The Steemit Crypto Academy Week 7: Introduction to Defi and Yield Farming

in SteemitCryptoAcademy6 months ago (edited)

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Course Outline

  • Introduction

  • Introduction to Defi

  • History of Defi.
  • Decentralized Finance (Defi) vs Centralised Finance (Cefi)
  • DeFi Ecosystem
  • Yeild farming and Defi

  • Yeild Farming Protocols/Platform
  • Identifying A Legit Defi Protocol/Project

  • Conclusion

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Introduction

Learning is a continuous process and with Steemit crypto academy, learning about the blockchain and cryptocurrency is never-ending. Welcome to the seventh (7th) class of the Steemit Crypto Academy and I remain your distinguished crypto academy professor for the class, @gbenga.

Decentralize Finance (Defi) is relatively new in the world of finance, but its acceptance over the period of time from when it was introduced has been very impressive. In this course, I will explain be explaining what you need to know about the world of Defi.

Introduction to Defi

You must have heard of Defi, from a friend, colleague, family member, online search, or from Youtube videos and you might have been interested in knowing what Defi means. Decentralized Finance (Defi) refers to the use of decentralized networks such as open-source applications, and protocols built on Smart Contracts of blockchains to create a decentralized financial service or product which is often transparent and built on a permissionless blockchain.

A lot of people including myself believe that Defi will be replacing the traditional financial system which requires intermediaries. Talking about the traditional financial system, I was at a commercial bank on Friday (19th of March 2021). The aim of going to the bank was to withdraw funds and I got to the bank at 11:17 AM. When I got to the bank, I had to do KYC again, and while trying to do all this KYC and BVN verification requirement, I realized I had spent 4 hours in the bank. I finally left the bank at 4:00 PM and I was exhausted after walking around at the bank. I thought about the entire stress and I knew our banking system needs to adopt decentralization. Imagine a world where our finance can be completely transparent, fair, efficient, and controlled by no central entity. A world where all you need to do is use a blockchain financial product to attend to your financial activities.

History of Defi

It is no lie that Bitcoin is synonymous with Defi following that it was the first decentralized financial method of decentralized payment that didn't require a middle man to perform transactions but before Bitcoin, the idea of Defi existed even though it wasn't a reality at that time. The idea of Defi is dated as far back as 1995 by Nick Szabo 1.

The basic idea of smart contracts is that many types of contractual clauses (such as liens, sureties, delimitation of property rights, etc.) can be incorporated into the hardware and software with which we deal. In such a way that the breach of contract is expensive (if desired, sometimes prohibitive) for the offender. - Nick Szabo

[Smart Contracts: Building Blocks for Digital Markets - 1996]

Although Bitcoin would be regarded as the first Defi coin, it wasn't until Ethereum came in 2014 with Smart Contract, that it became a reality. In 2018, several projects started to get involved in Defi making it popular.

Decentralized Finance (Defi) vs Centralised Finance (Cefi)

When we talk about Cefi, we talk about our regular financial system. The traditional bank, insurance firm, and stock exchange market are examples of Centralised finance, in fact, a lot of exchanges in the cryptocurrency space such as Binance Poloniex, Huobi and so on are an example of centralized finance. With Cefi, every transaction done is handled by a middleman.

Currently, in cryptocurrency, Cefi still has a lot of prominences compared to Defi as most of the exchange companies are centralized, so many projects are centralized, and so on. Centralized finance follow government regulations so as to stay functional and be able to perform their activities 2

Centralized FinanceDecentralized Finance
Personal Information (KYC) requiredNo KYC required
Centralized mode of GovernanceDecentralized mode of Governance
Existing for long but lack full trustTrustless

DeFi Ecosystem

Just like the centralized Finance system has an ecosystem of different projects from different sectors, so does Decentralized Finance (Defi) has its ecosystem making it easy for anyone to access Decentralized form of financial services. The Defi Ecosystem and platforms in the ecosystem include;

  • Wallet and Asset Management: Tokeny Solutions, Bitpie Wallet, Cobo Wallet, Enjin, Coinbase Wallet, etc.

  • Lending: AAVE, BlockFi, Compound, Celsius, NEXO, SALT, e.t.c

  • Decentralized Exchange and Marketplace: Binance Dex, Poloni Dex, Uniswap, Curve, etc.

  • Payment: Moon pay, Matic Network, Request, Connext

  • Tokenization: Securitize, Tokensoft, Vertalo, CodeFi, etc.

