Everything You EVER Needed to Know About Defi

in LeoFinance2 months ago

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Everything you EVER needed to know about De-Fi, is that it will never be possible to know everything there is to know about De-Fi.

De-Fi is simply Decentralized Finance, a Financial System that has no center.

Defi started as bitcoin, a store of value.

Someone saw bitcoin and thought: "I can improve on that." and Alt-Coins were born.

Fiat = Centralized

Bitcoin (and alts) = Not Centralized

Defi grew and grew. STEEM, Dapps (Decentralized Apps), Hive, and Blurt. Systems with no center.

Then someone saw that and thought: "There is more to finance than storing value."

Finance is more than currency. FInance is car loans, and mortgages, student loans, insurance, margin trading.

And that is what the De-Fi Craze is.

A layer of depth being added to our crypto values. Before, we could hold our coins, and wait for the value to raise. Now, we can take our coins, and invest them, and earn interest on them. Now we can take our coins and use them as collateral to get loans in fiat.

Margin trading is cool. But, what about lending someone "liquidity" so that they can do their margin trading and pay you an interest as a thank you for letting them use your cryptos?

And what about making that work through smart contracts and networks.

Many of the De-Fi products are being built through the ethereum network, the way their programming and ability to build contracts on the network lends itself to the way defi is growing right now. But remember that ALL projects on decentralized networks are "defi".

The reason you will never understand everything about defi, is because defi is still being built.

Of course, you will come to understand specific projects and how they work, but, as soon as you learn one, three new ones will pop out. Just like you will never have time to watch all the youtube videos that exist, you will never have time to learn about every single De-Fi Project that exists.

There are an infinite amount of nooks and crannies to fit.

When investing in DeFi, remember

  • Not your keys, not your money. DeFi is crypto. Is you let someone play with your money, they possibility that they will run away with your money is there. Smart contracts are only as smart as the people who built them, and sometimes smarter people dedicate their time to taking advantage of a contract.

  • Sometimes "defi" is centralized. I consider @spinvest a decentralized project. We invest in different types of decentralized currencies, so what else could we be? Except that ultimately, the keys to the wealth of the club are in the hands of a few people, and while we do get more and more decentralized everyday... the project itself is centralized.

  • It is ok to invest now and understand later If I had started investing in Bitcoin when I started being curious, instead of waiting until I understood how blockchains worked my house would be bigger. Trying things out and seeing how they go is ok as long as you don't invest more than you are able to lose.

Ready to sink your teeth into some projects?

Big Huge list of De-Fi Projects created by someone outside of the Hive Network.

And Remember, We have the Hive-Engine

Leo is wrapping soon. @aggroed said something about building on the Engine soon. @Hivehustlers were on discord the other day, saying something or other too (which facet of defi will they further things into?)

There are lots of opportunities, because crypto is at its infancy, and depth is barely being built.

What portion of De-Fi is calling to you? I have to be honest here, I am not liking the idea of investing in lending or borrowing...

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DeFi is a hot topic right now. ;)

Yes. I was confused because the buzz made me feel that it was something "new."

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I've been considering entering defi for SPinvest but im not sure it fits the business model. We are going 5 ETH into providing wLEO liquidation, about 4% of the fund total so i guess we are involved, lol.

Im personally doing defi on TRON and it's working out pretty good. I did a little crazy farming early on but I've given that up for less risky staking platforms.

High risk investments for high yields definitely are not "get rich slow" material. However, we have been making some great gains lately so setting aside some reserves for "gamble investments" sounds like a fine idea.

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Best explanation I've read so far ;-) It actually helped me feel less 'Blonde' after all.

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Well thank you! Glad my article was able to help.

Great article! Thank you for the explanation s!

You are welcome, thank you for your comment :)