Welcome to the world of decentralized finance! In this exciting and innovative realm, DeFi, short for Decentralized Finance, has emerged as one of the most captivating areas of activity in the world of digital assets. This article serves as a brief guide for beginners, exploring what DeFi is, its various types, and how to dive into this fascinating world. Join us as we delve into a new realm of decentralized finance and its possibilities!
What Is Decentralized Finance (DeFi)?
Decentralized Finance (DeFi) is a financial system where traditional financial services like borrowing, lending, and trading happen directly between users on decentralized networks, without the need for intermediaries like banks or brokers.
The categorization of the DEFI field is as follows:
Bridge: Platforms facilitating interoperability between different blockchain networks, such as Axelar and Chainlink .
[ccpw id=”303″]Liquid Staking(LST): Solutions enabling users to stake their assets while still maintaining liquidity, like Lido and Rocket Pool .
[ccpw id=”305″]Dexes (Decentralized Exchanges): Decentralized exchanges enabling trading of digital assets, like Uniswap and SushiSwap .
[ccpw id=”306″]Lending: Platforms allowing users to lend their assets to other individuals, such as Compound and Aave .
[ccpw id=”307″]CDP (Collateralized Debt Positions): Debt positions created using digital assets as collateral, like MakerDAO .
[ccpw id=”308″]Yield Aggregator: Platforms optimizing and maximizing returns from various staking and lending opportunities, like Yearn Finance and Beefy.
[ccpw id=”310″]Services: Various services related to DEFI including payments, asset transfers, etc., like Summer.fi and Instadapp .
Oracle: Decentralized data feeds providing external information to smart contracts, enabling decentralized finance protocols to react to real-world events, like Chainlink and Pyth .
[ccpw id=”311″]RWA (Real World Assets): Tokenized representations of real-world assets like currencies, commodities, and securities on the blockchain, such as tokenized gold and real estate. like Maker RWA and Ondo Finance
Derivatives: Financial contracts whose value is derived from the performance of an underlying asset, such as futures and options contracts, traded on platforms like GMX and dYdX .
[ccpw id=”312″]Launchpad: Platforms facilitating the launch of new decentralized finance projects and token sales, such as PinkSale and Team Finance .
Cross Chain: Platforms and tools facilitating asset and data transfer between different blockchain networks, like Stargate and Synapse .
Payments: DEFI solutions focused on facilitating peer-to-peer and merchant transactions using digital assets, like Lightning Network and Flexa.
[ccpw id=”313″]Synthetics: Artificial assets whose value is pegged to other assets, such as Synthetix.
[ccpw id=”314″]Liquidity manager: Tools and protocols optimizing liquidity provision strategies for decentralized exchanges and automated market makers, such as LCM Finance
