Crypto Academy Week 4 Homework Post for @yohan2on

Hello steemians

In this post , I am here to submit my Homework task 4 which I have carried out as required by @yohan2on crypto professor.

Homework task: Briefly explain each of the following DeFi apps.

• Maker
• Compound
• Synthetix
• bZx
• Uniswap

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What is Decentralized Finance?

Decentralized finance is a movement that aims to create a new financial system that is open to all and has a unique point. There is no need to rely on middlemen. To achieve this, Defi relies on cryptography, blockchain, smart contracts. Smart contracts are the main block on Decentralized Finances.

All of the Defi projects are built on Ethereum Blockchain. The main reason for this is the Ethereum programming language called Solidity that allows for writing advanced smart contracts , that can contains all the necessary logic for the Defi applications.

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Defi is a term given to financial services which means that no charge has any central authority. Using Decentralized Assets like certain cryptocurrencies that can also be programmed for automated activities , We can build exchanges lending services, insurance companies and other organizations that don't have any owner and aren't control by anyone.

In order to create a Defi system , The first thing we need is an Decentralized infrastructure for programming and running decentralized services. Luckily for us, Ethereum does just that. Ethereum is one of the best platforms for writing decentralized programs.

Besides that Ethereum has the most developed ecosystem across all the smart contract platforms with thousand of developers building new applications every day. And the highest value locked out of all contracts that make up an additional network.

Defi Advantages

• Transparency
• Interoperability
• Decentralization
• Free for all
• Flexible user experience

Defi Risks

• Still in infancy stage
• Use cautiously with small amount of money
• Research carefully
• Some services are only partially centralized

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There are many Defi apps are built in Ethereum Blockchain ; Maker , DAI , Compound , Uniswap , Hydro , bZx , Balance , Airswap , Synthetix , Rin .
Now let's see how it all started.

Maker :

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Maker Dao was founded in 2005. Maker or MKR is a governance utility in recapitalization tokens by Maker Dao. Its main objective is to enable the administration of MakerDao's stable coins to DAI tokens and DAI credit systems.

The holders of MKR have become stakeholders and therefore make decisions in the wider manufacturer ecosystem. Maker Dao uses to maker to balance DAI as price fluctuate. Maker keeps the DAI coin at the same value as the US dollar. So one dia is always equal to One US dollar.

Another thing that makes maker unique in the maker down platform is the emergency shutdown used as a last resort .

How does maker works?

Maker Dao uses maker to balance DAI coin as prices fluctuate to accomplish this. Maker tokens are created and destroyed in response to DAI price fluctuations. When the value of DAI dips , more maker is created and when DAI goes up , less maker is needed. If the Ethereum price falls so quickly , The DAI can't keep up. Maker is created and sold on the market to generate more collateral.

Compound :

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Compound founded by the former economist Robert Leshner, is a Decentralized Finance or Defi protocal. It is built on a system of accessible Smart Contracts built in the Ethereum Blockchain. Compound allows lenders to provide loan and borrowers to take them out.

By locking their crypto assets in the protocol , it's native token COMP enable users to earn interest , transfer and trade their money. COMP tokens are created each time a user deposits their crypto assets into compound protocol. Those users automatically receive the COMP equivalent of the deposited Currency as collateral when making a deposit.

In compound , Interest rates paid and received by borrowers and lenders are determined by the supply and demand of each crypto asset. Interest rates arise with every block mining. The loan can be repaid and the locked property can be withdrawn at any time.

How does Compound works?

Compound is one of the main lending protocols available in Defi. Compound works by creating money markets for particular tokens such as ETH , stable coins like DAI and USDC.

Compound allows you to borrow crypto assets. Your collateral has to stay above the minimum amount when borrowing these assets, otherwise your collateral will be quantified to repay the loan. Once loan get paid back the lock Assets are allowed to be withdrawn at any time . When a user's Crypto Assets get converted into ERC20 tokens form , they are freely tradable and moveable. They also became available for use in other Decentralized Application. This allows the ability to combine protocols and building blocks.

The most significant Defi protocol features compound focuses on giving users more control and better access to their crypto assets while they earn and save .

Synthetix

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Synthetix Network is a token trading platform founded in 2017. it is built on the Ethereum Blockchain. The network has plans to bring the same sort of commodities , currencies , stock , trading and other assets ruled by financial centers. Users of Synthetix are able to use ERC20 tokens to bet on stock , crypto assets , currencies , precious metals and other financial assets. The price of real-world assets such as precious metals are copied over into digital Synthetix assets or synths.

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These synths are tokenized on the Ethereum Blockchain with all the qualities of ERC20 tokens . However holding a real-world assets isn't the same thing as holding a synth. In the Synthetix network, Synthetix US dollars are created by locking up the Synthetix network token is a similar system to that Maker Dao. The Synthetix network uses an infrastructure made up of more than one token generally one or two types . They include previously mentioned synths and the main Synthetix network token itself .

bZx

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bZx founded by Tom bean and Kyle Kistner in August 2017 , is Decentralized Finance or Defi protocol . This protocol is a set of smart contracts Which is built on the Ethereum Blockchain. bZx is not an exchange or broker , This is a protocol which can integrate into any available and upcoming exchanges to provides the Decentralized Margin lending and margin Trading . This is the first Decentralized P2P margin lending and margin Trading protocol .

This protocol focuses on lending and margin trading and is analogous to a different popular Defi product called dYdX. The bZx system has three main tokens ; iTokens, pTokens, and BZRX token.

Uniswap

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Uniswap is a Decentralized crypto exchange based on the Ethereum Blockchain. To be more precise , Uniswap is considered an Automated liquidity protocal. It is a different type of exchange that's completely Decentralized which means that it is not owned and operated by a single entity.

Uniswap comes in because It's trying to solve decentralized exchanges liquidity problems. Uniswap is created by Hayden Adams was inspired to create the protocol by a post made Ethereum founder. Uniswap allows for automated transactions between cryptocurrency tokens on the Ethereum blockchain through smart contracts.

How does Uniswap Works?

Since Uniswap is built on the Ethereum Blockchain. By using smart contracts , It replaces traditional centralized market tools like exchanges listings and limit order books with automated and permissionless.

Generally Uniswap is that which is balancing the value of tokens and swapping them , based on how much people want to sell or buy them. Absolutely and ERC20 token can be listed on Uniswap.

Essentially any ERC token can be launched until there is a liquidity pool available to merchant. Any token can be added to Uniswap by funding it with equivalent value of eth and ERC20 token being traded.

Cc:-
@steemitblog
@steemcurator01
@steemcurator02
@yohan2on

Thank You