Decentralised Finance — or DeFi — has recently emerged, challenging traditional financial systems and reshaping the way we think about banking, lending, and investing.
In this article, we will look at the world of DeFi, exploring its roots, and the data that fuels its growth.
Understanding DeFi
At its core, DeFi is about decentralisation — as opposed to the traditional centralised banking model.
Instead of relying on intermediaries like banks, it leverages blockchain technology to create an open and permissionless financial system.
This means anyone with an internet connection can participate without needing approval from a central authority.
Decentralised Applications (DApps)
One of the key components driving the DeFi movement is the rise of Decentralised Applications or DApps.
These are software applications built on blockchain technology, which provides financial services without the need for traditional intermediaries.
DApps offer a wide range of functionalities, which range from lending and borrowing to trading and insurance.
Data-Driven DeFi
The success of DeFi hinges on data — vast amounts of it.
Transparent and immutable blockchain ledgers allow for the seamless recording and verification of transactions.
This data-driven nature not only ensures trust but also enables participants to audit and verify the entire financial system.
Yield Farming
Yield farming is a term that is used within the DeFi space.
It involves lending or staking crypto assets to earn rewards in the form of additional tokens.
The concept is simple: users provide liquidity to a decentralised protocol, and in return, they receive a share of the…
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