As from the start of this year, the main focus has been the DeFi (Decentralised Finance) . As months passed demand in DeFi increased dramatically. Currently there are more than 8.51 billion dollars locked in the DeFi protocol as shown in figure.
Coins like yearn.finance (yfll ) etc have shown dramatic growth and have yet shown no correction properly in price.
As you can see in the picture “Aave” is the number 1 DeFi coin at the time of writing this blog. It is a protocol where you can deposit and earn interest on your cryptocurrencies and stable coins and even borrow money by keeping your cryptocurrencies as collateral by opening a “CDP” which is defined as a collateral depth position.
Maker is very similar to Aave or you can say Aave is very similar to Maker. As Maker was the 1st one to introduce this concept in the market of lending and borrowing.
Uniswap on the other hand is “automated market maker” (AMM). It is a liquidity pool where people deposit crypto pairs like ETH-USDT in the pool and earn interest and fees when someone uses the liquidity pool on the Uniswap for liquidating their crypto or swapping their crypto.
The idea of merely having a coin in a market which is not premined , no venture capitalists etc. Sounds pretty awesome. The growth of the yfi coin has shown that DeFi has power that cannot be ignored in terms of financial freedom that they can provide to people. It’s 100% true that it is risky but at the same time it has given interest even bigger and faster than bitcoin itself. In my opinion it falls in the category of highest risk and highest return.
DeFi Features :
- DeFi has many features like lending-borrowing being the most common nowadays. There is even the new concept of yield farming that provides high yield on your locked crypto. It can go as high as 50 to 70 % per annum.
- Another feature of DeFi is Dex, for example “Uniswap ” is a kind of DEX-(Decentralised CryptoExchange) where people can trade without any kyc or document verification. The use of Dex itself has skyrocketed. Volume in Dex’s reached $4,32 billion in July, up from $1.52 billion in June. 41% of July’s volume came from Uniswap. The money is flowing inside crypto from the outer world at a much faster rate. click on the link to have a look at the most trending app in crypto space right now. —->>Uniswap
The swap page is where you can swap between coins seamlessly, without any hassle of completing your kyc etc..
- DeFi has raised questions in many people’s minds as to why some would take a loan by keeping their house as a collateral for 14 % PER ANNUM. When they have a choice to reduce that 14% down to 1-6% and another benefit is that you don’t have to pay heavy taxes out of it.
The DeFi section is pretty amazing according to me and is in its infant stage right now. The projects are cool,awesome and outperforming other projects in the space. But the main concern is that one should not put all his investment in the DeFi section right now , as it is a bit new and the project might have a lot of bugs to be fixed. But DeFi has a very big room to grow, as per information, Only the lending and borrowing feature will take the market valuation of DeFi into trillions of dollars. Which will make new millionaires. Maximum in those millionaires will be youngsters.
Hope you guys enjoyed this short sentiment towards defi space. Kudos Guys ??