Homework task week 7 by professor @gbenga submitted by @ngoenyi
INTRODUCTION
The word, Decentralised conotes non-centralised finance ecosystem. We are already familiar with the financial system that is centralised with its failures. Decentralised financial ecosystem therefore is the whole system of finance that is not centralised. It is a system that allows user to be in full control and it is open sourced. I is transparent and permissionless unlike the centralised system. It is built on the blockchain networks.
Advantages of Decentralised Finance Ecosystem
It is open sourced and this means that anybody can get involved unlike our traditional financial system that only permits the elite few.
It is permissionless , which means that you can authorise your own transactions without waste of time.
It does not require any intermediaries for a transaction to be executed.
Disadvantages of Decentralised finance ecosystem
The whole risk solely lies on the users. Once there is any mistake, the loss can not be recovered unlike where is an intermediary.
Some of the applications built on decentralised finance ecosystem are poor in performance that the centralised finance ecosystem.
It's difficult to find a particular finance ecosystem of defi that will suit a particular use case
The users need to be given the reasons for them to switch to tell decentralised finance ecosystem, that is to say that their should be an incentive for doing so.
Who can make use of decentralised finance ecosystem?
The decentralised applications of finance make s it easier to process lending and borrowing. It also make funds available for the common man who may have been seeking to borrow from the traditional financial system but couldn't be able due to its stringent measures. With decentralised finance, the borrowers and lenders can get to know each other and transact business without much protocols. This ecosystem ensures instant transaction settlement, the ability to collateralize digital assets, no credit checks, and potential standardization in the future.
Monetary financial services can come into play as a result of this decentralised finance ecosystem. Services like the insurance of stablrcoins and mortgages are now possible. Stablecoins are being introduced which are coins that are pegged on stable assets and can be used in the day to day transactions and this helps to solve the volatility problems in the cryoto world and can be transferred with ease without being monitored by any central authority.
In our traditional financial system, the processes of getting a mortgage is such that it takes a whole lot of time to complete. But with this system, it becomes easier and attractive.
Bringing Insurance on the blockchain removes intermediaries and distributes risk between many participants. This could result in lower premiums with the same quality of service.
Oasis Trade, Borrow and save
This is one of the decentralised finance protocol that runs on the Etherium blockchain. The platform allows users to trade, borrow, and save their assets or tokens. It is built on an audited smart contracts that is created by makerDao. It was developed in 2019.
All that one needs to take part in this oasis is just your Etherium wallet like HB wallets and this makes oasis very easy and accessible to any user. Users can borrow against oasis using Dai. And it is decentralised, non-custodial and available to all users with or without account. It is free to use but only Gas and other associated fees that has to do with the Maker protocol are required
Oasis Borrow
This allows users to access the Maker and then secure their assets like the ETH and BAT in Vaults in oder to generate Dai.
Each collateral asset that is deposited have it's own Vault, hence, a user can open several Vaults from the borrower dashboard
To open a Borrow position in oasis, look for the plus arrow on the left-hand side of the page. This will bring you to the collateral overview to select which type of collateral your Vault will be collateralized with.
Then select the amount of the collateral type that you wish to lock within this position. The price is using oracles, making a Max Dai Debt figure available and that shows the maximum amount of Dai that can be accessed from loan.
On the right-hand side of the page, users will see very specific information regarding the position including the Collateralization Ratio (which must remain above 150%), Liquidation Price and current asset price. Similarly, users are also shown the Stability Fee – or the annualized debt that incurs on an outstanding loan position.
Before approving the creation of a Vault, Maker allows traders to review these metrics again, as to ensure that all details are properly vetted prior to opening a new position.
One of these metrics is the Liquidation Penalty – or the loss that is incurred should the collateral being used fall below the 150% over-collateralization value. For this reason, it’s crucial to ensure that Vaults are opened with a minimum of 200% collateral to account for any sudden price volatility that could liquidate the position.
After selecting “Open Vault”, a transaction will occur in the connected web3 wallet, effectively allowing smart contracts to withdraw the amount of collateral being posted, and returning Dai.
Active Borrow positions can be managed through the user dashboard, and all borrowed Dai (plus the Stability Fee) must be paid back to close the position.
Dai created using Oasis Borrow can be traded and transferred at will by the borrower, with locked collateral being released once the debt has been repaid and the Vault has been closed.
Oasis Save
This portal allows Dai savings rate mechanism in MCD, and this earns users more Dai. It provides access to the make protocol were me calling his Dai in a smart contract, turn on DSR mode and get more Dai at the savings rate. The Dai that is locked is only used the control of the user so he or she can just wonder his or her Dai to stop receiving the DSR.
To save in oasis, simply input the amount of Dai you wish to lock and press “Deposit”. This will queue a transaction in the web 3 wallet being used.
While it is being processed, you will see a notification in the top right side of the page. Once approve the “Balance” will be updated and you’ll start earning Dai in real-time!Dai can be withdrawn at any time using the “Withdraw” feature
Oasis Trade
enables market and limit order with assets being exchanged directly within the connected web 3 wallet.
Oasis Trade is for those who want to exchange between forms of collateral to get started with the oasis, they borrow it to convert collateral back to Dai to close vault.
To start trading in oasis,
Quickly swap your extra Dai that you have available for trading to Wrapped Ether (wETH), Augur Reputation (REP), 0x Protocol Tokens (ZRX), Basic Attention Tokens (BAT) or US Dollar Coin (USDC) using Oasis’s non-custodial DEX – Oasis Trade.
Thank you so much for reading through my homework task. @steemitblog and @gbenga, here is my homework task submission for week 7.
CO: @steemcurator01
Cc : @steemcurator02
Cc : @steemitblog
Cc : @gbenga
This is my introductorypost here
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.
Remark
The Oasis protocol was well explained, looking at its easy access to Maker as well as using DAI (Maker stable coin).
Rating 9
Thank you so much dear professor @gbenga for reviewing my homework task for week 7. I appreciate
You're welcome Ma'am
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