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.

Related posts

Read more blog posts and news from our team:

FTX is not the collapse of bitcoin

FTX, a cryptocurrency derivatives exchange, has recently come under scrutiny by some who claim that it is contributing to the collapse of the bitcoin market. However, these claims are unfounded and do not accurately reflect the reality of the situation.

First and foremost, it is important to understand that the value of bitcoin, like any other asset, is determined by supply and demand. The price of bitcoin fluctuates based on the market forces of buyers and sellers, and is not directly influenced by the actions of a single exchange like FTX. In fact, FTX is just one of many exchanges that facilitate the buying and selling of bitcoin, and its impact on the market is relatively small compared to the overall trading volume.

Furthermore, the claim that FTX is contributing to the collapse of the bitcoin market is not supported by any evidence. The value of bitcoin has been on a general downward trend over the past few years, but this trend is not unique to the time period in which FTX has been operating. In fact, the decline in the value of bitcoin began long before FTX was even founded, and can be attributed to a variety of factors such as market saturation, regulatory uncertainty, and competition from other cryptocurrencies.

Additionally, it is important to note that FTX is a regulated exchange that operates in compliance with the laws and regulations of the countries in which it operates. This means that the exchange is subject to strict oversight and is required to follow strict guidelines to protect its customers and ensure the integrity of the market. By operating in a transparent and compliant manner, FTX is actually helping to promote stability and trust in the bitcoin market, not contributing to its collapse.

In conclusion, the claim that FTX is contributing to the collapse of the bitcoin market is unfounded and lacks evidence. The value of bitcoin is determined by market forces, and FTX is just one of many exchanges that facilitate the buying and selling of the cryptocurrency. Furthermore, FTX operates in a transparent and compliant manner, and is actually helping to promote trust and stability in the bitcoin market.

Meet Solana and the most popular projects created on it

Solana is a blockchain network of decentralized nodes that allows the scheduling of smart contracts. This network is programmable, as it uses Proof-of-Stake and Proof-of-History consensus, to order on-chain events.

Solana's development began in 2017 when its creator, Anatoly Yakovenko, started working on a network that would be robust enough to operate as synchronously as if it were a single node.

Solana's native coin (SOL) is one of the most important cryptocurrencies in the ecosystem, behind Bitcoin, Ethereum and major stablecoins such as USDT and BUSD.

Solana uses the Proof of Stake consensus, which replaces the Proof of Work to extend its stability and security within the network, while the Proof of History increases the scalability of its blockchain, keeping its decentralization and security intact, through a history that records the events along the executed activities, thus avoiding the loss of time when performing fast transactions.

How does the Solana network works?

Solana works as a Proof of Stake recognition network independently of the validation through Proof of History, this allows its owners to participate and ensure the operation of the network by staking, with the incentive of receiving more SOL tokens in return.

SOL is mainly used to pay commissions when trading through dapps. However, it also allows fees to be paid when creating dapps, programming smart contracts, in mining NFTs or for performing value transfers on its blockchain.

Solana has a wide gallery of decentralized financial products and services (such as Orca or Solend), cryptocurrency and NFT marketplaces (Magic Eden, Solanart), as well as several blockchain games such as e.g. DeFi Land.

Here we will show you the most important projects in Solana that besides having a solid base have a great community and a team of skilled developers behind them.

Serum: It is a non-custodial decentralized exchange (DEX), which has become popular due to its high transaction speed and low fees.

Recently, the Solana community announced the launch of Vybe DEX, a data-driven trading interface powered by Serum's central limit order book and matching engine, which allows the community to query, index and share data on-chain to create dApps and web analytics3.

Raydium: It is an automated market making mechanism (AMM) and liquidity provider on the Solana blockchain for Serum. It is also the first AMM project within Serum.

Raydium's mission is to attract new and existing projects and protocols to the Solana ecosystem.

Star Atlas: Is a multiplayer navigation blockchain game, which has become one of the most promising games of the year, not only for the gameplay it offers, but for the Unreal Engine 5 and Nanite graphics engine with which it is being developed.

The game seeks to establish a metaverse with an open economy, where players can experience absolute freedom and earn ATLAS tokens by playing.

Star Atlas has strategic and economic elements that will allow players to have a fun experience while earning money.

Solarians: It is a collection of 10,000 totally randomized NFT robots made on the Solana block network. Each Solarian is different from the others, and some of these NFTs have Easter eggs that were specially drawn by the artist.

This is Solana's first on-chain generative NFT project. Another interesting fact is that his team was involved in the creation of Digital Eyes, Solana's first open NFT marketplace.