The blockchain/crypto space has always had money at its core and making money, transacting in money, and everything that goes along with that has been an early use case and for most people, the driving use case for this technology.
DeFi, also called Decentralized Finance, leverages open source software and decentralized networks to transform traditional financial products into trustless and transparent protocols that operate without unnecessary intermediaries. One could envision decentralized finance impacting the financial world the same way that open source software has changed software products. (https://www.block123.com/en/feature/awesome-ethereum-defi-decentralized-finance-list)
In DeFi Projects – DeFi Alternative Savings Apps are aiming to improve and simplify onboarding experience for third-party DeFi lending protocols. They are introducing DeFi savings products to non-crypto native users and act as an alternative interface for lending protocols. (https://defiprime.com/alternative-savings)
Every day, open finance products — known collectively as DeFi — gain more traction. One of the most popular DeFi services is “savings account alternatives”. The main differences are that DeFi enabled products deliver high interest rates, have no lockup periods, and make a middleman, who takes its cut, unneeded. (https://medium.com/@lukaskai/how-defi-savings-account-alternatives-work-c3972f38b6cb)
Analytics is the discovery, interpretation, and communication of meaningful patterns in DeFi protocols data; and the process of applying those patterns towards effective decision making. (https://defiprime.com/defi-analytics)
Asset Management Tools
In the traditional financial system custodian, it is a specialized institution responsible for safeguarding a firm’s or individual’s financial assets and is not engaged in commercial or consumer/retail banking. In DeFi you and only you are a custodian of your own funds and assets. We collected the best DeFi friendly wallets, apps, and dashboards for managing your cryptocurrencies and assets. (https://defiprime.com/assets-management-tools)
Decentralized Autonomous Organization
The Backbone of Ethereum’s DeFi Movement
The Ethereum ecosystem’s buzzing with energy from the rapid growth of decentralized finance or DeFi. But, did you know that behind many of the popular products and services built on Ethereum stands a DAO? That’s right. The vast majority of protocols in the $473M DeFi market either are run by one, plan to implement one, or are built on a protocol already run by a DAO. (https://ethgasstation.info/blog/what-is-a-dao-ethereum-defi/)
What is a DAO?
A DAO is a decentralized autonomous organization. Once launched as a smart contract on the Ethereum blockchain, a DAO operates according to its programming. These organizations run without a central operating authority, all the rules of the organization are enforced by its code running on the blockchain. Furthermore, DAOs often manage their own treasury and issue their own tokens. These tokens represent membership, voting rights, and/or ownership of the DAO. In the Ethereum ecosystem, DAOs fill similar roles to traditional organizations you are familiar with like corporations, cooperatives, non-profits, etc.
Decentralized Exchanges – DEX
A decentralized exchange (DEX) is a cryptocurrency exchange which operates in a decentralized way, without a central authority. (https://defiprime.com/exchanges)
How DEX works?
While the design of decentralized exchanges vary, the underlying concept entails connecting a buyer with a seller across a global liquidity pool. The difference with DEXs is that rather than liquidity and orders being aggregated by a centralized entity, capital is collected via a smart contract and routed relative to the best price using an oracle.
List of DEX
In traditional finance, a derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the “underlying.” (https://defiprime.com/derivatives)
What are Derivatives?
Derivatives are inherently secondary securities as their value is derived from the value of the primary security that they are linked to. In and of itself, traditional derivatives have no value. Example of derivatives commonly include futures contracts, forward contracts, options, swaps and warrants.
Thanks to the advent of smart contracts, tokenized derivatives can be created without the need for a third party. Counterparty agreements are programmatically encoded, drastically reducing the risk for malicious activity. This trend has allowed retail investors to take advantage of opportunities previously restricted to those with brokerage accounts or specialized knowledge. (https://defirate.com/derivatives/)
Infrastructure and Dev Tools
Protocols, frameworks and underlaying technologies for building decentralized finance dApps with DeFi network of money legos (https://defiprime.com/infrastructure)
Insurance is a practice or arrangement by which a company provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium. (https://defiprime.com/insurance)
KYC & Identity
KYC is an abbreviation for Know Your Customer refers to government regulations designed to prevent money laundering, financing terrorism and other crimes involving money. It also refers to the policies, procedures, and technology used by banks and financial services companies to comply with KYC regulations. (https://defiprime.com/decentralized_kyc_identity)
Lending and Borrowing
Decentralized lending platforms provide loans to businesses, or the public with no intermediaries are present. On the other hand, DeFi lending protocols enable everyone to earn interest on supplied stable coins and cryptocurrencies. (https://defiprime.com/decentralized-lending)
DeFi crypto margin trading refers to the practice of using borrowed funds from a broker to trade a financial asset, which forms the collateral for the loan from the broker. Usually broker in DeFi it’s one of autonomous money markets. (https://defiprime.com/margin-trading)
An online marketplace (or online e-commerce marketplace) is a type of e-commerce site where multiple third parties provide products or services. (https://defiprime.com/decentralized_marketplaces)
DeFi payments apps, protocols and solutions focused on creating an open finance ecosystem that caters to the needs of institutions, as well as the underbanked and unbanked populations. (https://defiprime.com/payments)
Stablecoins are cryptocurrencies created to decrease the volatility of the coin’s price, relative to some “stable” asset or basket of assets. A stablecoin can be pegged to currency or exchange-traded commodities (https://defiprime.com/stablecoins)
PoS networks use validators who create, propose, or vote on blocks added to the blockchain. From the customer point of view, Staking is similar to interest savings account in a traditional bank. In DeFi, infrastructure service providers such as staking pools and Staking-as-a-Service providers play the role of the bank, running nodes for decentralized PoS protocols on behalf of investors. (https://defiprime.com/staking)
Tokenization of Assets
- DeFi Tokens – Native tokens which fuel an underlying product or service. The price of these tokens are largely tied to that project’s success.
- Token Flavors – Native tokens which are created by supplying assets to a DeFi protocol. Their price is largely influenced by dynamic rates and length of time held.