INTRODUCTION TO DEFI - SOME TOP AND EXCITING DEFI PROJECTS
INTRODUCTION
Defi is the short form for Decentralized Finanace. In other words, it is the financial sector that is decentralized. This means that users solely control their funds and assets and are not regulated by a central body or authority. This is possible with the aid of blockchain technology and has several use cases beyond direct transfers including; insurance, loans, derivatives, crowdfunding, etc. The best part about defi is that in all its applications, there are no intermediaries.
This is the underlying reason for its popularity and the main reason why it is gaining massive momentum in the crypto space. Other than that, defi is still a new kind of technology with many developers devising ways to better the technology especially in eliminating common bugs that may be baked into its protocol.
Some interesting defi projects can be seen under the sectors below.
Defi projects under each sector: https://defiprime.com/
In this article, I will be taking you through these top defi apps; Maker, Compound, Synthetix, bZx & Uniswap.
MAKER
Maker is the sovereign token of the MakerDAO and Maker Protocol. MakerDAO is a decentralized organization whiles Maker Protocol is a software platform both of which are based on the ethereum blockchain. This project was thought of as early as 2015 but was fully launched in 2017.
The official platform of this project is https://makerdao.com/ and it works by operating DAI. DAI is a decentralized cryptocurrency whose value is pegged to that of the us dollar making it a much stable currency.
A quick look at maker's interface shows its ecosystem, developers, foundation, community, a place to learn more and the ability to issue executive votes in order to make changes to its protocol.
Platform's interace ;https://makerdao.com/en/
MAKER'S ECOSYSTEM
Maker foundation has a applications and services that makes use of DAI in its operation. This ranges from saving of assets in one place and to generation of DAI by depositing collateral. Here are some applications of the Maker Foundation;
Oasis.app : This allows you to save all your DAI in one place. DAI is stable since it continuously tracks the USD. Here, you are in complete control of your funds as there is no minimum withdrawal, instant transfer of funds and also allows you to grow your savings.
Governance : This is where various proposals are placed for community approval. This is done by issuing executive votes in support of this project. Also, before the project reaches the executive voting stage, a rough polling voting is done to ascertain the level of approval here.
Migrate : This allows you to move your available DAI into newer versions of maker's wallets. To get started, you must connect to wallets such as; Active Wallet, Trezor, Ledger Nano, Wallet Connect, Coinbase Wallet which serve as multi-chain wallets for funds.
Oasis Borrow : Here, you can put your funds as collateral in order to earn DAI against it. In order words, your assets are able to work for you by contributing to their liquidity through a vault.
Maker ecosystem; https://makerdao.com/en/ecosystem
COMPOUND
Compound is one of defi's top lending projects that allows its users to deposit funds into any of the many liquidity pools it supports. Once a user deposits their tokens into one of compound's liquidity pools, they earn COMP tokens depending on the amount staked. This can then be used to claim initially invested tokens at your own convenience.
Over 2,300 COMP tokens are distributed per day to users who use Compound to either supply or borrow assets. As of the time of this post, Compound had a daily distribution of 2,312, a total 649,644 distributed tokens and a remaining 3,855,304 tokens.
https://compound.finance/governance/comp
Once you start to accrue come COMP tokens you can now track your earning using the dashboard after connecting your wallet.
First connect your wallet
Now you can track earnings here
Compound's platform also display's the market distribution of the COMP tokens sorted by day, supply, borrow and total supply as seen below.
https://compound.finance/governance/comp
SYNTHETIX
This defi protocol is built on the ethereum blockchain and provides on- chain exposure to all sorts of crypto assets. It was first launched in 2017 by Kain Warwick with the name Havven (HAV) but later got rebranded to Synthetix. What is different about this project is that it grants users access to various assets through issuing of synth.
This platform allow you to maximize your earning potential by choosing either of the following routes;
Earn : Add collateral to the its protocol in order to generate rewards.
