Homework Task 4: Introduction to Decentralized finance (DeFi) - A new Fintech Revolution (Part 1) | by @yohan2on

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Hello, everyone. I welcome you to yet another week filled with crypto knowledge from the seasoned Steemit crypto professors. I've been able to attend the crypto professor @yohan2on lectures and it was a great one about Decentralized Finance (DeFi) and I will be solving the task which requires me to explain a few DeFi DApps; Maker, Compound, Synthetix, bZx and Uniswap.

Before going proper into the context, it is important to understand what DeFi is all about and I will do that just now.

What is Decentralized Finance (DeFi)?

Decentralized finance (DeFi) is a new name in the blockchain sector which simply means the financial sector eliminating the financial intermediaries which are otherwise known as third parties. DeFi creates an avenue on the blockchain whereby users can directly borrow, lend assets or even become a liquidity provider on the network without the involvement of the third parties. With this kind of innovation, the process of smart contracts will be highly reformed.

What is DeFi DApps (Maker, Compound, Synthetic, bZx, Uniswap)?

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Maker: Maker Defi known as MakerDAO is a decentralized credit platform on the Ethereum blockchain which supports Dai (cryptocurrency stablecoin). Remember that stablecoins are cryptocurrencies that have their value pegged to USD due to the market volatility, such that they hardly rise or fall in price. Maker DeFi gives any user to the opportunity to open a Vault, lock in collaterals such as ETH or BAT, and generate Dai as debt against that collateral. Dai ease the burden of ETH transfer cost as it is; fast with low transaction cost, offers borderless transfer, transparent , and its immutability and accountability nature.

Compound: Compound DeFi is a financial lending protocol that serves as a money market allowing users to deposit cryptocurrency assets and earn interest on the assets over time also offer users the chance to borrow crypto assets against them (which requires repayment at a set time). The name compound was deduced from its operating protocol that allows users to deposit and earn, and also offer borrowing assets provided by others on the system. Each assets deposited on the compound DeFi earn its set interest rate which varies from one asset to the other.

Synthetix: Synthetix DeFi is the protocol that gives the opportunity of issuance of synthetic assets on the Ethereum (ETH) blockchain, thereby supporting synthetic assets such as Gold and silver. It also supports synthetic cryptocurrencies, synthetic inverse cryptocurrencies, synthetic fiat currencies and synthetic cryptocurrency indexes. Synthetix brings the non blockchain-based assets into the crypto ecosystem to facilitate a more mutual and versatile financial market. With this, crypto assets can easily be exchanged to other assets thereby creating more flexibility in the crypto ecosystem.

bZx: bZx is one out of the DeFi DApps available at the moment. It's a Ethereum-based DeFi lending protocol that allow users to lend, borrow and perform margin trading without the intervention of third parties. In the time past margin traders borrow funds through the Centralized exchanges (CEXs). bZx has now eased the process of borrowing, lending and margin trading without the involvement of the third parties.

Uniswap: Uniswap decentralized finance is a protocol on the Ethereum blockchain for swapping ERC20 tokens without the need for buyers and sellers to create demand. This comes with the great advantage that users can visit and exchange their ERC20 easily without having need to create buy or sell orders.

Having talked about DeFi DApps above, it is important to talk about the advantages of DeFi generally.

Advantages of DeFi

• Easy accessibility,.such that users can easily use the DeFI DApps requiring no stress once they have an internet connection.

• Full ownership of users assets. Users have full control over their assets on DeFi.

• DeFi gives full transparency eliminating the negative effects of irregular activities.

• Users' assets remain theirs and they can choose to do whatever they want with it at any point in time.

• It brings about innovation such that the process of earning interest on deposited assets is fully automated and users can easily access the protocol to borrow assets for use.

Conclusion

Decentralized finance (DeFi) is still in its early stage of development but it has really been a great innovation that has brought comfort to the crypto ecosystem allowing users to easily exchange and perform lending, borrowing and margin trading at ease. Thanks to the crypto professor @yohan2on for his lecture as it has exposed me to another side of the crypto ecosystem and look forward to learning more subsequently. Thank you all.

Special regards;
Cc: @steemcurator01
Cc: @steemcurator02
Cc: @steemitblog
Cc: @yohan2on

Written by; @fredquantum