𝔻𝕖𝔽𝕚 (𝔻𝕖𝕔𝕖𝕟𝕥𝕣𝕒𝕝𝕚𝕫𝕖𝕕 𝔽𝕚𝕟𝕒𝕟𝕔𝕖) is a project that includes decentralized networks without needing third parties.
This platform leverages Ethereum's blockchain and smart contracts.
Decentralized networks means secure, fast and censorship-resistant transactions (they cannot be blocked nor must they be authorized).
Smart Contracts, in addition to entering new tokens, allow the automatic execution of loans between individuals in a secure way.
The choice of the DeFi blockchain fell on Ethereum because it is a decentralized network that offers the possibility of using smart contracts. Furthermore, it is possible to issue new tokens easily through ERC20 format (investment is made through "Initial Coin Offer", obtaining the newly created token in exchange).
To find out how many capitalization dollars have been blocked as a smart contract, we rely on DefiPulse.
In Dominance we can read the dominant token of blocked funds (usually MakerDAO)
A very important DeFi project are DAO (organization whose executive power is provided by smart contracts, whose rules are encoded in the blockchain) and stablecoin (🅓🅐🅘).
Stablecoin is not a volatile coin (unlike Bitcoin, Ethereum, Monero, Dash, etc).
Some interesting projects:
✅ Dharma (wallet with cryptographic key saved directly on the device and not in the cloud; this guarantees full control of your funds)
✅ Compound (here you can deposit amounts by receiving an active interest and from which you can get loans by paying a passive interest)
✅ Dydx (similar to Compound but here the smart contract relies on a liquidity pool)
✅ Fulcrum (platform that allows loans and margin trading allowing trustless and permissionless operations, without commissions)
✅ BlockFi (it is an operator that provides a deposit account for coins; the Trading and Crypto Loans functions are interesting)
✅ Uniswap (decentralized exchange that works on the Ethereum blockchain and that allows you to exchange ERC20 tokens)
✅ Betoken (decentralized edge fund always built on the Ethereum blockchain and investing in ERC20)
DeFi is mainly dominated by a single service, M̳a̳k̳e̳r̳D̳A̳O̳, which manages ETH and supports the DAI stablecoin.
Why is MakerDAO interesting? We could block in a smart contract for example $ 1500 Ether which would go as a "guarantee" for a loan in a decentralized structure (MakerDAO). It produces DAI in exchange for our blocked $ 1500 (Ether).
For every $ 1.5 we will get 1 DAI (so with $ 1500 stuck, we will get $ 1000 in DAI. I can borrow 2/3 of the collateral. The 150% rule has been put in to cover any insolvency).
We could use these DAIs to make payments.
But why not use Ethereum directly? Well because being a volatile coin maybe I want to keep it and not use it hoping it will grow in the future.
To get my $ 1500 stuck back in Ethereum, I have to hedge this debt position by buying $ 1000 DAI (loaned). Thanks to this I didn't spend a volatile asset but I relied on a stablecoin.
