Introduction to DeFi

What is Defi?

The full name of DeFi is Decentralized Finance, the three major financial sectors that we often come into contact with in our daily lives: banking, securities, and insurance. In addition to insurance, the Defi field has all had more mature projects.

Maker: issuing decentralized stablecoin DAI (similar to the central bank in the Gold-Margin period)

Stablecoins are an integral part of cryptocurrency trading. Several of the most popular stablecoins are currently issued using 1:1 staked dollars. For example, USDT, USDT, BUSD, which are staking to the US dollar. However, because of the centralized operation, USD accounts like USDT are always not transparent enough. This has also been criticized by users.

Unlike DAI, DAI is issued through the over staking of digital currency. For example, staking BTC that the current price is 2U to get 1 DAI. The whole process is carried out through smart contracts. The information is open and transparent, and the DAI has a portfolio of valuable assets for backing. This ensures the value of the stablecoins. This is fundamentally different from the already failed decentralized algorithmic stablecoin UST. After UST was de-anchored, the demand for DAI surged and the price exceeded $1 at that time. All major CEX and DEX have DAI and other stablecoins, and some cryptocurrency trading pairs. DAI is also the most successful decentralized stablecoin at the moment.

As of the date of this posting, the Maker platform has over $8 billion worth of assets staked, ranking first among all Defi projects.

The Maker platform's governance token is MKR. Holding it allows users to vote on the governance of the Maker platform and receive dividends from the development of the Maker platform. Although holding MKR does not directly get the platform dividends, users need to use MKR to pay interest in Maker. and MKR as interest payment will be destroyed to raise MKR price with deflation and indirectly dividends for holders.

AAVE: P2P loaning (microfinance company)

UNI: Spot trading (stock exchange)

DYDX: Derivatives trading (Futures exchange)

LIDO: ETH 2.0 staking solution provider