DeFi

Decentralized finance, or DeFi, is a growing ecosystem of financial protocols built on blockchains that enable anyone, anywhere to access traditional financial instruments in a completely decentralized way. By deploying smart contracts, DeFi protocols provide alternatives to traditional financial services that are more accessible, more resilient, and more transparent.

Since the launch of Ethereum in 2015, the DeFi ecosystem has grown exponentially, and the ecosystem continues to grow at a rapid pace.

DeFi protocols can be categorized into five main categories: lending, borrowing, payments, exchanges, and governance.

Lending protocols allow users to earn interest on their digital assets by lending them out to borrowers. The most popular protocols in this category are Maker and Compound.

Borrowing protocols allow users to borrow digital assets against their cryptocurrency holdings as collateral. The most popular protocols in this category are Dharma and InstaDapp.

Payments protocols allow users to send and receive digital assets in a decentralized way. The most popular protocols in this category are Wyre and Connext.

Exchanges protocols allow users to trade digital assets in a decentralized way. The most popular protocols in this category are 0x and Kyber Network.

Governance protocols allow users to participate in the decision-making process of decentralized organizations. The most popular protocols in this category are Aragon and Colony.

The DeFi ecosystem is still in its early stages of development, but the potential is huge. By providing alternatives to traditional financial services, DeFi protocols have the ability to democratize finance and empower individuals all over the world.

As DeFi continues to grow, it has the potential to completely reshape the financial landscape and provide equal access to financial services for all.

Other DeFi applications include stablecoins, which are digital assets that are pegged to the US dollar or another stable asset, and flash loans, which are loans that are taken out and repaid in a single transaction.