What is Decentralized Finance and how to use it?
Decentralized finance better known as DeFis, are a set of blockchain-based applications that do not need intermediaries to function. This allows transactions to be transparent and verifiable without the need for centralized custodians
Transactions through decentralized finance are carried out through smart contracts, which are computer programs that work through blockchain technology, executing automatically once both parties comply with the requirements established in the contract.
These financial systems use blockchain to store and transfer assets digitally, ensuring the fulfillment of contracts. Access to DeFis platforms has no borders, so they can be used without inconveniences from anywhere in the world giving its users greater control over their money.
Here we will explain the most outstanding DeFis platforms and projects in the crypto industry.
MakerDAO (DAI): This project is one of the most important in the crypto ecosystem, since in addition to running on the Ethereum network, it belongs to the group of stablecoins, whose value is linked to a single fiat asset.
Its main objective is to keep its value as close as possible to the US dollar through an automated system of smart contracts running on the Ethereum blockchain.
Augur: This is a decentralized and open source platform, based on Ethereum's blockchain technology, whose objective is to predict the future of certain markets, events, companies, among other financial instruments.
Compound: This is a project that runs on Ethereum and focuses on allowing borrowers to request loans and lenders to grant them by locking their assets into the protocol through lending options, yield farming, liquidity mining.
Kyber: Is a decentralized exchange (DEX) for the exchange of tokens. It also has other functionalities that make it very interesting within the ecosystem, allowing the exchange in applications with cross-chain operations.
Curve: Is a decentralized exchange (DEX) with a liquidity pool that allows trading stablecoins quickly and easily.
SushiSwap: Like Curve, it is a DEX that allows cryptocurrency operations and exchanges through an automated market, or Automated Market Maker (AMM).
This DEX has been one of the most used since its creation, since despite having been created as a simple project, its community expanded so much that now it has many developers who keep updating it constantly.
Alpha Homora: This is the first and only DeFi project that offers the possibility of entering yield farming and liquidity providing in a leveraged way, so it can be the best for experienced traders.
How do DeFIs work in the crypto world?
Once you choose the best platform that suits your tastes, you can make use of the following tools to get the most out of your cryptocurrencies quickly and easily without the need of third parties.
Trading: Through DefI you will be able to buy and sell cryptocurrencies without the need to operate in centralized exchanges where your money is in the hands of other institutions.
Loan application: This is one of the tools that made DeFi famous, due to the unbankability that exists in many countries, and the obstacles that banks put when applying for credit.
Through DeFis you can obtain loans instantly, avoiding the paperwork and delays of traditional banking.
Staking: It consists of lending your cryptocurrencies to earn interest and rewards every minute. Unlike banks, through DeFis you can get great returns.
Saving for the future: The option of saving through DeFis is a bit risky, however, if you are determined to float your cryptocurrencies, this may be the best option as well as staking to get more out of your cryptocurrencies through interest.9/1/2022