CEYPTO ACADEMY SEASON3/WEEK4/HOME-WORK POST FOR STREAM4U

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What Is the Importance Of the DeFi System?

Before I proceed it's very important we Explore what defi system system is all about, defi system simply means De-centralized system, a system that isn't controlled by any central authority this system is totally autonomous which means it stands alone. The system is built to favour a one step which is financial stability and you as an individual has control over it since it involves capital and the ecosystem revolves controlling your assets and making sure that every token invested is accounted for and been safe along the process. Back to it's importance.

Defi is a short for of Decentralized finance it has a great leverage on blockchain technology, it's Introduction have a line light courtesy the way financial transactions are been regulated and transacted, it's Introduction came and made an ease way regarding the perception we had transacting financial within an individual with the third party and it prevailed beyond what our overview was courtesy the financial market.

One of it's main aim came at a spot when attention was shifted from our financial economy and there came a block-chain that was very transparent and accessible it relies on three elements I will list then as programmability and interoperability Decentralized finance seems to been arti-sants of our open financial movement

Control of assets: in a Decentralized system individual had the ability to control he's assets even if it's been managed by the ecosystem, you determine when your funds should be transfered from you to any third party, let's take for example our banking sector if you operate with a particular bank you have access over your funds and they in this process will be accountable to you. Along the process your token should be safe and secured.

Provision of lending and borrowing of assets: there are many types of Defi system one of then is the Etherium blockchain it will impress us that blockchain can't work without nodes and blocks, same is attributed to a Decentralized system looking at the Etherium blockchain you can lend in your token and you aim reward courtesy your crypto currency whenever it's been put into a pool

Same procedures is quiet similar comparing it to what happens in our banking sector, the fee you deposit's is traded on and the depositors gets an annual return courtesy their token.

Security and scalability: in dApps your token is secured and a great service is been provided to safe guard your token from the exposure of fraudulent people from gaining access to your token, it's very difficult to hack a block chain simply because it's messages over there is encrypted.

Since so many financial services is been carried here in a Dafi system it's supposed to run In a rigid chain which is rightly so on like what we have in the Etherium blockchain it is one of the most popular blockchain around the globe today. If a transaction is been carried out you will see the hash, and the block, if you copy the hash you will very likely to see the details of that transaction, what you need to do is to paste it at the search section of the blockchain and every information will display vividly.

Decentralized transactions: it eradicates the usage of a centralized system for getting hold of assets for the purpose of trading and other purpose, as we all know centralized marketplace has a total control over our assets and they are always bounds to fail at all time. It gives user's massive chance of invasion, while in DEFI the usage of smart contract is emminent and by so doing cost of trading is totally brought to minimal.

Absolute Earning of Fiat: the ability to earn money is rigid and that's why so many people today lies on the bar of a Defi system it has multiple advantages at which one can earn money, some Decentralized apps like Dharma, gives you the lime light to do your borrowing and pay back when time due, here individual's have the mandate to utilize a better investment on like what we have in our banking sector today.

Flaws in Centralized Finance.

Let's realize that opposite of centralized is Decentralized and in as far as the both exists there will always be flaws and I will specify on the centralize finance. The flaws includes

Delay in transactions speed: sometimes there are always a delay in the way transaction speed operates it might be limited up to an extent courtesy the centralized financial system, although in a block-chain it has a like to like timeframe for your transac to go through but that's not the case in a centralized financial system let's take banks for instance, you might want to receive money from the third party but because of one thing or the other that transaction may be hulted.

Lack of legitimate education: before you can explore the financial market/system at least you need a concise basic kind of legitimate literacy concerning how some certain parameters are been used you must understand how the elimentary financial concept works so that things will be very eazy for the individual if you fail to explore the right options it might be very difficult for individuals to make a better decisions. Honest those without formal education will find it very difficult to explore in the financial system.

High upgrade in global inequality: in a global financial system the most successful people are those who have an overview on how the system works and it's been operated, those Who have massivr capital to deploy and in return make massive income, centralized financial system allows you to make an upgrade whenever you like and it gives you access to it. Let's take our banking system for example your ATM there might be an option when changes will be needed courtesy your pin and that opportunity will be given to you.

DeFi Products. (Explain any 2 Products in detail).

Here I will be talking about Defi product in financial prospect that offers a great detail in the Decentralized figure.

✓ Decentralized finance Decentralized finance works In a Decentralized manner, this offers a great index on how borrowing/lending, exchanges are been carried out in here you can easily swap, from one coin to another with a specific time-frame, and along the process you gain massively reward, you can also stake and in the end you get the reward and the APYwill all be yours.

Risk involved in this seems to be minimal to me because some AMM is basically used, and if you toll the line of swapping you may just be pointing at the righ direction, just-swap is key here but there are totally limitation as you can only swap coins associated to TRC-20 token, let's say for example I want to swap to other coins under TRC-20 I have to use a figure called Tron, and lists of coin I can swap to will be listed too as well, you can't swap from TRC-20, to coin in BEP-20 it doesn't work that way.

Just-swap only allows coin under TRC-20 token from the image I uploaded I attempted to swap from TRX to USDT, here you don't need any form of pair just place your swap and along the process your transactions will thus be executed.

Lending is also a great over important synerio as far as defi product is concerned it gives an individual to donates he/her assets in order to make massive profit in the end, along the process regarding the token you desire to lend an overview will this be allocated to you and you be associated to an APR your annual intrest per annum.

Just-lend gives you that mandate remember assets can be conjugated togeth to facilitate this process but if you think it's possible exploring it seems very eazy, just-lend gives the clear opportunity to lend your assets and make massive gain along the process.

Here you'd assets will be put into a liquidity pool courtesy jtoken and an APY will signify how many percentage you will attain, just-lend has to deal with the great features it possesses in an exchange and you can find similar thing in different exchange, you have two options either to supply or borrow, from the image uploaded you will find out that I tried supplying 20 TRX token to a liquidity pool courtesy jtoken, and I was given 5.15% APY, for the total number of tokens I desire to supply.

Same thing is applicable not for TRX, token alone but similar gesture associates with all other jtoken you have for me I have some JST token, USDT, and TRX token, plenty TRX is required to burn in order to facilitate the transaction and smart contract too. I can decide to supply any and in the end I gain my APY percentage, I can also decide to borrow this will be done within my range and it's very optional.

Risk involved in DeFi

In everything we do in life risks are always involve and in the case of Defi, risk too is very much involved, here on my own I will explore different types of risk I think is involved here

Hardware and software Risk: When we talk about hardware and software it's practically a protocol here technical risk is inevitable here the total functioning of the platform can be tempered with of an access to the hardware and software, they stands as a major tool and components that withhold's the functionality and functionability of the whole defi system. Smart contract during it's enablance of automation can also be tempered with the vonurability it possess makes it prodominant and along the process it may lead to technical risk in DEFI.

Remember in running Decentralized service the component responsible for such duties is the hardware it serves as a root of infrastructure to operate the devices emernating from the Decentralized chain.

Distribution of Daniel in the service software possesses is eminent thereby causing a crucial technical risk courtesy Defi software, some controll's of overview, injections, these can be disrupted and it will affect the effectiveness functioning of the system.

Financial Risk: this involves the the miss management of a clear opportunities associated with the investments made on the Defi, in this case the ability of an individual to manage investment will be very subjective.

Memory Risk: this has to do with the process by which memory is disrupted and there will be total delay in accessing the composite memory this may lead to a total overall of the entire Defi process if the APi is tempered therefore you should expect an decline in the date storage in this process there will be what we call memory loss in this case the imput and output will be very vonurable.

There are always risk in everything we do in life, so in Defi you guys should be fully alerted and along the process look for a way to amend the impermanent risk involved in this particular one

What is Yield Farming?

Yield farming is simply the process of putting your crypo in a spot and along the process making massive profit from holding to it you get reward for doing this, you can as well call yield farming liquidity mining in some cases farming can be composite to staking when you stake you still hold on to your crypo after a while you gain APY/APR as a result of the quantity of token you have stated.

You can do pool staking this particular one comes with a greather reward it works in form of a liquidity providers here you can decide adding your token to a liquidity pool, this pool has a smart contract that involves different fund's you will get a reward for providing liquidity pool, that's inevitable.

We need to note this yield farming basically is done using ERC-20 tokens, the reward attained also falls in the line of Etherium token for now that's how it works you can decide to transport your funds just to mate high profit and massive return regarding how many token that is been provided to the pool. Let's say for example I provided 40 ERC-20 to to the pool you should expect higher APY/APR in return compared to the person who provided less to the pool. It seems to be the greather the token the higher your reward.

How does Yield Farming Work

It's totally in resemblance with MMM automatic market maker, this is associated with liquidity providers and liquidity pool, the ones called liquidity providers is saddled with the responsibility of providing tokens into the liquity pool along the process they gain rewards. Revolving around the pool has so many constituents which gives user's the mandate to borrow, lend or exchange tokens too, under ERC-20 tokens.

For you to use this platform there is a network fee that is attached as far as this particular one is concerned the fees collected from those who Carry out transactions in this phase is then paid to the liquidity providers that means those Who deposit funds in the liquidity pool, this is a basic steps on how MMM operates.

The funds basically deposited here are basically stable coins, this means that they are coins that doesn't rise or fall, they can be used swap and getting other coins, some common stable coins used are as, DAI, USDT, BUSD, USDC, some tokens has atoms for example if you deposited an ETH they will have cETH, if you deposit CAI they will have cDAI and so on.

Here I will try adding liquidity to to bunny first I clicked on liquidity, next I clicked on Add liquidity the process has to be smooth, the next phase I entered a figure 20 BNB, and I got 403.426 Bunny.

