Thread by @cryptobafemi

Let's Talk about DeFi..

DeFi stands 𝗗𝗲𝗰𝗲𝗻𝘁𝗿𝗮𝗹𝗶𝘀𝗲𝗱 𝗙𝗶𝗻𝗮𝗻𝗰𝗲 but what's it all about?

Is it just Bitcoin? What does it really entail?

𝗪𝗵𝗮𝘁 𝗶𝘀 𝗗𝗲𝗙𝗶? [DeFi 101] 📝

A Thread 🧵
👇👇👇

When we talk about #Bitcoin, we talk about a peer-to-peer system that allows people to send and receive money without any intermediary like the Bank or stock Exchanges.

But Financial services are more than sending and receiving, ain't that right?

That's where Defi comes in.
1/n

DeFi not only allows transfer of money.

It allows for other financial services such borrowing, lending, fixed deposit, etc.
2/n

How it works:

#Decentralized Finance uses Blockchain technology.

This allows for decentralised apps (Dapps) to be built on them.
3/n

I explained Blockchain and Dapps here

4/n

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Crypto ecosystems that allows the implementation of DeFi are also known as Layer-1 Blockchains. Examples are:

-Ethereum
-Binance Smartchain
-Avalanche (#aave )

5/n

Advantages of DeFi over Traditional/Centralised Finance:

- No need for trust in an intermediary, instead everyone in the system set their own rules.

- It can be accessed globally without restriction without restrictions unlike Traditional finance.

6/n

- It is private, censorship resistant and permissionless, your assets belong to you and you only.

- It's not prone to human error, unlike the central bank that can mismanage people's funds.

7/n

Functions of DeFi:

-Decentralised #Exchanges (Dexes)
-Lending and borrowing.
-Staking
-Yield Farming
-Non-Fungible tokens (#NFTs )
- No Loss games and lottery.

8/n

Examples of DApps:

- #Pancakeswap on Binance

- Uniswap on Ethereum

- Sushi Swap on Ethereum

End

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Recap⤵️

0: Let's Talk About DeFi
1: What is DeFi
2: What is DeFi (cont'd)
3: How it Works
4: Blockchain and Dapps
5: Layer-1 Ecosystems
6: Advantages of DeFi over TradFi
7: Advantages (cont'd)
🔚Examples of DApps

NOTE: I'll be writing about DeFi more in future so follow if you haven't and turn on post notification🔔

Check my previous thread on How to Do Your Own Research