  • Identity: Civic, Blockpass, Bloom, etc.

  • Stable coin: USD Coin, DAI, Gemini Dollar, Binance USD, etc.

Yeild farming and Defi

Defi brought about so much innovative creativity in the cryptocurrency world and one of them is Yield farming/Yield Agriculture. With this, investors can earn more crypto with their crypto invested or used to farm. With yield farming, the major goal is to lock up a token so as to provide liquidity in the liquidity pool. We could trace yield farming to 2017 by Maker DAO and it has since been making waves 3.

Yield farming is similar to staking on the automated market maker (AMM) but with yield farming, the liquidity providers deposit funds into a liquidity pool which is used to supply funds to borrowers, and for exchanges.

Yield Farming Protocols/Platform

Since Defi became a prominent sector in the world of cryptocurrency, investors have started to invest in Yield farming using several protocols or platforms in the different ecosystems of Defi. These projects include;
Maker DAO, Compound, AAVE, Balancer, Uniswap, Curve, Synthetix (SNX), and many more 4.

Identifying A Legit Defi Protocol/Project

A lot of people have fallen prey to scams in the disguise of being legit and since Defi has gain prominence, you should be certain that there will be people who would want to do away with investors' money. So, how do you identify a legit Defi project from a Scam Defi project?

Goal of the Project

You do not invest in anything that promises a return on investment because you want to invest, you take your time to look at what the project is bringing to the table and although, most crypto projects follow the same trend for a while before changing, so if you cannot identify a legit Defi from a Scam Defi this way, then you can check out the other options.

Smart contract Audits

Auditing is a way of making sure that contracts are safe and can be trusted at any time. Personally, before investing in any Defi, I do my best to check if it has been audited because it gives me more confidence in the project compared to when it is not audited. Most scam projects will not care to audit their contract as they do not care about it.

Anonymous Founders

The only widely known anonymous founder in the world of cryptocurrency is Satoshi Nakamoto. If a project doesn't have a founder, then there is a possibility that it is a scam project and one should be very careful about it.

Project Access to Funds

SInce Yield farming works with Defi, and investors are to lock funds, then it needs to be checked properly if the founders do not have a way of manipulating the liquidity and taking away funds from the pool. If you notice any of such, then you should not invest in such a project.

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Conclusion

Decentralized finance is shaping the way we handle finance preventing censorship, discrimination, and political influence. Being able to utilize yield farming to earn a return on investment is another interesting part of Defi but since Defi is new, a lot of people would fall, victims to scams, so it is important to Do Your Own Research (DYOR) before investing your money.

Task

Write on a Decentralized Finance Ecosystem as well as a Project/Protocol in the Ecosystem.

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The Rules

  • Everyone is eligible to participate in this task.
  • The Post should be a minimum of 300 words and should be submitted in the crypto-academy community for visibility.
  • You should include the exclusive tag #gbenga-week7, #cryptoacademy, and a tag of your country (for example #nigeria).
  • Post should be your original content. Show references for images used when writing your post.
  • Task runs until Sunday, March 28th, 2021

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Image Credit

tokeny
coingape
myfriendcrypto.com

Sort:  
 6 months ago (edited)

This is yet another groundbreaking one from you professor @gbenga, thanks for the detailed lecture on DeFi. I look forward to making my entry sooner. Thanks for your review on my Task 6, you asked a question on it and I've provided an answer to it. I hope to have check on it sir and it hasn't receive curation, any hope on that sir?
Thank you, sir.

https://steemit.com/hive-108451/@fredquantum/steemit-crypto-academy-week-6-task-all-about-blockchain-security-2-or-lecture-by-gbenga

Done that already Sir, thanks for participating and I hope to see your entry this week.

 6 months ago (edited)

Thank you sir @gbenga. I acknowledge the review sir, though, I'm still expectant of curation on it . My week 7 task' solution is just on its way and about to drop soon. Thanks for your time professor.

 6 months ago 

Hello @gbenga, this is my week 7 homework. Thanks for another week of effort and work from you.

https://steemit.com/hive-108451/@allbert/crypto-academy-week-7-homework-post-for-gbenga-introduction-to-defi-and-yield-farming

Hello professor. Here is my home work submission of week 7. Hope so that you will soon visit it and review it kindly.

https://steemit.com/hive-108451/@steemlover63/home-work-week-7-for-prof-gbenga-or-or-introduction-to-defi-and-yield-farming

Thanks. It will be very greatful to me if you visited my post and appreciate my efforts.

