What is coin defi? The basics of decentralized finance (Defi)

What is coin defi? One of the components of the very HOT trend in the crypto (cryptocurrency) market in early 2020. There were a lot of people who invested in the coins in the Defi group and received returns of up to 22000%, which is really terrible. So what is the nature of defi coin? Let’s find out with cryptocurrencyin4 in this article.

coin defi

1 – What is coin defi?

Coin defi means a cryptocurrency belonging to the group defi. Issued in the form of decentralized finance (not under the management of powerful individuals or organizations).

So what is defi? We will learn together below.

If you do not understand what crypto is, please read through this article:

See also: >> what is crypto? Complete knowledge for newcomers to investing

2 – The coin defi opportunities were extremely profitable in the past

Before we go into the concept of what defi is, let’s take a look at the coin defi opportunities that have brought huge returns to investors.

LINK (Chainlink): as of May 2019, LINK is worth $ 0.5 – 2/2021 worth increasing to $ 34. Equivalent to x68 times.

coin defi

RUNE (THORChain): 5/2020 is worth $ 0.1 – 4/2021 worth increasing to $ 12. Equivalent to x120 times.

coin defi

This is just a typical example of the 2 coins in the defi group, there are many other defi coins with more massive increases in value.

If in the past you bought defi coin at a good price, now you have increased your assets quite a lot. Surely looking through the two above opportunities you will be very regretful.

But not everyone who invests in the market multiplies wealth, if you do not have knowledge, your assets will be divided, even lost.

You need to have a mindset about investing in the crypto market, to be able to grasp when to buy, when not to buy.

Okay, now we are going to find out what the revelation defi is

3 – What is the concept of Defi?

Defi stands for Decentralized finance, utilizing transparent blockchain technology to develop.

“Decentralized” means not being controlled by powerful individuals or organizations at all.

And “centralized” means being managed by powerful individuals or organizations, which leads to their full control over, pricing, control, and other negative issues.

With defi decentralized finance, activities such as savings deposit, borrowing, lending, bill payment, transaction, … are automatically processed through smart contracts of the platform. blockchain.

Còn đối với tài chính tập trung thì những hoạt động này sẽ được xử lý bởi con người thông qua 1 đơn vị trung gian thứ 3. Ví dụ: ngân hàng.

4 – Components in Defi’s ecosystem

In defi ecosystem, there are many different applications, not only coin. Let’s take a look at the ingredients in the ecosystem below.

Decentralized Stablecoin (Stablecoin 2.0): with stablecoins such as USDT, TUSD, … previously, they were mortgaged by centralized assets such as US dollar or gold.

As for the Decentralized stablecoin, it is collateralized by other cryptocurrencies. Typically the copper MKR (MarkerDAO), KAVA, …

Decentralized lending and borrowing: decentralized lending and lending platform.

Decentralized insurance: Application user insurance in the Defi ecosystem.

DEX (Decentralized exchange): decentralized crypto exchange. Typically: Uniswap, PancakeSwap, …

coin defi

Other projects in the ecosystem: Liquidity mining (making profits by liquidating coins for exchanges), Decentralized oracle (data-realtime provision system for smart contracts and blockchain), Decentralizaed derivative (derivative products decentralized), …

5 – Projects to build the Defi ecosystem

There are large organizations that have built very successful defi ecosystem-based projects such as coinbase ventures, binance smart chain, etc.

5.1 – Coinbase ventures

Crypto exchange coinbase has shown a series of Defi investment projects in their portfolio such as: Compound, BlockFi, Dharma, …

coin defi

5.2 – Binance smart chain

Binance has focused on developing their own blockchain project, the Binance Smart Chain (BSC). After that, there were many defi projects with strong growth on their BSC such as: PancakeSwap (CAKE), Bakery (BAKE), …

5.3 – Huobi finance chain

Houbi finance chain was mentioned in 2019 but not too many people were interested in it at that time. When the Public beta was released in conjunction with another platform’s CKB blockchain (Nervos), it was at this time that the community paid much attention.

5.4 – Solana

Serum (SRM) is one of the Dapp Defi applications located in the growing solana ecosystem.

6 – Conclusion

By reading this, you must also understand Coin defi is a cryptocurrency belonging to the group defi. Issued in the form of decentralized finance.

Actually, knowledge in this Defi array has a vast sea, in an article like this can not be shared with you. If you want to invest in Defi then you should proactively learn more about it.

Thank you for reading the article!

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