Understanding the DeFi Environment - Facing the Robinia Project (Part One)
I understand that new things could be a little complex to understand, but, just because they are difficult at the beginning doesn't mean that we can't understand them, I guess it was a little complicated for you to start in Steemit, however, here you are.
To understand the DeFi Financial System, I would like to define it simply as a platform in which there are no intermediaries, or maybe there are, but in this case it is a Smart Contract, that is, a preconfigured program that will make the participating parties comply with their obligations, otherwise, it will not be executed, thus achieving more transparency and security in the financial processes.
The other interesting thing to take into account in DeFi, is that just like traditional banking, we can keep our money and generate interest for keeping it, the difference is that in DeFi we can withdraw our money immediately, whenever we want, without the intervention of any person, and at any time of the day since it works 24/7, and the other point to highlight is that the interest rates that we earn for keeping our money in the system is really much higher than in any bank in the world.
That said, it is important to consider that there are essentially two ways to generate interest at a great APR in this new financial system, I begin by describing them:
- 1) Freezing or making STAKE of funds in POOL, the simplest process. It is similar to what we do by converting Steem to SteemPower, which by voting will generate us a profit by curation. In this case, keeping Cake in the form of Stake will generate us benefits in the form of Cake, and in the case of Rubinia it will generate us Rubinia Tokens.
You can see in the following image that we have the information we need to know to see the profitability of keeping our funds here. It gives us an APY of 85.31%, not bad to tell the truth.
- 2) Adding liquidity in FARM: this is where people might get a little confused, but it's still very simple, really. I'll explain it in a very easy to visualize way:
To "add liquidity " we must have a token which is actually a pair of tokens together, that is, before making STAKE of this pair in FARM, we must convert them into LP token or join them, (don't confuse me or scare me😁 because it's really very easy). For example, if I am going to Farm with the CAKE-BNB LP pair, I must have both (CAKE and BNB) in equal dollar amounts. That is, if I have 500 dollars that I want to invest, I must simply buy 250 dollars in CAKE and 250 dollars in BNB. (I do this step where it says trade, which is a DEX: decentralized exchange).
Having them, I go to "add liquidity and in one simple step" convert them into CAKE-BNB LP token, then I must go to FARM, and STAKE this pair, and wait for the profits simply.
In this case what it shows is an APR of 37.93%, which is not bad either, much more if we compare it with the laughable interests offered by banks. In reality, we usually have to pay the banks to keep our money "safe".
It is important to note the following:
If we freeze funds in PANQUECASWAP, what we will earn as interest for keeping our funds there will be in that platform's native currency, in this case, Cake. In the case of ROBINIASWAP, what we will earn will be the native token of this platform, which will be ROBINIA TOKEN (RBS).
And the tokens won in Robinia will have an additional utility, which will serve us for a purpose in STEEMIT, they can be exchanged for votes in favor in the platform, something that I think is very good.
I must point out that this is not a financial advice, let this post serve to give those who read it a better idea of what DEFI is, and what Robinia will be when it will be launched next October 1st.
Soon I will be sharing videos of how to perform the processes, I know it will be much easier to visualize it.
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I think as day goes by, this robinia investment projects is sounding good more to my ears. The ability to exchange it to upvotes is what I love most
Greetings friend, thanks for this introduction of a project that is gaining attention and we should not lose track of, I think these DeFi systems will revolutionize finance for its attractive rates, plus the advantage of eliminating intermediaries and have full control over our money, not to mention the possibility of generating more income and in our specific case to generate positive votes, no doubt we must be attentive to this project.
Greetings friend @josevas217, the DeFi platform really offers many economic advantages, and great security to protect our money, the truth is that it is a platform with speed because in minutes we can get back all our money, on the other hand is a way to generate income by leaving our money there, which works with interest on interest, so each time the profits obtained are greater, the robinia project offers all these benefits and many more, we are all waiting for this great project to begin, hopefully its launch will be on the established date.
@tipu curate 5
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