Dear sir @gbenga your this lecture is really a very great again. This week topic is also a very wise choice. I will surely submit my home work ASAP.
But sir my week 6 home work has not been reviewed yet. Please visit the post and review it before posting the week 6 summary.
https://steemit.com/hive-108451/@steemlover63/steemit-cryptoacademy-home-work-task-week-06-for-gbenga-or-or-all-about-blockchain-security

Hello @gbenga, very good topic this week, congratulations. I kindly ask you to review my homework from week 6. Thank you

https://steemit.com/hive-108451/@dairhial07/crypto-academy-week-6-homework-post-for-gbenga-all-about-blockchain-security-2-esp-eng

Reviewed and voted friend, thank you

thank you very much teacher

Reviewed Sir

Yes, thanks. I guess it missed its chance to be curated/voted on. Anyway, thanks!

 6 months ago 

Hello professor @gbenga, you verified my week 6 homework which now stands at 5 hours to payout time, yet the post has not been voted on. Please, do something a matter of urgency. Here, is the post STEEMIT Crypto Academy Week #6 Task submitted to @gbenga | Application of Blockchain and Impact of Cryptocurrencies In the Banking Industry | @bukkyi4u

Goodday Sir, Please my homework post has not been reviewed. Thank you.

Thanks Prof @gbega for your relentless effort to ensure we get enlightened.. sir I'll like to remind you of my week 6 task,it hasn't been checked and verified.

https://steemit.com/hive-108451/@lhorgic/crypto-academy-week-6-homework-post-for-gbenga-on-all-about-blockchain-security-2-homework-by-lhorgic

Thanks in advance sir.

Respected sir, Kindly review my post of week 6. All other professors have given reviews. Thanks

https://steemit.com/hive-108451/@mawattoo8/2ejvnw-crypto-academy-week-6-homework-post-for-gbenga

Thank you @gbenga for this wonderful lecture. Will submit my assignment soon.

Nicely done and timely

Hello Professor, I enjoyed this week 7 lecture and learnt a lot from it. Thank you very much Sir. This is my week 7 assignment link:
https://steemit.com/hive-108451/@ericanthony/crypto-academy-week-7-task-by-gbenga-introduction-to-defi

Nice topic for this week @gbenga but my last weeks assignment has not be mark. the limk is below , i would be very happy if should check and do that for me.

https://steemit.com/hive-108451/@wonderbowy/homework-task-6-gbenga-the-security-benefits-of-applying-blockchain-within-any-industry-and-the-impact-of-cryptocurrency-on-the

Prof. @gbenga, good morning. My work is 5 days old and has not been reviewed. Do something about it

https://steemit.com/hive-108451/@promo-nigeria/crypto-academy-week-6-blockchain-security-part-2-homework-post-submitted-to-gbenga

Thank you

@promo-nigeria I sincerely apologise for missing out this post, please bear with me Sir

@promo-nigeria I sincerely apologise for missing out this post, please bear with me Sir

Hmmmm, it's OK. Thanks

https://steemit.com/hive-108451/@wonderbowy/home-work-task-7-gbenga-introduction-to-defi-and-yield-farming

hello @gbenga here is my work done on week 7 task please go through and mark me. thank you

 6 months ago (edited)

Good morning Professor @gbenga. Thank you for this amazing lesson. Below is the link to my homework task:

https://steemit.com/hive-108451/@reminiscence01/homework-task-week7-for-professor-gbenga-or-decentralized-finance-or-yield-farming-or

Hello @gbenga, very good topic this week, congratulations. I kindly ask you to review my homework from week 6. Thank you

https://steemit.com/hive-108451/@dairhial07/crypto-academy-week-6-homework-post-for-gbenga-all-about-blockchain-security-2-esp-eng

 6 months ago 

Hello dear professor @gbenga. I've made my entry for the task 7 and I hope to have your review on it sooner. Thanks for the lecture once again,sir.

https://steemit.com/hive-108451/@fredquantum/6g1kiy-steemit-crypto-academy-week-7-task-introduction-to-defi-and-yield-farming-or-uniswap-protocol-or-lecture-by-gbenga

Good evening @gbenga, please my homework task 6 is 5 days old today, kindly review it for curation. Thank you

Crypto Academy Week 6// Blockchain Security (Part 2)// Homework post submitted to Gbenga

Good morning Prof. @gbenga I have sent series of reminder to you to please review my post for curation but you refused even responding. I know you are doing good but then just tell me what to do.

