Dive into DeFI - My understanding |Steem Crypto Challenge Month #2 : Diving into DeFI.
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What is Defi?
In fact, DeFi helps creating decentralized financial instruments different from traditional centralized institutions.
What Defi Aims?
Defi(Decentralized Finance), it is an ecosystem of decentralized financial applications (Dapps) that are built on blockchain networks. You can also find a lot of this on the ethererum network, which allows the creation of smart contracts, which can't be broken.
The aim of Defi is to create an open-Source transparent financial service ecosystem that is available to everyone not just for certain individuals but everyone and being operated by users not by authorities.
It allows its users to interact with this ecosystem and manage their assets on their own through peer-to-peer (P2P) and decentralized applications (Dapps).
What is Smart contract ?
A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. Smart contract helps to solve the issue of mistrust between parties and business partners, it reduces unnecessary costs and time expenditure while enhancing transparency
smart contract are basically the lines of code stored on the blockchain network, so they are stored on a public database and cannot be changed.
smart contracts basically allows you to perform transactions without any third parties. This is the best thing about the blockchain, since it's decentralized you don't need to hire or pay to a third party (A middleman) so it saves your time and allows you Perform directly, anywhere anytime.
Transactions in smart contracts are possessed by the blockchain, which means they can be sent automatically without a third party
Defi Tokens I ever bought
I have been In cryptoworld since last 6 months, slowly slowly I learnt about it all and I started Diversifying My portfolio.
Defi I currently hold -
- Chain LINK - My favorite Actually.
- Uniswap
- YFI
- SushiSWAP
- JUST
I'm also mining SUN, with LP of JST/TRX This is when I bought JST for the first time, 1000JST directly from tron link wallet.
I didn't actually bought them with fiat currency, I simply bought them with other crypto although I hold a small amount as I'm still learning about it.
Current DeFI market Capitalization
why Choose Defi not CeFI?
Traditional finance system relies on institutions such as banks to act as intermediaries (Middleman) while Defi based application does not need any third party hence, users have control over their funds.
DeFI remove the chances of failures since financial services are deployed on top of blockchain network.
As DeFi is an open ecosystem, it allows individuals to access their financial records easily.
Decentralized exchanges have lower trading fees in comparison to centralized exchanges.
Above points clearly states that there are various undeniablebenefits of bringing decentralized financial ecosystem
people don't like being controlled by authorities or others users, another reason why people chose Defi over Cefi. They like having control on what's theirs.
Which project do you think is the best DeFi application? WHY?
In the current time there are so many new projects coming up in Defi as the trend of DeFi is growing fastly, I personally like the DAI by MakerDao(MkR) - Stablecoin and Decentralized Reserve Bank
Maker is an Ethereum-based cryptocurrency project responsible for the DAI stablecoin, Dai is a stable coin implemented as an ERC20 token on the Ethereum blockchain,It was designed to maintain 1:1 with United States dollar (USD), it's value is backed by collateral
which is locked up in a smart contract, the Maker collateral vault.
It's said to be the second largest project in Defi space, right Behind LINK
The main advantage is anyone can easily create a new Dai by simply depositing ethererum as collateral.
The exact idea of DAO is that you lock crypto in a smart contract and get a number of stablecoins in return. 1 stablecoin is always worth 1$ in the case DAI. The amount you get is dependent of the value of your crypto.
why i like Defi and why i consider Defi the future of cryptocurrency?
DeFI actually Describes financial products and services which are secured by a decentralized ledger (Blockchain technology)
In my opinion, Defi is the future of cryptocurrency, since it is decentralized which means its not regulated No bank, no government , nobody but you. You don't need to trust anyone to store your crypto. It provides more security to your funds and more control, you can access your funds easily track them whenever you want.
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the concept of stable coin is great i mean those who dont want up downs they can get those stable coins by locking crypto up in a smart contracts Like we have seen in DAO.
Greatly explained the main reason behind people trusting defi is they dont want anyone to control over or we can say intermediaries.
@rishabh99946 i always enjoy my neighbor country's post ... India - Pak ❤️
#twopercent #pakistan
In Defi all codes open to all,so any one use those freely. With out third party interfere we can do lending and Barrow very easily through smart contracts .
You holding good coins,hope those give good earnings for you.
Nice post from you. Have a great day ahead.
#twopercent #india #affable