Defi is a means of managing and growing your money. Virtually anything you can do with a digital bank or credit card can be done in Defi. Instead of fiat currency (i.e. the money that’s stored in your bank), Defi uses stablecoins, usually pegged to the US dollar or to a national currency such as… Continue reading What can you do with Defi?
Month: September 2022
What does Defi look like?
Defi is a subset of the cryptocurrency industry. Most of the underlying technology that powers the crypto-economy can be called decentralised, since that’s a basic characteristic that all blockchains share. The difference with Defi is that it’s focused specifically on utilising this ability to actively manage your wealth, without requiring the permission of anyone, be… Continue reading What does Defi look like?
Earning from DEFI
What you’ll learn What Defi is & what it enables you to do What you need to take advantage of Defi opportunities The language & key terms associated with Defi The risks of interacting with Defi protocols Decentralised finance, or Defi, is a system for providing open access to financial services. This is achieved by… Continue reading Earning from DEFI
How Flash Loan Attacks Work
One of the weaknesses of the current DEFI model is the difficulty of applications built on Smart Contracts getting data from the outside world, most importantly price data. Any application that offers token swaps, for example, needs to know the current exchange rate, so will reference an Oracle, a service that feeds this data, via API,… Continue reading How Flash Loan Attacks Work
The Good & Bad of Flash Loans
There are legitimate reasons why someone would want to utilise a Flash Loan, which would benefit them and the wider DEFI ecosystem. Here’s an example from Aave’s website where a Flash Loan enables the swapping of collateral for a MakerDAO Vault: In this case, the user holds a collateralised ETH position with MakerDAO but wants to swap… Continue reading The Good & Bad of Flash Loans
Developers are the new Masters of Universe
Flash Loans have emerged as the existing approaches within TradFi have blended with the technical realities of DEFI. Decentralised Finance has grown so fast because of the composable nature of the Ethereum ecosystem, within which it exists. Composability is the ability of different components to seamlessly integrate; DEFI is often described as financial lego. Applications… Continue reading Developers are the new Masters of Universe
Time is Money
Michael Lewis is one of the greatest financial journalists of the last 30 years, most celebrated for his book ‘The Big Short’ about the build-up to the 2008 financial crisis, later made into a film with Brad Pitt and Christian Bale. He followed up on that success with another equally important book in 2014, Flash… Continue reading Time is Money
What is a flash loan?
A flash loan is a way to borrow crypto funds from a lending pool without the need for collateral, provided the liquidity is returned before the underlying chain confirms transactions in the next block. Flash Loans are therefore a form of unsecured loan used to fund complex chains of instant, programmed trades exploiting arbitrage within… Continue reading What is a flash loan?
Popular DEXs for Liquidity Providers
There are a great many DEXs that utilise the AMM type protocol to create liquidity pools, which you can become a liquidity provider for. Here is a sample list of some DEXs and a brief explanation of their unique features. 1. Uniswap Uniswap is one of the oldest DEXs around, and one of the first… Continue reading Popular DEXs for Liquidity Providers
How LP tokens work
So if you were to contribute liquidity (in the shape of assets) to liquidity pools on these DEXs, you would be issued LP tokens. These tokens track your individual contributions to the overall liquidity pool and correspond in direct proportion to your share of liquidity in the overall pool. The value of 1 LP token… Continue reading How LP tokens work