Crypto Academy Week 4 Homework Post for @yohan2on submitted by @prakhar9675

Hey there this post is against the Home work given by the cryptoprofessor @yohan2on that was based on the decentralised finance or we can call them DeFi apps.

So let's have a look on these all including apps like maker, uniswap etc.

So let's get started

what is DeFi

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DeFi apps is the abbreviation of the term decentralised finance. This means a sector of finance which is totally decentralised and there is no any so called 3rd party apps like brokerage and bank and are open to everyone.

To achieve its goal, DeFi is very relies on blockchain, cryptography and smart contract. Smart contract are the main block building of DeFi.

DeFi plateform also allows user to lend money to others or to take loan from others to use at a certain rate. These plateform also gives high returns but they are subjected to high risks too.

There are many advantages and disadvantages of DeFi apps.

Advantages of DeFi apps

• the biggest advantage of DeFi app is that it is decentralised. No one has absolute power in this system.
•• Second biggest advantage of DeFi apps is that it is available for all. Everyone is allowed to use these apps and also these are very cheap.

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Disadvantages of DeFi apps

•The one of the biggest disadvantages of DeFi apps is that it is still in its infancy stage. On a hand, we have a Fully developed banking system and on another hand this is still in the process of development.

•• As we discussed before, this system gives you higher returns but on the other hand it is quite risky. So the risk is one of the disadvantage of this system as it is quite big.

why all/mostly all DeFi apps are built on ethereum blockchain

When we see carefully we found that all popular DeFi apps are developed on ethereum rather than on any other blockchain and the reason behind it is that ethereum allows using of some language that are essential for building these well developed apps
And also it allows to build many types of developed smart contract that helps in building these apps.

what is maker DeFi app

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Maker project was the first step towards the decentralised finance ecosystem.
Maker is the governance coin of makerDAO protocol that allows it's user to locks it's saving in a coin called dai. Dai is a very stable coin and it's value remain very close to USD. One of the major function of maker is to ensure the value of Dai remains very close to USD

Also it allows it user to save it's money and also gives higher returns.

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How maker works

Maker control the value of DAI coins. Instead of using USD to do this, maker use Ether and other coins for this.

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When the value of ether fluctuates against the value of usd, maker with its smart contract to keep the value of DAI constant.
Whenever the value of Ether(or any coin which it uses) increases against the value of usd, maker automatically increase the liquidity of the same coin into the market and ensure that the value of DAI remain constant against the value of usd.

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And whenever the value of the ether (or the other coin) decreases against the value of usd, it blocks the liquidity automatically and ensure the same.

Synthetix

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Synthetix is a DeFi app, that works on ethereum rather, and enables the issuance of synthetic commodities that includes gold silver and many other synthetic commodities.

Earlier, using the DeFi apps we were only able to issue the block chain based assets. But in 2017, Synthetix was launched and the whole scene changed.

Synthetic assets are such financial instruments that are based on ERC-20 smart contract that are known as synths

Synths enables to trade on cryptocurrency, indexes, inverses and also on real life assets like gold, silver.

How Synthetix works

Synthetix normally uses a smart contract that is based on the price discovery protocol that are called Synth
This protocol discovers the price of a asset and allows you to hold and exchange that asset.

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In this manner, Synths provide exposure to assets normally inaccessible to the average crypto investor — gold and silver, for example — and lets you trade them quickly and efficiently.

Compound

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This app was founded by Robert Leshner and this allows user to lend or borrow loan.
In this, the lender gets paid with interest using its native coin and borrower can use that money to trade or buy any asset.

Its native coin is COMP
Each time, a person locked it's money into this, COMP coins are generated and deposited into his account. The amount of these coins will be the same amount of your money locked.

https://images.app.goo.gl/9n2KAB7LYYW6T4iL7)

While borrowing the assets, one's collateral has to be above the minimum level so that loan must be repaid.
Once the loan is repaid, the borrower is allowed to unlock its assets.

And the interest paid by borrower and received by lender depends and varies with the demand and supply chain of the crypto coins.

When one convert it's crypto assets into ERC-20, then it could easily be transferred into any other DeFi apps available on ethereum blockchain.
So this unhindered movement is one of the biggest advantage of this DeFi app.

bZx

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This DeFi app was founded in 2017. And similar to other DeFi apps, this is also based on ethereum blockchain.
It also had smart contract which allows to integrate into any available and upcoming exchanges to provides the Decentralized Margin lending and margin Trading.

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This DeFi app is not a trading or exchange app. It is a P2P margin trading and margin lending plateform
Its main focus is on lending rather than exchanging crypto assets.

Uniswap

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So uniswap is a decentralised app on the ethereum blockchain. And it allows it's user to swap instantly between all the coins listed on ERC-20 token.

one of the most important feature of this app is that it's very easy to use and us Fully automated. In this app it eliminates all the features in which one can place order. This means in this app you don't have to ask for bid.

This app with its software instantly swap the coins.
It is a very big currency project. And one of the biggest benefit of this is that it's fully open source.
This means anyone can copy it's code and can create its own exchange for coins.
And as it's decentralised this can't be managed against any user by anyone.

Generally Uniswap is that which is balancing the value of tokens and swapping them , based on how much people want to sell or buy them

Cc
@steemcurator01
@steemcurator02
@yohan2on