4/3/2023 0 Comments Defi coins![]() Now, though, it’s worth taking a look at some of the most popular DeFi project types, so you could have a general idea of what to expect from within the space. These are but a couple of examples of what a DeFi project can look like. In the above-located chapter in this “ What is DeFi Crypto?” guide, I’ve mentioned a few different concepts, such as NFTs, lending platforms, and so on. Thanks to smart contracts, you are able to use a DeFi application that’s completely trustless, and does not have any third-party interference - whether it be lending, gambling, or anything related to NFTs, you’re able to use the dApp and rest assured that there’s no foul play involved ( if the dApps is actually legitimate, of course!). The main feature that makes these contracts appealing, though, is the fact that they are practically impossible to be breached - once a contract is submitted to the blockchain, there’s no turning back, and no way to reverse it or change its settings. This is, evidently, a very primitive way of looking at it, but the core concept is just that. This is the core tool behind anything related to DeFi.Ī smart contract is an agreement that has been coded into the blockchain. There are multiple reasons for why that’s the case, but the main one is that Ethereum was the launchpad of smart contracts. Still, though - Ethereum remains the undisputed leader. Currently, there are also other blockchains that are viable for such endeavors, too - while learning what is DeFi, you might encounter projects built on Polygon, EOS, or TRON. The vast majority of DeFi projects that you’ll see on the market are built on Ethereum. There are many reasons for why Ethereum is as popular as it is - the fact that it’s the primary blockchain for all things DeFi is one of them. More specifically, it’s constantly competing with Bitcoin for being the largest crypto project, in general - some enthusiasts believe that it’s only a matter of time until the former surpasses the latter. Ethereum - The Leader in the DeFi SpaceĮthereum is one of the largest cryptocurrencies on the market. This is actually where Ethereum comes into play, as well. ![]() This is thanks to the innate features of blockchain technology - specifically, the fact that information that’s submitted to the blockchain cannot be altered or tampered with in any way. Now, with a decentralized application ( dApp), you would cast your vote in the same manner, but it would be a) recorded instantly, and b) impossible to forge. Situations like these lead people to research what is DeFi crypto, in the first place. These votes would then be transported to a set facility, where they would be counted, before the results would be announced.ĭo you see the problem here? If not, think about it this way - count all of the different instances where foul play could happen, and where someone could tamper with the votes. ![]() Traditionally, you’d do it the old-fashioned way - go to a voting booth, write your vote on a piece of paper, and place it in a collection box. You need to go out and cast your vote on one of the candidates. ![]() Imagine that there’s an election happening in your country. Let me give you an example so that you’d know what I’m talking about: In regards to finance, that middleman can be anything or anyone - a bank, an individual acting as an escrow, a developer who’s written code for the dApp ( more on those later) that you’re using, and so on.įollowing that train of thought, the main benefit of DeFi is the fact that it allows for trustless financial processes to take place within its ecosystem. Yes, there are exceptions, but for the sake of keeping things simple and confusion-free, let’s paint some things with a broad brush.īeing decentralized means that the blockchain is able to function without a middleman. This decentralization doesn’t just come out of anywhere, though - instead, DeFi is closely related to cryptocurrencies, or rather, the blockchain technology behind crypto.īlockchains are, primarily, decentralized. ![]() As the term might imply, it’s a sort of umbrella for a whole huge financial infrastructure that places an emphasis on decentralization. The acronym “ DeFi” stands for decentralized finance. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |