High DeFi-nition Cryptos
The term DeFi or Decentralized Finance is the name that is defining the great trend that is taking place around blockchain technology in recent times. They are considered to be the evolution of the well-known FinTech that were born in the twentieth century. Its objective is to offer a whole series of “traditional” financial services built on a decentralized infrastructure that allows user interaction with the platform directly, without the need for intermediaries.
The goal that DeFi wants to reach is for anyone to create transparent, fair, and efficient financial products, making banks, big financiers, lenders, and even insurance companies completely unnecessary so that anyone can interact with those products freely.
The operation of DeFi in this way is possible thanks to blockchain technology and a tool that derived from it, so-called Smart Contracts. The Smart Contract concept was created visionary in 1994 by Nick Szabo, who conceptualized them as an autonomous program capable of executing a series of instructions or agreement clauses, only if a number of established instructions had indeed been complied with. It was the equivalent of a legal contract but brought into the computer world and enhanced with the ability to be autonomous and completely anti-cheating.
Also, and from this, dApps or Decentralized Applications were born, which are also programs that were run directly on a blockchain and with which we can interact using tokens and a browser. A second breakthrough that eventually consolidated the foundations for the construction of DeFi.
Today there are already many types of DeFi services, such as decentralized exchanges, payment networks, key infrastructure development, investment engines, stablecoins, and more. Certainly, the decentralized financial ecosystem is proliferating and in clear growth.
But in practice, how would a DeFi service be illustrated? For example, if someone needs to get a credit to start a new venture, instead of going to a bank, they can go to a DeFi platform and apply for a loan by placing their cryptos as collateral. Such a loan would have fairly clear and transparent conditions, thanks to the loan being controlled by a public and unalterable Smart Contract.
Currently, there are a wide variety of active DeFi platforms with their pros and cons, running mainly on the Ethereum blockchain, which stands as the most important blockchain for the DeFi movement.
The following is a minimal list of some of the DeFi apps we can find. Naming them all would be a giant task because of the diversity of tools that exist today. But the aforementioned ones have earned a place of honor due to their seriousness, commitment, and active development and for being indicative of the diversity of types of platforms:
Uniswap: Unisawp protocol automates the exchange of Ethereum tokens. Its key features include a formalized model, an open-source front-end interface, and a free platform to use.
0x: 0x offers a decentralized infrastructure that offers peer-to-peer digital asset exchange.
SALT: SALT is another popular lending platform that provides comprehensive coverage, collateral portfolios, loan health, and more. Also, it offers loans backed by XRP, Dash, Dogecoin, Bitcoin Cash, Pax Gold, Crypto, Ether, and Bitcoin.
MetaMask: MetaMask is a popular Ethereum wallet that runs in the browser. It is a browser extension that can connect to the Ethereum network and dApps running in the browser.
Divi: Divi by Divi Project focuses on building the world’s easiest-to-use ecosystem that takes a multi-currency approach, mixing DIVI, other cryptocurrencies, and fiduciary currency into a single platform. It aims to make DIVI easy to obtain and use on a variety of other platforms, such as wrapped versions of DIVI in other blockchains, inclusion in other portfolios, and as many access ramps and applications as possible. It also aims in the long term to bring near-zero rates by sending, exchanging, or storing cryptocurrencies. It also owns its fintech (Ridivi), the company is on track to achieve its goal of driving the scarcity of its currency by putting easy access to cryptography in the hands of everyone in the world with a cell phone. Currently, they are creating a variety of use cases, such as games, a digital nomadic space, media/entertainment, commercial solutions, and DeFi apps, as it leads the way to the next era of mass adoption of cryptocurrencies.
Airswap: Airswap offers peer-to-peer trading on the Ethereum network. Plus, it’s easy to use with key features like no fees, no deposits, no registrations, safe, intuitive, and liquid.
It can definitely be said that DeFi is increasingly becoming an important player in the blockchain ecosystem. Beyond activities like HODL or staking, DeFi allows cryptocurrency users to create new ways to produce money and increase their investments. Are you ready for this revolution?