What is Defi?

DeFi stands for "Decentralized Finance" it's a collection of financial products and services that are available for everyone on the internet, anyone who has access to blockchain technology and the internet. With DeFi everything is open with no authority to block or accept your transactions or transfers, you have total control over your own capital mobility.

Thanks to the use of smart contracts, services that were previously slow and at risk of human error are automatic and safer now that they're handled by code that anyone can inspect and scrutinize.

Traditional Finance transactions go through a middleman or third-party agent. It's because there is a need for trusted institutions to make sure the contract will be working properly.

With a smart contract, the only two concerned parties are the ones at the start and the end of the transaction. The trust in the transaction relies on the code.

What are some of the blockchains that support smart contracts?

Ethereum(ETH)

Ethereum is the biggest global, open-source layer1 platform for decentralized applications. Decentralized applications currently built on Ethereum represent 58% of the total DeFi ecosystem value. Ethereum is also the second biggest cryptocurrency by market cap after Bitcoin. It was created in 2015 and is having an important update in mid-September moving from a proof of work model to a proof of stake one. To be able to use the ETH DeFi ecosystem you will need an ETH wallet integrated into your browser like a MetaMask wallet (you can create one by clicking on the highlighted link) Don't forget to keep your private key safe and away from the public, because with the freedom of DeFi comes to a lot of risk with scams, hacks, and other exploits.

Biggest Dapp built on Ethereum:

Curve: Curve is an automated market-maker optimized for stablecoins, working as an exchange on one side, and allowing liquidity providers to earn fees and lending interest on the other side

Sushi Swap: SushiSwap ticker symbol:(SUSHI) is an example of an automated market maker(AMM). An increasingly popular tool among cryptocurrency users, AMMs are decentralized exchanges that use smart contracts to create markets for any given pair of tokens. SushiSwap launched in September 2020 as a fork of Uniswap, the AMM which has become synonymous with the decentralized finance movement and associated trading boom in DeFi tokens.

Polygon POS Bridge: A bridge is basically a set of contracts that help in moving assets from the root chain to the child chain. There are primarily two bridges to move assets between Ethereum and Polygon. The first one is the Plasma bridge and the second one is called the PoS Bridge or Proof of Stake bridge. The polygon network is layer 2 built on Ethereum which makes transactions much cheaper with very low gas fees. Layer 2 chains are very useful to help in scaling the layer 1 chain they are built on.

Compound: Compound Finance is a marketplace used by crypto investors to lend and borrow their digital assets. Users can also vote on the governance structure of the Compound protocol using the COMP token.

dYdX: dYdX is a decentralized exchange (DEX) platform that offers perpetual trading options for over 35 popular cryptocurrencies. It stands as one of the biggest decentralized exchanges in the world in terms of trading volume and market share. Very useful service if you live in a jurisdiction that bans regular crypto derivatives platforms. (Like Binance, FTX, Kucoin...)

Binance SMART CHAIN(BNB)

Binance is the biggest cryptocurrency exchange in the world. It was founded in 2017 and is registered in the Cayman Islands. Binance Coin (BNB) is an ERC20 token which means that it is built on top of Ethereum. With this cryptocurrency, you can pay a сommission for transactions on the exchange. Its primary use is to get fees discount on Binance. BNB also provides users with access to advanced features to be used on the new decentralized exchange and smart contracts application. To be able to use the BSC (Binance smart chain) ecosystem you will need a BSC wallet like Trust wallet(on your phone) or a regular Binances mart chain wallet you can access through an extension of your browser. You can also use MetaMask but you will need to adjust the networks manually. A lot of play-to-earn games have chosen the BSC to operate on because it's much cheaper and faster than Ethereum.

Biggest Dapp built on BSC:

Pancakeswap: PancakeSwap Ticker Symbol: (CAKE) is an automated market maker and Decentralized Exchange (DEX) that allows tokens to be exchanged on the Binance Smart Chain. Users can earn $CAKE tokens by providing liquidity to the platform, staking, and also getting a chance to win some $CAKE tokens through a lottery. Pancakeswap is one of the most users friendly Dapp(decentralized application) available it recently added perpetual contracts trading services and it has its own NFT marketplace. This is really one of the platforms that can give you the full DeFi experience.

Mobox NFR Farmer: Like many play-to-earn games recently created through DeFi MOBOX is a gaming platform that combines yield farming and farming NFTs to create a free-to-play and play-to-earn ecosystem.

Venus Protocol: Venus is a borrower- and lender-concerned dApp. The platform acts as a money market. It holds stablecoins and via an algorithmic protocol, it allows users to swap stablecoins. Venus’ main strength is its high speed and extremely low transaction costs, which are a direct result of being built on top of the Binance Smart Chain.

What about your favorite Altcoin?

Obviously, there is more chain used in DeFi like the Solana network, Near Protocol, and Cardano... But those ecosystems are new and emerging. Currently, they can't really compete with the DeFi applications built on ETH and BSC.

But that is also the reason why investors speculate on those projects being the next potential ETH killer because if they succeed they will receive probably a huge chunk of the DeFi ecosystem market share and with it a huge flow of capital.

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