Top tips for DeFi 1.0 beginners: Master the most important DeFi knowledge in one chapter

DeFi has been a hot topic in the blockchain space since 2019. There is no doubt that DeFi has become a hot topic in the cryptocurrency world.

According to Footprint Analytics, as of November 23, 2021, the total DeFi TVL is $274.4 billion. It was only $13 billion a year ago.

Data Source: Footprint Analytic - DeFi TVL for the entire network has increased 20x over the past year.

The rapid and rapid growth of DeFi has brought joy to everyone involved in the blockchain space and won the approval of many investment firms.To date, total investment for 2021 is $24.8 billion, up 626% from $3.4 billion in 2020.

Source: Footprint Analytics - Monthly Mortgage Rate Guide for 2021

So what is this powerhouse called DeFi?

01

What is Challenge?

DeFi stands for decentralized finance, also known as open finance. With the rapid development of blockchain, application scenarios continue to increase and financial markets become the riskiest industries. In fact, it refers to the decentralized process used to create open finance. Everyone in the world can participate anytime, anywhere.

Traditional finance CeFi vs. Open a DeFi account

Simply put, DeFi is a traditional financial exchange for a network blockchain.However, compared to traditional finance, it has been seen by blockchainDispersion, sivsmart contractIt transforms existing companies of interest in the financial industry, enables users to receive financial services at lower cost, and improves the performance of the entire financial system. As shown in the figure below, many open source financial services can see their inherent financial design and services.

Figure: Comparison of existing and open financial status of various services

An important part of the vast world of crypto, DeFi offers many important financial services that are similar to the traditional financial world available in a manner governed by the public rather than the private sector from source.

Image: CeFi vs. DeFi

02

DeFi past and present

While Bitcoin formed the basis of peer-to-peer payment services when it was launched in 2009, public Ethereum blockchains, launched on July 30, 2015, bring the nature of blockchain to the financial industry and encourage new initiatives. , creating a decentralized financial ecosystem.

The launch of the MakerDao protocol marks a turning point for financial services in the blockchain space. This allows users to do more than just exchange money between two addresses. MakerDAO is an Ethereum-based protocol that allows users to obtain DAI, a 1:1 USD pegged stablecoin bitcoin issued by digital asset-based trading products. MakerDAO was the first LEGO to create a new open-source, license-free DeFi ecosystem.

Since then, other smart contracts have come online, creating a consistent and interactive environment.

Announced in September 2018, the Compound offers the lender a higher interest rate for borrowers and interest-bearing loans benefit from the interest paid by lenders. ".

Launched in November 2018, Uniswap, the decentralized exchange (DEX) platform for Ethereum, allows users to connect and not trade multiple tokens on Ethereum.

Image: History of DeFi development

Since then, various DeFi applications have sprung up one after another, from the most convenient loans and offers to a wide range of electronic devices, payments, insurance, etc., even in the absence of disasters, creating wealth, volatility and the financial economy ecosystem. .

0Three

6 ecological fields on DeFi

The DeFi ecosystem can be divided into 6 main sections: Stablecoins, Transformation, Oracles, DeFi Native Projects, Aggregators and Wallets.

- Stablecoins :The foundation of the DeFi ecosystem

- Coating industry:With the rise of DeFi, performance issues on the public chain, especially Ethereum, have become increasingly important. Thus, at the exchange level, many public chains are actively exploring solutions including phase 1 and phase 2. Phase 1 is essential to improve the performance of public chains, and layer 2 is intended to improve the performance of the Ethereum network. (Layer 1 ).

-Oracle :Oracles provide valuable data for a variety of Dapps/processes and act as a bridge between the on-chain and off-world.

- DeFi Key Features:Stablecoins, exchange processes, and oracles form the most common processes in the DeFi ecosystem, and various electrical processes can be created through these processes. Among them, DeFi functions can always be divided into several categories such as libraries, DEXs and utilities.

- Collector system:There is a spread of different types of loans and different exchanges, depending on whether the collector creates. Aggregators increase the return of highs and lows as the spread of multiple platforms.

- Wallet:As one of the key components of the DeFi ecosystem, it is considered the browser of the DeFi world, where users can access a variety of Dapps.

04

How do I get started with DeFi Knowledge Base?

If you want to enter the world of DeFi as a beginner, where do you start?

DeFi ecosystem

- ecosystem

- DeFi hom ntu

- The plaque represents the project.

DeFi Project

- Ecology and type of public channel in which it resides

- Token and economic structure

- Compare the characteristics of the same species

- Current ranking and project information

How to get business information

- Financial News

- Introduce new activities

- News of vulnerability attacks

- Industry Guide

How to quickly start the DeFi project?

We are facing a lot of DeFi work, how can we do it faster and better? You can start from two things:

DeFi Project Information

- DeFiLlama: files across channels, target groups

- Debank: data on channels, categories, release dates (reorder to see new jobs)

- Footprint Analytics: A visualization platform for cross-channel data, enterprise and project data, allowing you to create your own analytics data with just one click.

- Commercial alerts and information related to the book, etc.

Coiningecko : T3 2021 - Rapport

Token Insights: Quarterly Report

Footprint Analysis: Monthly DeFi Report

Contract: Q3 2021

- primer

how to challenge

Mastering DeFi

concludes

This article briefly describes what DeFi is, its fundamental ecology, and its channels of understanding. Then we will continue to explain why DeFi exists, how DeFi participates, and how DeFi works differently.