DeFi Products - Crypto Academy / S4W8- Homework Post for @reminiscence01 | by @benjamin09

Hello guys and welcome to my homework entry to the crypto homework of DeFi Products lectured by Prof @reminiscence01.

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Question 1.

DeFi (Decentralized Finance) refers to the cryptocurrency system that is built to help users carry out their financial activities easily and at low cost, by eliminating any third party involvement. Since DeFi products use the decentralized network system, there is easy access to transactions and this increases the benefits and uses of DeFi products to crypto users. There are no third parties or barriers that can stop a user from carrying out his tasks. Also, with the use of smart contracts on the DeFi products' blockchains, DeFi products have a very high level of security which increases its advantages to its users.

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DeFi products have seen a rise within the past years and it has reached a current market capital of $151 Billion and also, it has as its 24hour trading volume as $8.4 Billion. DeFi products, from the above statistics can be seen as a system of Finance that is growing and with so many benefits, so I can say that DeFi is the future of Finance.
When crypto users use more of DeFi products and crypto currencies for their daily activities because of the numerous benefits, there will also be an increase in the dominance of DeFi products in the Financial market. This will increase the use of DeFi and will be easily adapted by all others in the Financial market.

DeFi products are very essential and beneficial to crypto users. They are considered beneficial because of the following reasons.

- Security.

DeFi uses the decentralized network system that works with blockchain mechanism. Blockchains use the smart contracts system that is very secure and keeps the wallets and assets of crypto users very safe and secure.

- Decentralization.

With the use of decentralization in DeFi products, users have access to their assets and wallets since they are in possession of their private keys. This makes it easy for them to carry out their transactions whenever they want to since they are in control.

- Low cost.

Since with the use of decentralization in DeFi products, there is the elimination of third parties, this also reduces the expenditure that was to be spent on the third parties. This will reduce the cost of using DeFi products.

- Transparency.

With the use of DeFi products there is transparency as all transactions are recorded and saved on the blockchain. All users can access the transactions on the blockchain by using the block explorer of the blockchain. This makes DeFi very transparent to all users without exception.

- Speed.

Using DeFi products will mean carrying out transactions at a very high speed. This is because, using DeFi makes needless third parties which slow down the transaction by approving or verifying. Since there are no third parties, transaction speed is very high making DeFi products very comfortable to use.

- Permission/Approval.

When a user uses DeFi products, he needs not any permission from a third party before the transaction can be carried out. Instead, the automated system of the platform just carries out the transaction for him at once. This is very convenient and fast for users while carrying out their activities.

Question 2.

Discuss any DEX project built on the following network.

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PancakeSwap refers to a decentralized exchange platform that functions on the Binance exchange platform and it is an Automatic Market Maker (AMM). This means that when a transaction is placed on the platform, PancakeSwap will automatically find a match for the order placed and complete the transaction. There is no need for order books or bid/ask system when using PancakeSwap because of the AMM system. With PancakeSwap, users can swap any BEP-20 tokens very easily.
Also, with PancakeSwap, users can gain interests or profits by staking their assets in the liquidity pool. This is known as liquidity mining. The income generated with liquidity mining is gotten from transaction fees on the platform.

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JustSwap refers to the decentralized exchange platform which is used on the Tron blockchain network. With JustwSwap, a user can very easily exchange his TRC-20 tokens for another based on the system price.
Another and very important feature of JustSwap is liquidity mining. Users can take their crypto assets and stake them in the liquidity pool. This makes the users to be liquidity providers. These liquidity providers receive rewards from providing liquidity and these rewards are gained from transaction fees. The transaction fees are accumulated and distributed to the liquidity providers annually.

Question 3.

In the DEX projects mentioned in question 2, give a detailed illustration of how to swap cryptocurrencies by swapping any crypto asset of your choice. Show proof of transaction from block explorer. (Screenshots needed)

In order to swap tokens on the JustSwap platform, I firstly logged in to JustSwap. And my TronLink too, is already logged in on as a Chrome extension of my Windows PC.

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So, I had to select the token which I had to swap to. I searched for USDT since I prefer it.

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Since I had a total of 93TRX, I decided to swap 50TRX for 5USDT.

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I now had to confirm the transaction with my TronLink wallet. This was very easy and fast because my connection speed was very fast. All I had to do was click Sign.

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The transaction was complete and I now have a total of 28TRX and 5USDT. This is because there were transaction fees of 15.5TRX.

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We can see the transaction confirmation in the above screenshot from TronScan.

Conclusion.

DeFi is a decentralized system that is changing the Finance market and it is an easier way of doing things. There are so many benefits of using DeFi and this makes it very comfortable for crypto users. Cryptocurrencies also increase the popularity and dominance of DeFi in the Finance market.

Thank you for reading.

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CC: @reminiscence01