From the image looking at it critically well you will understand that there is a price and pool share let's say I depositing to the pool has a share regarding the total number of token I have deposited

Let's explore the farm aspect of the pancakeswap and see how many APR that will be earned, first click on farm and follow up from the image uploaded you will find out that the CAKE-BNB earned me a 65.65% adding to LP.

**Here this is the time I will harvest the token I have added to the L.p courtesy the farm, after planting what next you harvest .the pair still remains CAKE-BNB.

What Are the best Yield Farming Platforms and why they are best. (Explain any 2 in detail)

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Before I answer the question we should be able to know what yield farming is, it is a part of Defi that is in conjunction of throwing crypto assets to work on your behalf, at this point they will be placed on what I call autonomous financial protocol at this phase so many things will come to fruition like lending, staking, and providing liquidity in order to gain massive reward.

For me I think my best two yield farming platform has to be pancakeswap and Venus,

Pancakeswap is the first project that came with billion dollar and it's maket maker is automated and it is Decentralized in nature it's protocol is very massive I can't overemphasize this liquidity providers put in their token's in a liquidity pool in order for then to earn rewards.

yield farm remains galvanized as well with more than 10 different pairs yielding an annual APR of 300%+ at the time of writing this post, you can also do your staking but the more beneficiary will be pool staking this particular one has massive rewards.

Venus

Venus has to deal with money lending and borrowing individual's has the mandate to make their deposit's their token us slowed here be it BNB or ETH, all has to be stable coin with the sole motive of making massive profits. The intrest you earn by depositing tokens in the liquidity pool can be used as collateral in order for you to inquire more assets.

Venus sounding like a planet name was rescently launched it came to lime light in the year 2020. Today Venus is one of the raining protocol around the globe it is also in BSC, within the last couple of time it has gone up.

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The Calculation method in Yield Farming Returns

Annual percentage Rate in this case is the return you get after depositing your token in a liquidity pool in the period of one year that is annually.

Now let's say I deposited a CAKE into a liquidity pool for the period of one year my APR, which is the annual percentage rate, determine it I will explore the formular.

(1 + r/n)n -1

r= the rate, n=compound period, that is compound period will be subtracted by 1. Now let's say I deposited 200 CAKE into a liquidity pool for the period of one year my APR calculating it will sum up to be

r= 100%, and here I staked 200CAKE to a pool

n=compound period 365 days makes one year

Let's equate it to this formular below

(1 + r/n)n - 1 <---> (1 + 1/356)365 - 1

(1+100/365)-1<-->(1+1/365)365-1

What we are looking for is the return in your stake after one year

0.2767-0.0055=0.2712

0.2712x200=54.24 here you have to multiple the amount you staked to the percentage after the period of one year annually

My APR for one year courtesy the token I staked will revolve around 54.24%.

Advantages & Disadvantages Of Yield Farming.

As we should all agree that anything that has advantage also has disadvantages in this case I will list out the advantages and disadvantages of yield farming.

Advantages	Disadvantages
There is always room for staking and along the process your return of investment depends on the volume at which you have staken, the higher your stake, the higher your return after one year	transactions fees are just too much, Etherium blockchain consumes and operates thereby charging gas fee, and other charges so charges are very high.
There are always room for lending and borrowing and along the process it won't be limited, depositing a token in a pool is quiet affordable	you might experience liquidation, this will prompts when a user's collateral won't be capable to ascertain the loan he has collected.
In as far as investors or we may call them market makers deposit their finds in a pool and make massive profits out of it	there will also be a point where sharp pool will be experienced by the market and there will be impermanent loss
When there is a change let's say the percentage of a token makes an uprise there will be a greather intrest on the mode of token that will be borrowed	whenever a token is been static let's say a token is stocked at 60% when there is a decrease it will affect the market structure.

conclusion

• Yield farming is simply making your crypto work for you even without you doing anything its a new project in as far as it sound beautiful in the ear there are always advantages and disadvantages note this.smarts contracts are involved and along the process you earn massive income out of it.

• Yield farming involves the movem of cryptos in a unit by so doing people can borrow, and you the lender gains massively as a result of the quantity of token you have deposited into the pool, yield farming operates in a Decentralized finance Defi Farmers cultivate and in the end reaps massive income in the end.

• People who loves crypto holding is in a greather advantage because this is a fantastic way for then to earn massive rewards courtesy their cryptos, you will be allowed to deposit your token and you should realize that it is basically building courtesy Etherium blockchain, there is always a change as a result of how investors decide to Hodl.

• Defi is more of a Decentralized finance, we have so many Defi system I can call out the bank they hold our Fiat trade on it issue out loans and other things and in the rest we gain little from our token we keep under their custody

• Centralized Defi system I will say it good but there are up and downs, as far as it involves a financial system institutes we sometimes do experience some delays in the way transactions are been carried out.

Many thanks to you professor @stream4u, you really explained well I have really learnt alot looking forward to your next lectures