Diving into DeFi (Decentralized Financing) - By A Legitimate Illiterate.

in hive-167922 •  26 days ago  (edited)

I intend to write a book dedicated to 'DEFI'; a simplistic book written in the perception of a 'legitimate illiterate'. In a bid to support the evolution of a physical hub that i now have located in the Philippines called Macrohard, i want to release a book each month, covering a niche in cryptocurrency and one these books will cover the crypto-niche called 'DEFI'.

The Macrohard hub intends to gather together as many as 300 people in the Philippines in the coming 6-months, to introduce them to cryptocurrency. That motion has started:

In recent times, i started to look into the world of 'DEFI', primarily to interact within this niche. I had noticed the boom with the cryptocurrency markets and i had wondered what was steering it.

Interacting with DEFI and uncovering it, i could enhance my insight into the true state of the world, identifying what 'barriers' DEFI tackles and what barriers it inadvertently creates. In effect, i can better formulate the model behind my own cryptocurrency projects, especially one called 'cryptoulogs', which will have a DEFI layer.

As part of my interactions, i have purchased many DEFI coins too. Most of these purchases occurred on Uniswap!

'Decentralized finance' is one of the recent 'cyptocurrency trends' that has stirred the recent boom in the cryptocurrency markets. There are other cryptocurrency trends and niches that have emanated too since the advent of 'DEFI', such as 'decentralized oracles, ILO/IDO protocols, decentralized tentacles etc' all seeming to have emanated to enhance 'DEFI'.

DEFI has become a very prominent niche in the world of cryptocurrency but it is still finding itself. According to me, the primary reason for the recent cryptocurrency-boom isn't entirely 'DEFI'; "the world is getting better ready for decentralization".

This wasn't the prior-case. In the recent times, the world of cryptocurrency have begun to welcome the concept of 'interoperability/unchained' and this has spearheaded the success of 'DEFI'. For instance, people are now willing to wrap their BTC, to make use of a DEFI-feature offered on Ethereum.

'Interoperability' was previously frowned upon by the world of cryptocurrency as blockchain(s) had preferred to fork into new chains instead of interoperate.

As the world becomes better-ready for decentralization, 'DEFI' can become a more established/scalable cryptocurrency-innovation.

I have learned a lot about the current state of cryptocurrency, since my interaction with DEFI, which has given me further insight into the true state of the world.

From an innovative standpoint, the advent and success of DEFI has shown me, that 'cryptocurrency' is still very young. It is also under-explored and under-used and as the cryptocurrency community gets better-ready for 'decentralization', many more revolutionary use-cases for cryptocurrency will be discovered.

What’s DeFi In Your Mind And Have You Ever Bought Any DeFi tokens?

'DEFI' is broader than is told. Typically, one would think 'crypto-loans' when thinking 'DEFI' but there is more to it.

'DEFI' refers to 'decentralized financing'. This is a very broad crypto-niche.

Referring to 'crypto-loans', cryptocurrencies are generally a product of 'decentralized blockchain(s)', as such 'crypto-loans' are inherently DEFI.

Courtesy of 'DEFI', people can access finance in the form of loans, using their cryptocurrency-holdings as collateral. Loans in this case are executed in a trust-less manner using smart-contracts and the data powering these loan transactions are immutable and verifiable i.e documented onto a blockchain.

Since the advent of DEFI, people can now entertain the luxury of availing crypto-loans, whether they are banked or not and without the technicalities involved in deriving conventional bank loans. In many cases, they can obtain loans 'under-collateralized'.

With 'DEFI' came a new variety of 'decentralized exchanges' options, providing additional avenues for 'decentralized financing'. Uniswap for instance, is one such 'decentralized exchange', offering a simplistic protocol that allows users to attain 'decentralized financing', by participating as 'automated market-makers' or 'liquidity providers'.

Via Uniswap, startups can finance their projects too! Alas, the existence of DEX-tools like Uniswap, stirred the need for complimentary smart-contract protocols and eventual 'crypto-niches' such as 'ILO' (initial liquidity offers) and 'IDO' (initial DEX offering), emanating projects like 'Trustswap, Unicrypt, Unifi, LID etc'.

Centralized exchanges like Binance, Bithumb, Hotbit, Huobi etc have offered DEFI-like features and services all along but in recent times, they have acknowledged 'DEFI' as a niche and have began to add entire DEFI-layers to their range of services.

Within the niche of DEFI, new opportunities for innovation have continued to arise. Smart-contracts needing more data for advance decision-making and additional trustlessness, may have contributed to the birth of 'decentralized oracles', now used prominently among DEFI-platforms, adding a layer of trustlessness and more decentralization e.g BAND, KAVA, LUNA etc.

I have interacted with several DEFI-projects so far and i have bought many DEFI tokens. I have also earned a small quantity of DEFI tokens by learning about them, after participating in several 'learn about DEFI' campaigns administered by coinmarketcap.

Then, i earned some $UNI tokens in the recent airdrop administered by Uniswap and i have earn some $SUN tokens too, having participated in its genesis mining.

Exploring other DEX options, i have used Justswap (by Tron) and Burgerswap of the Binance smart chain.

What Makes You Excited About DeFi?


In the broader scheme of things, the world of cryptocurrency has never been as ready for decentralization and scalability as it has been lately.

Inter-blockchain(s), there has been so much competition as the world of cryptocurrency has constantly sought after 'a flawless blockchain'. Not ready for 'decentralization' in the grand scheme of things, they have continued to fork/split into sub-chains, deterring the collecting scalability of cryptocurrency.

The world of cryptocurrency is becoming better-ready for decentralization and lately, they have begun to welcome 'interoperability/unchained'.

