It is with great pleasure to present my week 7 homework being my third crypto academy work since my registration. I have no knowledge about crypto before now but have read through the lectures present by my honorable professors @gbenga & @yohan2on, I have started understanding what crypto is about and have seen the amount of knowledge I have been loosing. Many thanks to the admin of crypto academy and all the professors for their simple and easy to understand lectures.
- Decentralized Finance (DeFi) Ecosystem.
When I saw this homework, 'ecosystem' caught my attention. Community of biological organisms interacting with each other and/in their environment in order to keep living. Going a little further I discovered that the word can be used for a complex network that totally depend on each other to keep thriving. Decentralized Finance (DeFi) is a compound term for a variety of applications and projects in the public blockchain space established toward changing the traditional finance system. It can also be referred to as interconnected financial applications built on blockchain system using smart contracts, -an automated enforceable agreements that do not need any intermediary to execute, which can be accessed by anyone with an internet connection. Most of the applications on DeFi ecosystem today use the Ethereum network, but many other alternative public networks that deliver superior speed, security, and lower costs are coming up. - The Project/Protocol In The Ecosystem.
The Project/Protocol in the Decentralized Finance (DeFi) Ecosystem is made up of working applications that have delivered value to millions of it's users. The amount of assets currently locked in DeFi ecosystems worths billions of dollars, making it one of the fastest-growing segment within the public blockchain platform.
Let me briefly talk about some of the project/protocol in the Ecosystem that are available in the market today:
Stablecoins makes room for stability which is reliable collateral assets that are viable solution to volatility issues surrounding cryptocurrencies and it is helping DeFi gain popularity. It is useful during risk-off moments in the crypto platform, providing a safe ground for investors and traders. Stablecoins are backed by reserve assets, fiat currencies or commodities base on a blockchain and thus enjoy the benefits of privacy and efficiency of blockchain-based transactions. They were created to combat the volatility of cryptocurrencies.
Payment providers in decentralized finance ecosystem allow for the secure and instant transactions for individuals and institutions. Some of the payment providers are:
- xDai Chain
- MoonPay
- whisp
- stablepay
- wyre
- connext etc
Decentralized Finance brought a new direction by enabling lending and borrowing.
Decentralized lending offered crypto holders an opportunity to gain annual yields from borrowers.
Decentralized borrowing allowed individuals the opportunity to borrow money at a specific interest rate. The purpose of this is to render financial services while fulfilling the needs of the cryptocurrency community. Examples of top Decentralized Finance platforms are Compound Finance and Compound Tokens
Prediction markets are exchange-traded markets platforms where individuals can predicts the realization of future events. Decentralized prediction markets can be created on any type of bet, ranging from sports bettings to stock prices and many more. The market prices in this platforms usually indicate what the crowd thinks the probability of the event will be. DeFi opens these markets for private and institution participation. This concept has long been touted as a possibility through smart contracts.
Wallet and Asset management is a nother class of service offered by Decentralized Finance. It is designed to make the entire process of investing faster, less expensive, and more accessible to everyone. Aspects of the Decentralized Finance Ecosystem play very favorably for Asset Management, including: composability and transparency which promises to make information accessible and secure, composable to enjoy hyper-customization of portfolios, and trustlessness. The objective of all this, is to allow access to historically illiquid assets and manage their investment regardless of location.
Decentralized Finance (DeFi) Ecosystem contains varieties of financial applications that are interconnected with each other on the Blockchain system that does not require any intermediary to execute and it is easily accessed by anyone with internet connection. There are many projects/protocols in the ecosystem to maintain its existence and functionality. With DeFi and it's protocol, volatility of cryptocurrency is partly being managed, the process of investing is being made faster and secured, more accessible to many people with less cost.
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Written By: @aizeeck
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Thanks for being a part of my class and for participating in this week's assignment. I hope you learned from the class as the aim of the school is to teach and allow people to learn alongside.
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Thank you sir
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Nice work, i wish u luck in your assignment
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