It would not be strange to say 2020 is the year of Defi.
Based on the emergence of large DeFi projects such as Compound and Maker Dao, and the explosive growth rate, it has shown a terrifying growth trend.
De-Fi (Decentralized Finance)
DeFi is a cryptocurrency financial service such as cryptocurrency loans and deposits executed by smart contracts on the blockchain. You can use financial services using cryptocurrency in the DeFi ecosystem without going through financial institutions such as banks. The total deposits of DeFi projects rose 8650% from $400 million (about 475 billion won) in August last year to $35 billion (about 40 trillion won) last month.
Uniswap is known as a representative DeFi project by thoroughly deintermediating transactions between cryptocurrency assets. Uniswap is a platform that allows users to exchange crypto assets through P2P (individual) transactions by supplying liquidity between users. When liquidity providers fill the pool with tokens, the transaction is concluded by taking the tokens from the users who need them. Thanks to its easy and convenient transaction method, Uniswap has garnered great attention and has established itself as a representative DeFi project.
2. yEarn Finance
yEarn Finance is a large-scale project with around 8 billion cryptocurrency assets as a portal to various DeFi products. The goal of the integration of all yEarn Finance products is to create a simple and intuitive interface for all DeFi, project officials said. Earn allows users to deposit multiple stablecoins such as DAI, USDC, USDT, TUSD, sUSD and wBTC, and Vaults allows users to deposit cryptocurrencies and earn revenue in return. It has many users as a major product of annual finance.
3. Maker Dao
Maker DAO is a lending platform that allows users to borrow stablecoin DAI linked to US dollars. As a feature of governance stability, Dai uses cryptocurrencies such as some Ethereum-based tokens (ERC-20), including BAT, as collateral. When the Ethereum price falls below a certain line, the borrowed DAI is penalized and sold. Even though the price of Ethereum, which is currently used as collateral, has dropped by nearly 80% from a year ago, the price stability of DAI against the dollar is maintained.
CURV is the industry’s first cloud-based institutional digital asset wallet service provider. It is a decentralized exchange for stablecoins, with features that make traders experience little decline and liquidity providers do not lose money. Through Curve, stablecoins trade directly with each other, paying only one set of transaction fees (currently 0.04%). Curve’s unique institutional-grade policy engine has gained popularity for providing complete visibility and control over digital wallets.
Ducato is a token that supports building a hybrid DeFi ecosystem through its own lending, deposit, wallet, and liquidity services within Delio’s digital asset ecosystem, and making it easy to issue synthetic assets and operate derivatives. Delio DUCATO has a high reputation and market share in Korea so that it was introduced as the largest DeFi service in Korea in the ‘DeFi Report’ published by the Ministry of Science, Technology and Communication of the Korean government in January. It has the advantage of being the largest company with over $1.5 billion TVU (Total Value Utilized) in Korea.
AVEE is a system that allows cryptocurrency holders to borrow assets to earn interest. The customer borrows other crypto assets as collateral for the asset and pays interest on it. The interest rate charged depends on the “utilization rate” of the assets in the pool, and if almost all of the assets in the pool have been used, the rate will be higher to encourage liquidity providers to deposit more funds. In addition, Flash Loan is unique in that it does not require collateral, so it simply depends on the timing of the loan payment. With these features, AVEE is also receiving a lot of attention in the current market.
Looking at these rapidly emerging DeFi projects, many argue that ‘digitalization of assets’ will be the future of the DeFi ecosystem.
As growing interest on Defi market and DeFi ecosystem, users need to research on their own Defi product and use it carefully.
[DUCATO Official Websites]
[Delio Official Websites]
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