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An Introduction To Decentralized Finance

An Introduction To Decentralized Finance 1oQnL
Hi There! I am thinking of starting this new section on decentralized finance or DeFi -- starting from basics. A lot is happening in the DeFi space today, and understanding the fundamentals will help appreciate these developments better. So, as I embark on this journey of finding out what DeFi is really about, I plan to write short articles breaking down the concepts of DeFi in simple words. To begin with, let us see what DeFi is all about, a brief history of how DeFi came into existence, and why it is so important. Remember the "good old" barter system that flourished ages back? I needed goats, and you needed rice. I could give my ten bushels of rice to you and take your two goats, and both of us went home happily. Soon came metal coins and paper notes. And with them came a central figure -- a financial institution. This arrangement created the necessity to trust a central authority with your money. Also, one had to jump several hoops, suffer delays, and pay hefty commissions to access one's own money. In the past, several attempts were made to find new ways that give people reprieve from the many problems that today's outdated finance structure creates while also providing the security and assurance that many find when their money is in a bank. The first widely adopted of such ideas was "Blockchain. " It was popularized by an alternate currency called "Bitcoin. " Bitcoin was the first successful attempt, where people could pay for anything, including a pizza, with digital coins that are not controlled by banks or governments. This newly found freedom spurred discussions around how we can do more with Blockchain, perhaps do everything for which we need a bank today -- borrow, lend, deposits -- but of course without a bank. And that is how decentralized finance or DeFi was born. DeFi refers to a basket of financial applications built on Blockchain and does not involve traditional institutions such as banks. Think of lending or borrowing, saving, insuring your assets, or even stock market functions such as spot trading, margin trading, derivatives trading -- but all these without going to a bank or relying on a stock exchange. It aims to create an open ecosystem for finance similar to what the internet is today for access to information. DeFi allows everyone to seamlessly access money regardless of where they are or who they are. Furthermore, privacy is a cornerstone of DeFi. People who use DeFi applications are not asked to share their personal information. They don't need a username or a password. And the users are the only ones holding the information, such as private keys that give them access to their monie. Yet another nuance of DeFi is its open source code base. Anyone can get the source code of these applications, review and fork them into new apps. It makes the DeFi space very competitive as the developers are forced to build the best possible product. Today, the total market cap of decentralized finance is over $130 billion. There are scores of DeFi applications in the market, including Aave, MakerDAO, Compound, and Uniswap. Traditionally DeFi applications were built on Ethereum Blockchain. But now, they also run on other platforms such as Binance Smart Chain, Avalanche, etc. The first time people could do much more with their money than send it from point a to b was when MakerDAO launched in December 2017. Users could use Ether cryptocurrency as collateral and borrow MakerDAO's Dai stablecoin. Dai is pegged 1-to-1 to the value of the US dollar. More on MakerDAO in future posts. The term DeFi was coined in August 2018. In a conversation on a Telegram channel, Inje Yeo of Set Protocol suggested DeFi, along with other names such as Open Horizon, Lattice Network, and Open Financial Protocols. Blake Henderson of 0x put his seal of approval on DeFi since he felt the word sounds like "DEFY. " Though the future looks bright for decentralized finance, it is not there quite yet today. Not all applications running on decentralized platforms are fully decentralized. Several of them are centrally controlled to some degree, especially those in the early stages. Most apps conform to "Open" finance rather than "Decentralized" finance since they allow anyone to join. But similar to the growth of the internet, DeFi will soon mature and become fully decentralized, ushering a new chapter in the world's economic history.
Hi There! I am thinking of starting this
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new
section on
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decentralized
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finance
or
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DeFi
-- starting from basics. A lot is happening in the
Possible spelling mistake found.
DeFi
space
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today
, and understanding the fundamentals will
This phrase/word (depending on the context) can be potentially replaced with :
help
appreciate these developments better.
This phrase/word is too simple and can be replaced with:
So
, as I embark on this journey of finding out what
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DeFi
is
really
about, I plan to write short articles breaking down the concepts of
Possible spelling mistake found.
DeFi
in simple words.

To
This phrase/word (depending on the context) can be potentially replaced with :
begin
with,
This phrase/word (depending on the context) can be potentially replaced with :
let
us
This phrase/word (depending on the context) can be potentially replaced with :
see
what
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DeFi
is all about, a brief history of how
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DeFi
came into existence, and why it is
This phrase/word is too simple and can be replaced with:
so
This phrase/word is too simple and can be replaced with:
important
.

