CRYPTO ACADEMY WEEK 7 HOMEWORK POST FOR @gbenga 27-03-2021
DECENTRALISED FINANCE (DEFI)
Decentralized financial system as opposed centralized financial system has no intermediaries like brokerage. It is very transparent and also open source. Decentralized finance has a world or ecosystem comprising of projects that try to make DeFi system convenient for its users. The DeFi system includes platforms such as;
• Market place and liquidity: this is where trading of currencies and other digital assets activities are done. It includes ETORO, prime XBT etc.
• Wallet and asset management: they provide services that aims at conveniently aiding its users to issue and manage assets.
• Lending: just like the centralised system, loans can be given in the DeFi system. Platforms include SALT, Celsius.
• Payment: they handle payments for their users.
• Identity: credible identity is needed for a secured financial system, platforms like Civic and Block pass in this project provides such services.
ETHEREUM ECOSYSTEM
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It is an opensource that works with a decentralized blockchain. It runs on a cryptocurrency called ETHER which is used as a cryptocurrency to trade. It was introduced in 2015. Transactions with ETHEREUM are fast, transparent and very reliable. Since it’s a DeFi ecosystem, it’s not controlled by a central authority and cannot be altered and influenced by a third party.
UNISWAP PROJECT.
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Uniswap is a cryptocurrency trading project for ETHEREUM in DeFi. It uses smart contracts to execute transactions among cryptocurrency tokens on the Ethereum blockchain. The native token of Uniswap is UNI. My Ether and Meta Mask wallets supports Uniswap to trade ERC-20. By market capitalisation, it is the second largest cryptocurrency project. Their source code is publicly accessible for use (open source code)
FEATURES OF UNISWAP
• Users have the overall control of their funds.
• It is also safe to use since no third party has access to user’s data.
• Since it is a DeFi project, trades are without intermediaries
• It is also an opensource code project.
HOW IT WORKS
Uniswap is a DeFi project which means it needs no “middle man” for an exchange. It uses liquidity pool made by liquidity providers. You can make money by contributing to the pool and get awarded with a token.
It charges a fee of 0.30% from a user for every trade and transfers it to a liquidity reserve of which a proportion is given back if the user wants to exit.
It also works with smart contracts, which are, Factory and Exchange smart contracts. To add new tokens, the system uses Factory contract and uses Exchange contract for token trades.
HOW THE PRICE OF A TOKEN IS DETERMINED
The supply and demand of an asset is used to adjust the price, this method is the automated market maker system. The price of a coin depends on the proportion of how many coins there are in their respective pool.
BENEFITS OF USING UNISWAP
It protects the user’s trades and assets from any third party which makes it safe to use. It has a lot of privacy for its users. And also, easy to use.
HOW TO USE UNISWAP
You will first need a wallet, such as My Ether wallet, ERC-20 and ETHER. Place orders for UNI.
CONCLUSION
The DeFi system is very safe, fast, convenient and transparent financial system that is going to have a great positive impact in the future of financial transactions.
Best regards to you Professor, @steemcurator02 @gbenga @steemcurator01
Thanks for being a part of my class and for participating in this week's assignment. I hope you learned from the class as the aim of the school is to teach and allow people to learn alongside.
Review
Good writing, I hope you improve on your image usage, and using copyright images isn't accepted and will reduce your point in the assignment.
Rating 4
ok sir @gbenga, i really learnt a lot and i will work on the copyright images. thank you very much