but without a bank and virtually no risk to your money, to get an idea of the potential of this revolution.Imagine being able to exchange crop insurance with a farmer in Ghana while working from your Tokyo office. Imagine having the ability to act as a marketmaker and earning percentage-based fees that every Citadel would desire. Does it seem too good to be true? It's not. The time has come for this future.
the pillars of DeFi
You should be aware of the following DeFi fundamentals before continuing:
automated market making, or the trustless exchange of one asset for another without a middleman or clearinghouse.
Being able to "put your assets to use" for traders, speculators, and long-term holders, or overcollateralized lending
Stablecoins or algorithmic assets that, without being centralized or supported by physical assets, track the price of an underlying.
Understanding the Production of DeFi
Because they resemble conventional fiat currencies like the USD, stablecoins are frequently used in DeFi. Given how unstable things are and how the history of crypto illustrates this, this is a significant development. Even during severe bear markets, that is, even when the price of cryptocurrencies is collapsing like the bear market of 2018–2020, stablecoins like DAI are built to track the value of USD with small deviations.
A fascinating advancement that is frequently built on top of stablecoins is lending protocols. Imagine being able to borrow money using stablecoins and locking up assets worth $1,000,000 to do so. When your collateral is no longer sufficient, the protocol will automatically sell your possessions if you don't pay back the loan.
