Let’s learn Defi together! I researched online and with my understanding about Defi. I put all the resources I gathered and made a Defi Guide in Notion page here. I shared my Defi cheat sheet here with you.
I layout questions:
What is Defi?
What are the risks of Defi?
What is Defi?
Defi or Decentralized Finance is a peer-to-peer financial system built on the Ethereum blockchain. It does not need third parties involvement like banks to charge services fees and to transaction your money slowly.
In Defi, it can solve:
- Centralized control: created a single point of failure
- Limited access: to be more inclusive to the unbanked population which estimated was 1.7 billion people in 2017
- Inefficiency: multiple charges on foreign transaction fees and other service fees charged with slow transaction speed
- Lack of interoperability: artificially created barriers to switching services with high-cost fees
- Opacity: with no transparency on banks operations and to cause the financial crisis in 2008
What are the risks of Defi?
There are several risks associated with Defi.
- Smart contract risk: prone to hacking, and lost total of approximately $2.3B of 83 incidents
- Governance risk: induce governance attack through minting exceeded governance tokens from hacking
- Oracle risk: if the cost of corruption is smaller than profit from corruption
- Scaling risk: particularly in Proof of Stake where stakers have more assets than the entire rest of the participants
- DEX risk: vulnerable to sophisticated arbitrage bots
- Custodial risk: lost private and lost control of wallet due to hacking or scams
- Environmental risk: wasted more energy on mining (up to debate)
- Regulation risk: overlapping jurisdictions and regulations to bring Defi under banking regulations
Stay tuned for the next cheatsheet!
Photo by Kelly Sikkema on Unsplash
Note: the post was shared on multiple platforms here.
You can refer my previous article lists here
Digital Commodities- the Unlimited Resources of Commodities Has Born
Universal Income in Crypto Way
DeFi 1.0 is Officially Dead - Welcome to DeFi 2.0
NFT Has a New Purpose
How Many Ads Are Too Much - Floki Inu Ads Got Backfire
Metaverse - Second Life Era
Bitcoin ATM Adoption and Its Potential Security Vulnerabilities
When Corporations Are Running By Everyone
The Fundamental Value Is Irrelevant
Coinbase At Huge Reputation Crisis
CBDCs' Flaw Design
Regulations Start Hitting Crypto Exchanges
From Bitcoin Standard To Zero-Knowledge Proofs - Decentralization 2.0
Shiba Hits 1 Million Users (Army) Milestone: What is Next?
How To Avoid Crypto Scammers
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Twitter CEO Steps Down - A Full-Time Bitcoiner
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Brief History of Ethereum and How Ethereum 2.0 May Over Promise
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Wait, Web3 or Web 3.0 or web3
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2022 Prediction #1: L1 Scalability
2022 Prediction #2: L2 Bridges
2022 Prediction #3: Zero-Knowledge Proofs or ZKPs
2022 Prediction #4: Regulated Defi On-Chain KYC
2022 Prediction #5: Institutional Crypto Adoption
2022 Prediction #6: Defi Insurance
2022 Prediction #7: NFTs-Based Communities - DAO 1.5
2022 Prediction #8: Metaverse and NFTs
2022 Prediction #9: Web2 Companies’ FOMO
2022 Prediction #10: Time for DAO 2.0
Craig vs People
Polygon Enters ZKPs - Plonky2
Crypto.com Backfire - When Centralized Crypto Service Panic
Coinbase NFT Marketplace
Coinbase Customer Service Alive
When Meta Patented Metaverse
When You Want Someone Forget About What You Did, Just Change You Name
When YouTube Enters Into NFTs
Facebook Just Did the Rug Pull
Bridging Between Web2 to Web3 Through NFTs
DAO The Way Part 1
DAO The Way Part 2
Who Is The Winner of The Crypto Adoption
DAO The Way Part 3
What You May Expect NFTs After 6 Months and Beyond
DAO The Way Part 4
Licensed NFT vs. IP Law
Wormhole Hack - It May Not Be a Bad Thing
Preventing Rug Pulls
DAO The Way Part 5
Lessons Learned From Wonderland DAO
DAO The Way Part 6
Disclosure: The article was written by a delusional author who is possibly a nut job without any questions whatsoever about expertise in the subject matters. You should not believe any words this author wrote or you may experience similar symptoms or even possibly become a nut job.