Underlyingly, what stirred the recent cryptocurrency-boom was 'interoperability', laying the basis for DEFI to boom. Due to 'interoperability' and by virtue of DEFI, there has been an oblivious bridge created between DEXes (decentralized exchanges) and CEXes (Centralized exchanges), which is positive.

New innovations have been undertaken, powered by DEFI and even 'crumbling projects' have resurged by virtue of DEFI.

It is high time that cryptocurrency collectively scales, becoming known to the world as an indispensable and revolutionary asset.

Where the world of cryptocurrency unites, where blockchain(s) can interoperate, where cryptocurrency innovations can get financing irrespective of their native blockchain, 'cryptocurrency will scale'.

Which Project Do You Think Is The Best DeFi Application?Why?

At the current DEFI age, it can't be established which DEFI protocol is the best.

I think DEFI is still very young and needs more innovation. For instance, Uniswap has very high fees, which one can circumvent using Justswap (by Tron) or Burgerswap (by Binance smart chain) but none of these three protocols have say 'order books' or optimized tracking tools, that you end up, seeking the CEX options.

This is general state of DEFI, evident in how many DEFI tokens and projects have emanated recently and further evident in how DEFI-users are quick to transition to the next DEFI project.

Now, even though it is evident that many DEFI-users seek DEFI-projects with better ROI, it is becoming ever-evident that just offering 'the best ROI', no longer wins a DEFI-project the masses.

People are beginning to seek 'innovation' too or 'community'. For instance, yearn.finance may no longer offer the best ROI for yield-farmers but it has maintained its user-base, likely because it has continued to innovate.

In terms of financial ROI, i can't say i have succeeded with any DEFI token just yet. Using Uniswap for instance, i have always been reluctant to leave the markets due to high fees, preventing me from having taken gains. DEFI-projects with strong uniswap-based hype, have not been able to sustain the hype either.

As such, i have begun to shift back towards my roots, which is "blockchain-based social media" e.g Hive.

This particular cryptocurrency-niche has that 'loyalty factor' (from its user-base), which is missing among traditional DEFI projects. Where a social media integrates 'DEFI', that is powerful.

So, i have embarked on creating my own blockchain-based social-media project called 'cryptoulogs', with a DEFI-layer.

Speaking of DEX protocols, it can't be told yet which is the best one either. I have tried Justswap, Burgerswap and ofcourse Uniswap and i still find myself in eventuality approaching the Centralized Exchanges as these CEXes are growing well-optimized for DEFI.

Altogether, the niche of DEFI is still in its growing stage.

What’s The Mechanism Of DeFi Or Any DeFi Project?

DEFI works best with smart-contracts and that appears evident, even historically. However, it has been made evident since the inception of DEFI that 'smart-contracts' however advance, needs additional (external) layers of functionality to sufficiently power DEFI.

For instance, a smart-contract on its own, may not be deemed sufficiently trust-less, to power DEFI.

As such, a DEFI project may need to make use of ILO/Audit services offered by third-parties, to assure 'trustlessness'. It may need 'decentralized oracles' too.

DEFI-DEXes on the other hand aren't sufficiently-tooled yet. For instance, one such functionality that stayed missing from many of these DEFI-DEXes is 'governance'. It is no coincidence that Uniswap recently added a governance layer to their protocol and a $UNI token to effect it.

Overall, existing DEFI platforms aren't well optimized for simplicity. Even in cases where 'interoperability' is tackled, the technical know-how involved in this inter-operation poses a hassle for users. For instance, one may want to sync his 'Binance smart chain' with Metamask, to yield-farm using $BNB but is deterred from doing so, by the technical complexity of process.

One may have loved to provide liquidity via Uniswap for instance but possesses only ETH, then has seeks options like Dodoex in a bid to escape the technicalities involved with 'impermanent losses'.

Are You Feeling Positive Or Negative About The Future Of DeFi?

The DEFI niche has inspired me a lot. Recently, since the advent of DEFI, I have seen many projects that have been deemed 'crumbled' by crypto-standards resuscitated again.

The message? The world is getting better-ready for cryptocurrency. Too, 'my projects which have struggled to come to life, can take on life as we now have the luxury of DEFI'.

Where well-explored, there is a lot to uncover from the world of DEFI, in turn giving us a better understanding of the beauty of cryptocurrency.

The recent airdrop in $UNI tokens, by Uniswap, among other things, united the world of cryptocurrency; a very historical time, in the cryptocurrency-world and to the notice of the world at large. This is an underlying plus for 'cryptocurrency'.

The vibrancy in terms of innovation emanating from the niche of DEFI is contagious as well. Decentralized financing will stir the resuscitation of redundant projects and incite the birth of new ones. More innovative-revelations will emanate in turn, highlighting further the indispensable beauty of cryptocurrency/blockchain as a tool to return value to humans.

Internal to the crypto-world, it will become evident the value of 'interoperability' and 'community' and the world of cryptocurrency, will begin to have the 'loyalty factor' that it needs, where projects become fully-backed by humans.

In eventuality, the value of 'cryptocurrency' can begin to be measured in terms of 'humans' rather than 'bulls or bears'.

Your boy Terry


In recent times, in the space of 2 months, i have done 92 videos covering DEFI-related projects. I am a legitimate illiterate and i am not crypto-savvy. My journey started on steemit. This means that you can discover 'DEFI' too!

Join my Telegram: https://t.me/joinchat/GtfUvhoqQkW5U9EGboRGMw

If you would like to contribute to the success and evolution of our Macrohard hub, contact me on Telegram. My username is '@surpassinggoogle'.

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