The post is already 6 days old.

https://steemit.com/hive-108451/@promo-nigeria/crypto-academy-week-6-blockchain-security-part-2-homework-post-submitted-to-gbenga

Thanks and am waiting for response.

Good night @gbenga, here I leave you my homework, I will know how to thank you very much if you can review it, it would be highly motivated .. https://steemit.com/hive-108451/@adriancabrera/steemit-crypto-academy-task-7-write-on-a-decentralized-finance-ecosystem-as-well-as-a-project-protocol-in-the-ecosystem-or

Hello professor @gbenga

This is my submission for the post for homework task week 7

https://steempeak.com/hive-108451/@mandate/crypto-academy-week-7-homework-post-for-gbenga

Hi professor this is my homework for week #7 Topic: decentralized financial ecosystem and project/protocol in the ecosystem. By: @tanhunter254., hope you like it. Best regards and good wishes.

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🌟🌟🌟 - 🌟🌟 - 🌟


Compartido en Twitter: Link-tweet

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Good evening @gbenga. I have sent series of reminder for you to review my homework 6,all to no avail.

https://steemit.com/hive-108451/@promo-nigeria/crypto-academy-week-6-blockchain-security-part-2-homework-post-submitted-to-gbenga

Please advise me

Hello professor @gbenga, cordial greetings, this is my assignment number 6, it has not yet been reviewed.

Dear Professor, @gbenga

Your are requested to review my assignment task in week 7. Here it is :: https://steemit.com/hive-108451/@eh-shohag/crypto-academy-week-7-homework-post-for-gbenga

Thank you.

Good morning sir, please try not to skip this one like the one of last week. Here is my homework for week 7

https://steemit.com/hive-108451/@promo-nigeria/steemit-crypto-academy-week-7-introduction-to-defi-and-yield-farming-uniswap-dex-homework-submitted-to-gbenga

Thanks

@gbenga, please my homework was reviewed but not curated on or before 7 days. Please what should I do?

https://steemit.com/hive-108451/@victorylive/crypto-academy-week-6-blockchain-security-2-homework-submitted-to-prof-gbenga

A big greeting @gbenga, I really admire your work, they are very well done. and the lecture is pretty clear, I plan to upload my homework 7 today, but was wondering if you would review my homework from week 6?

https://steemit.com/hive-108451/@juanjo09/la-seguridad-de-blockchain-y-la-industria-tarea-semana-6-gbenga-esp-eng

Hello @gbenga, I hope you are well. Here is my entry of week 7

https://steemit.com/hive-108451/@juanjo09/defi-y-ecosistema-de-orbit-chain-or-un-ejemplo-simple-para-entender-un-ecosistema-financiero-or-tarea-semana-7

And I hope my homework from week 6 can be evaluated so that it receives healing please, the link places it above. Thanks in advance.

Thank you professor @gbenga for the correction on the post. I have to re-do the assignment again, because I want to learn. I just hope you make out time to go through it once again pleeeaasss.

https://steemit.com/hive-108451/@ericanthony/crypto-academy-week-7-task-by-gbenga-introduction-to-defi#@gbenga/qqis9k

 6 months ago 

Thanks professor!

  • Here is the translation of this post:

LINK

Hello professor @gbenga, my submission for the homework task week 7 is two days old but still yet to be verified, please look into it below

https://steempeak.com/hive-108451/@mandate/crypto-academy-week-7-homework-post-for-gbenga

 6 months ago 

Good day Prof. Here is my homework

Done that already Sir, thanks for participating and I hope to see your entry this week.

 6 months ago 

hi sir, thanks very much for this insightful teaching. here is the link to my work https://steemit.com/hive-108451/@gentles/crypto-academy-week-7-homework-post-for-gbenga-27-03-2021. i am looking forward to the next lecture. thank you

Dear professor @gbenga, my week 7 task that was submitted since 4days ago has been reviewed by you. Please kindly look into it sooner. Thank you

This is the link to the task;
https://steemit.com/hive-108451/@temitopef/homework-task-7-introduction-to-defi-and-yield-farming-reef-finance-or-lesson-by-gbenga

 6 months ago (edited)

Hi professor @gbenga my task 7 is four days old it has no been reviewed thanks https://steemit.com/hive-108451/@mccoy02/homework-task-7-by-professor-gbenga-decentralized-finance