Hello all fellows of the Steemit Crypto Academy. Hopefully all of you will be good and enjoying your health and time. This is my home work submission post for dear sir @gbenga from Nigeria . I have read the whole post of the professor and I have cleared all the concepts and basics about the Defi Ecosystem which I did not know before. So thanks dear sir for teaching us and increasing our knowledge about the Defi ecosystem. So, without any wastage of time let's move towards our today's task.

Defi(Decentralized Finance)

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What is Defi?

Defi is the most popular and the trending and short version of the term Decentralized Finance.As the term shows its meaning my its name but to better understand what decentralized finance is we will compare it with Centralized Finance(Cefi). So the word finance and these concepts simply reffers to the financial industry at large. While Decentralized and Centralized describe the nature of its foundation and how its works. Currently the entire traditional financial industry is centralized . So centralized finance is just how financial systems work now and had been working in the past few decades.And as we can all see especially in the recent times the centralized finance foundation is severely outdated and highly manipulating making it wrought with costly fees, ineffeciencies and deception, fraud, corruption and many more evil like them.

So with the good luck and with our efforts to leaps and bounds we have made in the technological ground this past decade have allowed for the development and emergance of new decentralized finance foundation. The word Defi is also used equally to describe the movement towards a less costly, fast ,efficient and fully transparent global financial ecosystem that operates without any central authority and is highly accessible to everyone all around the world just on their phones,laptops,computers via internet.Well, that we know Defi conversationally and in the media alludes to paradigm shift in the global financial industry.

Defi's Foundation:

As we have learnt quite much about the Defi ecosystem so how can the backbone of a new global financial system fulfil all of the attributes like efficiency , transparency and accessibiliy that have been fully absent from the current system we have known and been subjected to our entire lives .Oxymoron equips will not be our saving grace. Neither will leaving matters in the hands of genuinely , ethical and altruistic people. Instead the new financial era will operate on the very place from which numbers, maths, sciences were derived. Traditionally banks, accountants, bookkeepers and government have managed the financial system . However, in the coming years Defi will allow the whole financial foundation to operate purely from principles of methamatics and all sciences using what's known as blockchain technology and blockchain technology is the cornerstone of the decentralized finance as its make the decentralized aspect of Defi.

Blockchain:
The bet way to understand what blockchain means is to split up the word into two parts i.e, the 'block' and the 'chain'.The list of transaction data becomes the block of data. The block of data is then attached to the previous block of transaction data. So we have new block of data formed by the linkage of two previous blocks . In this way a chain of blocks is formed which is actually we called the word Blockchain. And there are three aspects of blockchain technology which are as follow:

• Decentralization
• Transparency
• Immutability

Defi Ecosystem and Ethereum Project/Protocol in the Ecosystem

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As most of us know that the Bitcoin and Enthereum are both use cases of Blockchain technology with purposes. Bitcoin is simply a digital currency that people can use as a form of payment to send to and from each other or hold as a store of value. While Enthereum is basically programmable blockchain that people can form software on to create valuable products and services. And due to the decentralized property of blockchain technology, the software people can built on Enthereum are called decentralized applications or simply DApps.And the nature and potential of these DApps , inspired the idea or desire of a crusade towards the decentralized finance( Defi) . So let we discuss the working of these DApps in a nutshell.

• Imagine the base layer of Enthereum consists of a vast network of computers called nodes. These nodes are connected to the internet with the software installed on them that runs the Enthereum Blockchain. And the transations data is processed, validated , broadcasted and stored . So as these nodes process and publish transaction data to blockchain, They are rewarded with Ether , which is Ethereum's native currency. Ether operates similarly to Bitcoin that is a digital currency that can be transferred at any place of the world at any time. So, the Ether was actually designed with the intention of fueling the Ethereum network.

• Ether was created as a form of payment to essentially run the Ethereum network. And anyone who wants to built a software application on the Etheruem network has to pay for the computing power and the space required using Ether. The amount of Ether required to process the transaction data is determined by a built-in pricing system known as GAS. Transaction data can contain value in the form of Ether and information in the form of code. And these codes can transmit data and triggle actions in the next layer of the Ethereum network.

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• The developers can write the Smart Contracts . The term smart contract was actually coined back in 1998 by an American Computer Scientist named Nick Zabo , who invented the digital currency called Bit gold ten years before bitcoin was created. Zabo's idea was to basically use computer code to execute the terms of sophisticated contracts in the buying and selling of securities , like options and futures. So smart contracts are lines of code that dictates the term of a contract.

• Smart contrcts are the unique abilities to authorize the transaction and carry out term of contracts within a trusted environment which eliminates the need for a central authority like a government, bank or legal system. So smart contracts make the transaction trackable , transparent and permanent.

• The hardware and the software layers of Entereum combined togather of form Ethereum Virtual Machine(EVM). In computing, the VMS are stimulations of computer network that can be used for many different cases.

The applications layer is where developers can built and launch third-party , decentralized applications or DApps. These applications are decentralized because they operate on Enthereum's decentralized Blockchain-based platform. Some of the most common DApps at the time are:

=> Cryptokitties ( a game)
=> Auger ( Prediction market platform)

There are number of different DApps including games, identity, health, property, and many more.

So these are some basics about the Defi Ecosystem and Project/Protocol in the System.Hopefully all of you will like my this post.

Special mention dear sir @gbenga here to review my post and verify my efforts.

Thanks all for stopping here to read my post.

Cc

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