Build : Empowers a variety of financial tools in order to harness deep liquidity of synthetix assets.
Stake : Stake you SNX tokens with the platform and earn on a weekly basis.
Synthetix also presents a variety of derivatives that are utilized by various platforms, projects and interfaces. These derivatives fall under these sections; trading, synth liquidity & staking.
Trading : Here, you would be able to access the derivatives; KWENTA, DHEDGE & PARASWAP which have their own unique operations and services.
Synth Liquidity : You can access the CURVE liquidity pool for stable coins or UNISWAP for automated liquidity provision.
Staking : The XSNS and SNX staking tools here brings a decentralized feel to asset staking through automated operations and streamlined flow.
https://www.synthetix.io/
You can also learn more about the Synthetix platform here
bZx
This is a network that seeks to be the most powerful and leading open finance protocol. It empowers various aspects of the financial process including lending, borrowing and trading. Various aspects of the BZX Protocol that makes it a standout project and a defi giant include its ecosystem made comprising of; Defi Saver, Betoken, eidoo, Staked, Dexwallet, 1inch, Idle, Paraswap, etc.
A quick look at bZx's large ecosystem ; https://bzx.network/
bZx provides a decentralized gateway towards margin trading. This has a lot of advantages when compared to the traditional style of margin trading on centralized application. This is due to a variety of reasons;
Risk of asset loss is minimized : This is because as your keys stay in your control, your alloted funds to either borrowing or lending isn't prone to any form of cyber attack or hacking event.
Earn by holding assets : Margin trading here presents a higher interest rate to loaners whiles funds stay in your wallet, offering a pathway of passive income.
Affordable trading: This is because fees here are very low as compared to centralized exchanges since you don't need to pay a middle man to protect your funds.
https://bzx.network/
UNISWAP
To see my full article on the Uniswap protocol. Kindly visit this post
Uniswap is a decentralized exchange platform on the ethereum blockchain that allows users to gain full control of their funds whiles trading on it. It utilizes the automated market maker (AMM) algorithm to predict market prices in order to execute trades. This is quite a twist from that of centralized exchanges whose prices are determined by the supply and demand of the token.
Visit Uniswap's official platform through; https://uniswap.org/. Here you can access a variety of uniswap features including their products such as the uniswap app, token lists, analytics, sybill, unisocks and unpig.
Currently, it has over $950m 24hr trading volume and 1400+ markets according to coinmarketcap
This brings its all time trading volume to $190+ billion with 72k+ liquidity providers, 34 million + all time trades and 200+ defi integrations. Uniswap supports the swapping of ERC 20 tokens
Uniswap makes it easy to list new and emerging tokens as it allows anyone to list their new assets. Whiles this creates a sense of freedom in the crypto space, scammers are able to exploit this openness and dupe people of their precious funds using bogus token addresses. As such, it is very important to investigate the interested token to ascertain its authenticity.
It is also quite secure as it links the exchange site to your private wallet for funds storage. This means that the tokens will continue to stay in your custody for as long as you want so long as your private keys are secured.
Uniswap operates through coin swapping of ERC-20 tokens using smart contracts. These usually come with some cost of eth gas fees sent from your private wallet.
Example of a swap trade with labelled details on Uniswap can be seen below.
Sample coin swapping on Uniswap
Thank you for your attention.
I would appreciate your thoughtful contributions in the comment section as well. Thank you for your atttention.
Many thanks to the steemit team ( @steemcurator01 & @steemcurator02) for this initiative.
To the attention of professor @yohan2on
Twitter Share : https://twitter.com/bananmuni/status/1367978387457839105?s=19
Hi @njaywan
Thanks for attending the 4th-week Crypto course and for your effort in doing the given homework task.
Feedback
This is excellent work. It's well researched and fully packed with all the necessary information about the various highlighted DeFi protocols built on the Ethereum blockchain. I am impressed and I must confess that I enjoyed reading every text of your article. keep working hard.
Homework task completed
10