What is DeFi?
Decentralized Finance (DeFi) uses smart contracts on blockchains to offer traditional financial services such as trading, lending, and interest without central intermediaries (like banks).
Benefits of DeFi
Permissionless
Anyone with a wallet can participate, no credit check needed.
Self-Custody
You maintain full control over your private keys at all times.
Transparency
All transactions and protocol reserves are viewable on the blockchain.
Top DeFi Protocols
An overview of the most established protocols by Total Value Locked (TVL) and relevance.
Uniswap
"The leading decentralized trading protocol for automated token exchange."
Aave
"An open source liquidity protocol for providing assets and borrowing."
Lido
"Enables staking of assets while maintaining liquidity through derivative tokens."
MakerDAO
"The protocol behind the DAI stablecoin, enables loans against crypto collateral."
DeFi Safety Check
Before depositing assets into a DeFi protocol, you should check the following points:
- Has the protocol been audited multiple times?
- Is there a bug bounty program?
- How decentralized is the governance?
- How high is the historical liquidity?
Risk Warning
Smart contract risks, oracle failures, and liquidation dangers are omnipresent in the DeFi space. Only invest capital you can afford to lose.