DeFi – Decentralized Finance

Decentralized Finance or Open Finance describes a financial system that can not be censored & doesn’t depend on centralized banks. Every financial service you know from the traditional world should be enabled in a new parallel financial system that is accessible to all people. In order to make this vision come true, this alternative financial system will run on open software and decentralized networks. By now, we can already buy, borrow, lend & trade through decentralized protocols.

What is DeFi?

Definition: DeFi is an open, permissionless ecosystem built on blockchain that enables all kinds of financial applications. This alternative financial system shall be accessible to everyone and should neither depend nor be able to be shut down by any central authority.

In layman’s terms: Whatever you can do today in our current, traditional financial system, you will be able to do in this new open system. By creating it on top of decentralized blockchain networks and utilizing truly decentralized smart contracts, there are no gatekeepers preventing access to this financial system. Everyone with a phone should ultimately be able to participate in this open finance system.

Status Quo: DeFi is very experimental and a lot more risky than holding Bitcoin or Ethereum. A few projects have been building since 2016/2017 and we’ve seen a significant rise of interest and new projects in 2019. Protocols are constructed in an open, permissionless way which allows others to build on them and combine multiple protocols (“Money Legos“). By now, basic financial instruments are available, crypto-unique functionalities such as flash loans have been invented & new projects start to build more complex products. In 2020, decentralized exchanges & other protocols have attracted billions of dollars in “Total Value Locked” & “Trading” – especially through liquidity mining which was successfully introduced by Compound and the COMP token issuance.

What can you do today in decentralized finance?

You can already do almost all the financial activities you know from the real world. Complex products are being built for sophisticated investors.

Earn

Blockchain projects often pay their contributors in their own cryptos. You can work for bounties, grants or full-time and get paid in crypto.

Hold

Once you’ve acquired crypto with your FIAT money (USD) you can take self-custody and securely store & save it without a bank account.

Spend

You can use your cryptos to pay for your bills and food at 1000+ merchants in offline & online stores. You can also donate with crypto.

Lend & Borrow

You can lend cryptocurrency to other people or specific protocols and earn interest. You can also take out loans with a certain collateral.

Stake

Staking is similar to lending. You add your funds to a protocol and you receive interest payments for the time you “locked” your funds there.

Trade

You can exchange one of your cryptocurrencies against another crypto asset on decentralized exchanges.

New products: Derivatives

You’re able to trade synthetic assets – representations of other assets. Projects also work on implementing futures, forwards, options & swaps.

New products: Yield optimizer

You have many yield opportunities in DeFi. You can use robo advisors or projects that track the market and implement (auto-)strategies.

More products

Essential products such as stable coins & insurances are being created as well as new combinations of lending, staking, flash loans ..

Let’s get you started

These websites are great to get started with DeFi. Once you understand basics & risks, you may wanna look into DEXs, aggregators & projects.

DefiPulse - Zero to DeFi

DefiPulse provides great data and insights to DeFi. Here’s an in-depth introduction to DeFi and the first money legos.

DefiRate - Defi Insights

DefiRate provides reports, statistics, project analyses and comprehensive guides to get started with DeFi.

DefiPrime - Info

DefiPrime is a media outlet solely focused on Defi with a focus on analytics for Defi projects and the Defi space.

Bankless - Starters guide to going bankless

Ryan & his guest writers share insights to DeFi, guides to get started, tactics & investment strategies to succeed in DeFi.

Yield Farming Info

This website lists current yield farming opportunities, and additional resources to look into – great page to stay on top!

Coingecko - DeFi Top 100

Coingecko lists DeFi assets quicker than comparable websites. They’ve introduced a great list with top DeFi assets.

All Defi projects

We list all DeFi projects and showcase solutions below to help people learn about this new financial system, and find projects & partners!

Get to know DeFi projects

On BC, DeFi projects introduce themselves, explain value propositions, how it works under the hood & opportunities to get involved.

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