Remember the
Use a smart opening quote here: "“".
"
This phrase/word (depending on the context) can be potentially replaced with :
good
This phrase/word is too simple and can be replaced with:
old
Use a smart closing quote here: "”".
"
barter system that flourished ages back? I needed goats, and you needed rice. I could give my ten bushels of rice to you and take your two goats, and both of us went home
happily
.
This phrase/word is too simple and can be replaced with:
Soon
came metal coins and paper notes. And with them came a central figure -- a financial institution. This arrangement created the necessity to trust a central authority with your
You use this word too often, consider replacing it with
money
.
Also
, one had to jump several hoops, suffer delays, and pay hefty commissions to
You use this word too often, consider replacing it with
access
one's
This phrase/word (depending on the context) can be potentially replaced with :
own
money.

In the past, several attempts
were made
to find
You use this word too often, consider replacing it with
new
ways that give
You use this word too often, consider replacing it with
people
reprieve from the
This phrase/word is too simple and can be replaced with:
many
problems that
This phrase/word (depending on the context) can be potentially replaced with :
today
's outdated
You use this word too often, consider replacing it with
finance
structure creates while
also
providing the security and assurance that
Possible agreement error. The noun find seems to be countable; consider using: "many finds".
many find
when their
You use this word too often, consider replacing it with
money
is in a
You use this word too often, consider replacing it with
bank
. The
first
widely
adopted of such
This phrase/word (depending on the context) can be potentially replaced with :
ideas
was
Use a smart opening quote here: "“".
"
Blockchain.
Use a smart opening quote here: "“".
"
It
was popularized
by an alternate currency called
Use a smart opening quote here: "“".
"
Bitcoin.
Use a smart opening quote here: "“".
"


Bitcoin was the
first
successful attempt, where
You use this word too often, consider replacing it with
people
could pay for anything, including a pizza, with digital coins that are not controlled by
You use this word too often, consider replacing it with
banks
or
This phrase/word (depending on the context) can be potentially replaced with :
governments
. This
newly
found freedom spurred
Did you mean "discussions about"?
discussions around
how we can do more with Blockchain, perhaps do everything for which we need a
You use this word too often, consider replacing it with
bank
You use this word too often, consider replacing it with
today
-- borrow, lend, deposits --
This phrase/word is too simple and can be replaced with:
but
of course
without a
You use this word too often, consider replacing it with
bank
. And
that is
how
You use this word too often, consider replacing it with
decentralized
You use this word too often, consider replacing it with
finance
or
Possible spelling mistake found.
DeFi
was born
.

Possible spelling mistake found.
DeFi
refers to a basket of financial
You use this word too often, consider replacing it with
applications
built on Blockchain and does not involve traditional institutions such as
You use this word too often, consider replacing it with
banks
.
This phrase/word (depending on the context) can be potentially replaced with :
Think
of lending or borrowing, saving, insuring your assets, or even stock market functions such as spot trading, margin trading, derivatives trading --
This phrase/word is too simple and can be replaced with:
but
all these without going to a
You use this word too often, consider replacing it with
bank
or relying on a stock exchange. It aims to create an
You use this word too often, consider replacing it with
open
ecosystem for
You use this word too often, consider replacing it with
finance
similar to what the internet is
You use this word too often, consider replacing it with
today
for
You use this word too often, consider replacing it with
access
to information.
Possible spelling mistake found.
DeFi
This phrase/word (depending on the context) can be potentially replaced with :
allows
everyone to
seamlessly
You use this word too often, consider replacing it with
access
You use this word too often, consider replacing it with
money
regardless of where they are or who they are.

Furthermore
, privacy is a cornerstone of
Possible spelling mistake found.
DeFi
.
You use this word too often, consider replacing it with
People
who
This phrase/word (depending on the context) can be potentially replaced with :
use
Possible spelling mistake found.
DeFi
You use this word too often, consider replacing it with
applications
are not asked to share their personal information. They don't need a username or a password. And the users are the
This phrase/word (depending on the context) can be potentially replaced with :
only
ones holding the information, such as private keys that give them
You use this word too often, consider replacing it with
access
to their
Possible spelling mistake found.
monie
.

Yet
another nuance of
Possible spelling mistake found.
DeFi
is its
You use this word too often, consider replacing it with
open
source code base. Anyone can
This phrase/word (depending on the context) can be potentially replaced with :
get
the source code of these
You use this word too often, consider replacing it with
applications
, review and fork them into
You use this word too often, consider replacing it with
new
apps. It
This phrase/word (depending on the context) can be potentially replaced with :
makes
the
Possible spelling mistake found.
DeFi
space
This phrase/word is too simple and can be replaced with:
very
competitive as the developers
are forced
to build the best possible product.

