Steemit Crypto Academy || Season 4 Week 8 - Beginner's Course || DeFi Products || homework post for prof @reminiscence01 | Repost
In your own words, explain DeFi products and how it is shaping the present-day finance.
Decentralized finance product are financial tools that helps it the area of finance by using the blockchain to take things that you would normally do in the centralized finance world and put them internet in the in a decentralized way. Is 100% transparent because transparency does not exist in the traditional financial world.
The terms DeFi sounds stands for decentralized finance. If we look at traditional finance, it's completely centralized. We have a bank that sets the rules for how you interact with the bank and we have human beings that act as intermediaries with that bank. So, a good illustration, if you want to go get a valuable thing you have to go to the bank, you will be ask to fill out some document. Then, they have to make sure that you have the money that you say you have. There's a lot of friction and there's a lot of cost.
It's all done automatically. So, instead of having to have a loan officer, a risk officer, an insurance person, a physical building and all these things that create all these costs, you can have a piece of software that handles that all automatically and the only way that can work is if those assets are on a blockchain.
Explain the benefits of DeFi products to crypto users.
The benefits of DeFi product can not be underestimated because it's allow the rest of the world to get access to banking and products that they couldn't do before and it's also take traditional banking products like exchanges, derivatives, margin trading, insurance, and trusted third parties and move that into a decentralized role. DeFi product take centralized financial functions and moving them to a blockchain.
For instance, you have countries that issue currencies and they can issue as many currencies as they want. They're not backed by anything but there are other decentralized finance applications that can issue algorithmically based stable coins and these stable coins are actually backed by assets. There's nobody there that we have to trust and rely on to manipulate it. It's all on the blockchain and blockchains are 100 transparent.
This has allowed certain protocols to actually issue collateral backed money that nobody can mess around with.
Another decentralized finance products benefit is in the area of exchange. I mean we have it so ingrained in our mind that in order to buy or sell anything, we've got to deal with a physical exchange, and going to an exchange platform to buy and sell our crypto. One area of DeFi that has just been exploding are decentralized exchanges and these are exchanges where no human being manages them.
Discuss any DEX project built on the following network.
Binance Smart Chain
Tron Blockchain
Pancake swap allows us to swap tokens and passive income by providing liquidity and even stake coins to earn rewards. It's becoming ever more popular because of the fast transaction times and very competitive fees on binance smart chain which are way under a dollar.
Their users have access to lottery's, digital collectibles in the form of non-fungible tokens, trading tournaments and even launch pads for ambitious developer teams.
Firstly, we can come to pancake swap by going to pancakeswap.finance That's the official web page but we can actually come down to the info. We can click on info and then you can get an overview of all of the tokens and pools within pancake swap.
You can see the liquidity on the platform. The trading volume over the last period and last few days and months and then the liquidity on the platform as well.
If we just come back to the pancakeswap.finance. We will go through the three main areas on pancake swap one is swapping tokens one is yield farming. There are a couple of other options as well including lottery.
You can see farms. You can earn an APR. You can yield farm. You can also stake coins in pools and then you can earn a return on that as well. There is a lottery which is simply just a lottery where you go and buy some tickets and potentially earn some rewards
Just swap is a decentralized exchange built on the tron network. Like any decentralized exchange out there, it needs liquidity. It for those that want to become liquidity providers and provide that liquidity so that way there's tokens and cryptocurrencies to be able to be swapped. Users are going to be able to earn the exchange fees.
Just swap is built on the tron network. You're going need a cold wallet that is built for the tron network that has dap function. In other words, it has a browser so that you can access this website.
We will need tron link and have some tron on it so you can activate that wallet and now that you have some tron you can start swapping with it.
When you actually land on the page justswap.io. You're going to see swap. When you see swap, this is where you can actually swap your TRX for other cryptocurrencies. For example, let's say you have tron and you want to swap it for SUN or for USDC. which is a stable coin. If you have a little bit of tron and it will convert based on the current value.
The interesting thing about decentralized exchanges is that it isn't centralized meaning the community is providing the liquidity. On the platform you can provide liquidity into the pool.
There's many different liquidity pools that you can provide. You have to provide in a set of in a pair and the reason why you have to provide in a pair is because you always have to have an equal balance. for example let's say that the market fluctuates. let's say tron value goes down and when tron value goes down, the other pair will buy up to make it balanced out. Providing liquidity means you have to do it in a pair and it has to be an equal amount. So, if you provide a thousand dollars worth of tron and then you're doing USDC, you have to have a thousand dollars of USDC available as well.
In the DEX projects mentioned in question 3, give a detailed illustration of how to swap cryptocurrencies by swapping any crypto asset of your choice. Show proof of transaction from block explorer. (Screenshots needed)
DeFi products have help a lot in solving some problems. It's how companies can all of a sudden throw up these multi-billion dollar losses that shareholders never had any idea of. That can't happen in the decentralized finance world because everything is open. Everything is transparent because, every transaction on a blockchain can be viewed by anybody in the world. It is truly a transformational trend that i believe will remake the world in ways that we are just beginning to understand.
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