![]() ![]() ![]() DeFi coins are built on and often named for their unique, native blockchain networks. And while they are quite similar, there are a few key differences that do matter.Ī DeFi coin is much like a digital version of a fiat coin - it transfers value in the course of a financial transaction. In the crypto world, DeFi coins and tokens are often referred to interchangeably. It’s important to keep in mind that, right now, DeFi is largely unregulated and not insured by the FDIC the way traditional banks are, so investors are advised to do their research and may only want to contribute assets they can afford to lose. Ether is Ethereum’s native cryptocurrency, and just like Bitcoin it can be purchase on a crypto exchange or mined (for now). Instead of just a currency, Ethereum is a global, decentralized technology network - which means it’s not owned or controlled by a central entity - that powers protocols and applications that use smart contracts. Right now, most DeFi protocols and apps are built on Ethereum.Įthereum is an expansion of the technology and concept behind Bitcoin. While there are of course risks associated with such a new and groundbreaking concept, DeFi shows a lot of promise as the basis for a financial future that’s more efficient, flexible, transparent, and most importantly equitable. Much the way cryptocurrency was created as an alternative to fiat money, DeFi was created to provide alternatives to common financial services.įor example, DeFi decentralizes lending so that people who don’t have access to or have been disenfranchised by traditional banks still have a trustworthy outlet from which they can get a loan. The non-custodial element of DeFi means that the individual maintains control over their DeFi coins and/or tokens, which is in stark contrast to the way traditional banks and even cryptocurrency loan programs take control of your assets whenever you need to use them to complete a transaction. Their functionality enables trackable but irreversible transactions to take place between anonymous parties.ĭeFi applications aim to disrupt the financial industry as we know it by making it decentralized and non-custodial.ĭecentralization happens when the developers who create a protocol or app hand over ownership of the smart contracts to their users, turning them into community-controlled assets. Smart contracts are self-executing, digital, code-based contracts that contain the terms of an agreement. Take it From the Top: What Is DeFi?ĭeFi stands for “decentralized finance” and it’s a subset within the larger cryptocurrency space.ĭeFi is used to describe a class of financial products - such as apps and “protocols” which are basically autonomous computer programs - that are built on blockchain and governed by smart contracts. Glasses on - it’s time for some learnin’. This guide will take you from the background of DeFi to how you can get involved with it to the one tool that can help you keep track of it right alongside the rest of your portfolio. Whether you’re wholly new to the world of crypto or you’re a decently experienced investor, there’s a lot to learn when it comes to the hot new digital asset everyone is talking about - DeFi. ![]()
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |