Steemit Crypto Academy Season 4 Week 8 - Beginner's Course | DeFi [Beginner]in SteemitCryptoAcademy •

Hello Steemians, I welcome you all to the 8th week of season 4 in Steemit Crypto Academy.

We will be rounding the season on an interesting topic known as DeFi Products.
The crypto market is greatly advancing and filling up the loopholes in our traditional day finance. DeFi is one of the cryptocurrency ecosystem that is evolving rapidly in the crypto market. Through DeFi, financial services can be accessed easily by crypto users, and also users can get to earn annualized interest on the crypto assets they are holding.

Short for decentralized finance, DeFi is an umbrella term for a variety of applications and projects in the public blockchain space geared toward disrupting the traditional finance world. Inspired by blockchain technology, DeFi is referred to as financial applications built on blockchain technologies.

Decentralized finance (DeFi) is a cryptocurrency system that uses decentralized network and protocols to provide financial services to crypto users. DeFi aims to eliminate third-party involvement in accessing financial products. DeFi also provides seamless and permissionless financial services to crypto users making it available for anyone to access financial products like lending, staking, liquidity mining, borrowing easily. DeFi also guarantees the security of assets through the peer-to-peer network and smart contracts registered on the blockchain.

Benefits of DeFi Products to Crypto Users
Transparency:Unlike the traditional financial system where transactions and system operation are not made public, DeFi products offers a transparent system as transactions are made public to users and are also recorded on the blockchain.
Permissionless: DeFi products are made for everyone in the system to access. There's no limit or barriers to any user in the crypto market. This is different from the traditional system where users need to carry out some form of verification before accessing financial services.
Decentralisation: In the traditional financial system, the banks, brokers, and financial institutions serve as intermediaries in transactions. This reduces the speed of the transaction as this transaction needs approval and verification before it can be executed. Similarly, users' funds are secured as they have access to their private keys which gives them enough freedom to take control of their funds.
Low Cost: Just like we have discussed, the elimination of intermediaries helps to increase the speed of transactions and at a reduced cost. All thanks to the blockchain technology and smart contracts utilized by DeFi products to automate transactions.

In this lesson, we will discuss some DeFi products and how they work. Let's get down to it.

Decentralized finance (DeFi) is a cryptocurrency system that uses decentralized network and protocols to provide financial services to crypto users. DeFi aims to eliminate third-party involvement in accessing financial products. DeFi also provides seamless and permissionless financial services to crypto users making it available for anyone to access financial products like lending, staking, liquidity mining, borrowing easily. DeFi also guarantees the security of assets through the peer-to-peer network and smart contracts registered on the blockchain.

The DeFi market is increasingly growing with a market cap of $145 billion and a 24hour trading volume of $9.1 billion across all platforms. Crypto users can take advantage of the opportunity offered in DeFi ecosystem to have a better financial service. This will in turn increase the dominance of cryptocurrency in the financial market and also fasten its adoption.

DeFi products are financial services tools developed to bring about decentralization in the financial industry by eliminating third-party involvement in assessing financial services. The DeFi products gives crypto users room for much flexibility in accessing financial services while providing a high level of security to protect users funds.
Below are some of the benefits offered by DeFi products to users.

Benefits of DeFi Products to Crypto Users
Transparency:Unlike the traditional financial system where transactions and system operation are not made public, DeFi products offers a transparent system as transactions are made public to users and are also recorded on the blockchain.

Permissionless: DeFi products are made for everyone in the system to access. There's no limit or barriers to any user in the crypto market. This is different from the traditional system where users need to carry out some form of verification before accessing financial services.

Decentralisation: In the traditional financial system, the banks, brokers, and financial institutions serve as intermediaries in transactions. This reduces the speed of the transaction as this transaction needs approval and verification before it can be executed. Similarly, users' funds are secured as they have access to their private keys which gives them enough freedom to take control of their funds.
Low Cost: Just like we have discussed, the elimination of intermediaries helps to increase the speed of transactions and at a reduced cost. All thanks to the blockchain technology and smart contracts utilized by DeFi products to automate transactions.

In this section, we will be exploring some DeFi products and also how they work. Let's get down to it.

Decentralised Exchange (DEX)

Decentralization eliminates intermediaries and third-party involvement in the transaction process. This alone does not only increases the transaction speed but also lowers the cost of the transaction. DEXs is a peer-to-peer platform that allows crypto users to exchange their cryptocurrencies while having full control of their funds. Through DEXs, crypto users can have the confidence to exchange and have access to a wide range of cryptocurrencies transactions in a secured manner. Transactions on DEX are recorded on the blockchain and initiated through smart contracts ensuring that users' funds are properly secured and transactions are made transparent to everyone in the system.

How DEX works

Unlike the centralized exchanges that provide order books for its users to match orders, most DEX utilizes the AMM (Automatic Market Maker) to provide liquidity for users to get matching orders. The AMM model uses a mathematical model to help users exchange crypto assets.

When a user initiates a buy order on DEX, this buy order is matched with another user who wants to sell the same crypto asset. This is what we call peer-to-peer transactions where there's the elimination of intermediaries. Assets prices on DEX are determined through the help of the AMM model which also helps to maintain liquidity and allows users to swap their crypto assets at ease.

PanCake Swap

PanCake swap is a decentralized exchange platform that is built on the Binance Smart chain. Pancake swap do not only allow users to swap their crypto assets (BEP-20 tokens) at ease, they also enable them to be liquidity providers to generate passive income from transaction fees. Let's look at how to swap crypto assets on Pancake swap.

In this section, I will be accessing Pancake swap from Trust Wallet. Trust wallet has a DApp function that enables users to have access to most DApps and a user can easily connect their wallet to the platform. The steps are as follows:

Steps:

Open your trust wallet and click on DApps at the bottom page. Pancake swap is a popular DEX platform on trust wallet. Click Pancake swap icon to be redirected to the platform.
On Pancake swap homepage, switch to Trade at the bottom page.
After that, select the crypto assets you wish to swap by clicking on the drop-down arrow. You will see a list of crypto tokens (BEP-20) available. In the case, your preferred crypto token is not on the list, type in the smart contract address of the token in the search bar to add the token on the list.

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Homework must be posted in Steemit Crypto Academy community. Your homework title format should be " [Your Title] - Crypto Academy / S4W8- Homework Post for @blessinglove".
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