What applications are there at Defi?

There are many different applications in the decentralized financial sector. Many users especially appreciate the opportunity to earn money with the Defi applications. Practically every application in the decentralized crypto exchanges sector has its counterpart in the traditional financial sector.

What is lending and in the decentralized credit market explained

The largest Defi protocols such as MakerDAO, Compound and Aave have one thing in common: their main use case is based on lending and borrowing. Specifically, tokens are awarded for which you then receive interest in return. So instead of doing a credit transaction with the bank, the network itself processes the business based on the decentralized credit protocol. The standard case is that you “log in” tokens that you have to grant loans. This means that you make your tokens available to other participants. In return, you receive interest on your borrowed tokens.

What is staking and the mining alternative as an attractive source of income

Having to operate rather than consuming mining, it is sufficient when staking his cryptocurrencies to ask the network. In contrast to lending, no credit is granted, but only the network is secured by depositing it. In return, on savings income in the respective cryptocurrency happy. The higher the deposited cryptocurrency volume, the greater the participation in the processing volume of the blocks.

What are derivatives in the Defi sector

In the decentralized financial sector, too, there are financial derivatives as we know them from the traditional financial sector. So if you like to trade-in options, futures or other financial products, you can do so in a decentralized market environment. In theory, any underlying asset, e.g. Bitcoin or Gold, can be mapped using derivatives in the Defi sector.

What are Decentralized Exchanges (DEX)

Crypto trading without a middleman unlike traditional exchanges, decentralized exchanges (DEX) never have access to traders assets. Since there is no central authority that can be hacked, the credits are particularly secure. Anyone can trade their digital assets on decentralized stock exchanges in no time and without registration.

What are payments in the Defi sector about?

Defi applications are also already available for decentralized payment processing. Since transactions on many blockchains such as Bitcoin or Ethereum cannot be processed particularly quickly or can only be scaled to a limited extent, alternatives are being sought. These alternatives can include so-called second-layer solutions, i.e. additional payment infrastructures that are “put on top” of the actual blockchain. This allows more transactions to be processed “off the chain” faster.

Stable coins are token-based derivatives to map an underlying value mostly US dollars and make it usable for token applications. Stable coins can be secured in different ways. A deposit using cryptocurrencies, real fiat currencies or an algorithm is possible.