This phrase/word (depending on the context) can be potentially replaced with :
Today
, the total market cap of
You use this word too often, consider replacing it with
decentralized
You use this word too often, consider replacing it with
finance
is over $130 billion. There are scores of
Possible spelling mistake found.
DeFi
You use this word too often, consider replacing it with
applications
in the market, including
Possible spelling mistake found.
Aave
,
Possible spelling mistake found.
MakerDAO
, Compound, and
Possible spelling mistake found.
Uniswap
.
Traditionally
Possible spelling mistake found.
DeFi
You use this word too often, consider replacing it with
applications
were built
on Ethereum Blockchain.
This phrase/word is too simple and can be replaced with:
But
This phrase/word (depending on the context) can be potentially replaced with :
now
, they
also
run on other platforms such as
Possible spelling mistake found.
Binance
Smart Chain, Avalanche, etc.

The
first
time
You use this word too often, consider replacing it with
people
could do much more with their
You use this word too often, consider replacing it with
money
than
This phrase/word (depending on the context) can be potentially replaced with :
send
it from point a to b was when
Possible spelling mistake found.
MakerDAO
launched in December 2017. Users could
This phrase/word (depending on the context) can be potentially replaced with :
use
Ether cryptocurrency as collateral and borrow
Possible spelling mistake found.
MakerDAO
's
Possible spelling mistake found.
Dai
Possible spelling mistake found.
stablecoin
.
Possible spelling mistake found.
Dai
is pegged
1-to-1 to the value of the US dollar. More on
Possible spelling mistake found.
MakerDAO
in future posts.

The term
Possible spelling mistake found.
DeFi
was coined
in August 2018. In a conversation on a Telegram channel,
Possible spelling mistake found.
Inje
Possible spelling mistake found.
Yeo
of Set Protocol suggested
Possible spelling mistake found.
DeFi
, along with other names such as
You use this word too often, consider replacing it with
Open
Horizon, Lattice Network, and
You use this word too often, consider replacing it with
Open
Financial Protocols. Blake Henderson of 0x put his seal of approval on
Possible spelling mistake found.
DeFi
since he felt the word sounds like
Use a smart opening quote here: "“".
"
DEFY.
Use a smart opening quote here: "“".
"


Though the future looks bright for
You use this word too often, consider replacing it with
decentralized
You use this word too often, consider replacing it with
finance
, it is not there quite
yet
You use this word too often, consider replacing it with
today
. Not all
You use this word too often, consider replacing it with
applications
running on
You use this word too often, consider replacing it with
decentralized
platforms are
fully
You use this word too often, consider replacing it with
decentralized
. Several of them are
centrally
controlled to
This phrase/word is too simple and can be replaced with:
some
degree,
especially
those in the early stages. Most apps conform to
Use a smart opening quote here: "“".
"
Open
Use a smart closing quote here: "”".
"
You use this word too often, consider replacing it with
finance
rather
than
Use a smart opening quote here: "“".
"
Decentralized
Use a smart closing quote here: "”".
"
You use this word too often, consider replacing it with
finance
since they
This phrase/word (depending on the context) can be potentially replaced with :
allow
anyone to
This phrase/word (depending on the context) can be potentially replaced with :
join
.
This phrase/word is too simple and can be replaced with:
But
similar to the growth of the internet,
Possible spelling mistake found.
DeFi
will
This phrase/word is too simple and can be replaced with:
soon
mature and become
fully
You use this word too often, consider replacing it with
decentralized
, ushering a
You use this word too often, consider replacing it with
new
chapter in the world's economic history.
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IELTS essay An Introduction To Decentralized Finance

Essay
  American English
10 paragraphs
744 words
6.0
Overall Band Score
Coherence and Cohesion: 5.5
  • Structure your answers in logical paragraphs
  • ?
    One main idea per paragraph
  • Include an introduction and conclusion
  • Support main points with an explanation and then an example
  • Use cohesive linking words accurately and appropriately
  • Vary your linking phrases using synonyms
Lexical Resource: 5.0
  • Try to vary your vocabulary using accurate synonyms
  • Use less common question specific words that accurately convey meaning
  • Check your work for spelling and word formation mistakes
Grammatical Range: 6.5
  • Use a variety of complex and simple sentences
  • Check your writing for errors
Task Achievement: 6.0
  • Answer all parts of the question
  • ?
    Present relevant ideas
  • Fully explain these ideas
  • Support ideas with relevant, specific examples
Labels Descriptions
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    Currently is not available
  • Meet the criteria
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