What is #DeFi? A guide to decentralized finance

pakhitheboss

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Quote from: -CryptoViking- on July 16, 2020, 07:31:21 AM

Quote from: joniboini on July 16, 2020, 01:54:52 AM

Quote from: -CryptoViking- on July 16, 2020, 01:33:58 AM

But after all Defi was not "invented" to serve as a loan, maybe in the start, but now there a lot more uses.

Such as?

Well if we are talking about the end user, it is all about some form of lending to be honest, but it will become more useful platform with time and it will help some projects to become reality that won't be focused on lending and various forms of lending.

DeFi is not only lending but it also focuses on borrowing, algo trading and creating synthetic assets. Defi in my opinion is currently very hyped and after few years this bubble will burst. Saturation point will come one day. If you are an investor and want to earn good profit then you should invest in DeFi.

The top highest ROI generating DeFi tokens are still below $5. You can still ride on the the top 5 to make some good profit before this year ends.

-CryptoViking-

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Quote from: joniboini on July 16, 2020, 01:54:52 AM

Quote from: -CryptoViking- on July 16, 2020, 01:33:58 AM

But after all Defi was not "invented" to serve as a loan, maybe in the start, but now there a lot more uses.

Such as?

Well if we are talking about the end user, it is all about some form of lending to be honest, but it will become more useful platform with time and it will help some projects to become reality that won't be focused on lending and various forms of lending.

mk4

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Quote from: joniboini on July 16, 2020, 01:54:52 AM

Quote from: -CryptoViking- on July 16, 2020, 01:33:58 AM

But after all Defi was not "invented" to serve as a loan, maybe in the start, but now there a lot more uses.

Such as?

You know, like collecting and breeding digital cats(cryptokitties), buying virtual make believe land(decentraland), pyramid schemes(forsage), and such. You're missing out on Ethereum DeFi bro! This is the future of finance! /s

#DeFi
#Bankless
#Ethereum
#Decentraliezed

But in all seriousness, I don't know either. 🤷‍♂️

joniboini

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Quote from: hatshepsut93 on July 16, 2020, 12:57:22 AM

From a practical point of view, DeFi is useless for a person that needs to borrow some money to pay their last bill a few days before they payday. If they had crypto to put as collateral, they could just sell it instead.

I always think that those who took loans from this platform are using it for trading or stuff like that, as most protocols are, as they said, require you to lock some tokens etc.

Quote from: -CryptoViking- on July 16, 2020, 01:33:58 AM

But after all Defi was not "invented" to serve as a loan, maybe in the start, but now there a lot more uses.

Such as?

-CryptoViking-

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Quote from: hatshepsut93 on July 16, 2020, 12:57:22 AM

Quote from: -CryptoViking- on July 16, 2020, 12:11:55 AM

There is always a collateral. If you loan from a loan shark your life, teeth, legs or your family is collateral for example. If you loan from bank then your property or any other holdings are your collateral. There is no legit bank in the world that will lend you funds if you don't have some kind of collateral.That is usually a level of your salary, your credit rating etc.

So your last point makes no sense. I agree that Defi is overhyped at the moment, but it's not all rotten in the state of Denmark.

What you are describing isn't a collateral, it's debt collection. A collateral is something that you put before taking a loan, a debt is what happens when you default on a loan. There's a huge difference here, because collateral can very easily be seized in most cases, while debt collection needs to go through the court, and the creditor might never fully recover it.

From a practical point of view, DeFi is useless for a person that needs to borrow some money to pay their last bill a few days before they payday. If they had crypto to put as collateral, they could just sell it instead.

Ok, you are technically right, collateral and debt are not the same and when it comes to seizure, process is completely different kind of animal. But not all debt collection goes through court and not in all countries. In 80% of cases that debt collection and court is mere formality, so we are both in the right if you ask me.

But after all Defi was not "invented" to serve as a loan, maybe in the start, but now there a lot more uses.

hatshepsut93

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Quote from: -CryptoViking- on July 16, 2020, 12:11:55 AM

There is always a collateral. If you loan from a loan shark your life, teeth, legs or your family is collateral for example. If you loan from bank then your property or any other holdings are your collateral. There is no legit bank in the world that will lend you funds if you don't have some kind of collateral.That is usually a level of your salary, your credit rating etc.

So your last point makes no sense. I agree that Defi is overhyped at the moment, but it's not all rotten in the state of Denmark.

What you are describing isn't a collateral, it's debt collection. A collateral is something that you put before taking a loan, a debt is what happens when you default on a loan. There's a huge difference here, because collateral can very easily be seized in most cases, while debt collection needs to go through the court, and the creditor might never fully recover it.

From a practical point of view, DeFi is useless for a person that needs to borrow some money to pay their last bill a few days before they payday. If they had crypto to put as collateral, they could just sell it instead.

-CryptoViking-

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Quote from: hatshepsut93 on July 15, 2020, 11:16:11 PM

Quote

Security — There's a lot of value on the table when using financial services. Your personal data — not to mention money — is placed in the hands of centralized organizations that can be hacked, robbed, or deceived by well-placed insiders acting maliciously.

Hilarious to read this in the light of the recent DeFi hacks. Plus we all know how common are the various crypto hacks, malware and scams. And victims have literally zero chance of seeing their money again. With centralized systems, the breach can be quickly reacted to and stopped, funds can be returned in some cases, as transactions are mutable and non-permanent.

Quote

Decentralized Finance Use Case #1 — Cryptocurrency Loans

People take loans because they don't have money, and in traditional finance loans without a collateral is the most common type of loan. DeFi fails to provide this crucial part of finance.

These things, among many others mean that DeFi is as overhyped as blockchain. Newbies should really be careful before they put their money in it.

There is always a collateral. If you loan from a loan shark your life, teeth, legs or your family is collateral for example. If you loan from bank then your property or any other holdings are your collateral. There is no legit bank in the world that will lend you funds if you don't have some kind of collateral.That is usually a level of your salary, your credit rating etc.

So your last point makes no sense. I agree that Defi is overhyped at the moment, but it's not all rotten in the state of Denmark.

hatshepsut93

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Quote

Security — There's a lot of value on the table when using financial services. Your personal data — not to mention money — is placed in the hands of centralized organizations that can be hacked, robbed, or deceived by well-placed insiders acting maliciously.

Hilarious to read this in the light of the recent DeFi hacks. Plus we all know how common are the various crypto hacks, malware and scams. And victims have literally zero chance of seeing their money again. With centralized systems, the breach can be quickly reacted to and stopped, funds can be returned in some cases, as transactions are mutable and non-permanent.

Quote

Decentralized Finance Use Case #1 — Cryptocurrency Loans

People take loans because they don't have money, and in traditional finance loans without a collateral is the most common type of loan. DeFi fails to provide this crucial part of finance.

These things, among many others mean that DeFi is as overhyped as blockchain. Newbies should really be careful before they put their money in it.

Luzin

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I think there is a lot of discussion about DeFi, your article is quite interesting for new people, this is very useful. See my link here https://bitcointalksearch.org/topic/m.54651049 @OcTradism has discussed some references to DeFi data or like coinmarketcap Defi. I think you can add this data to your blog, this will be more interesting. Apart from that I read a few attacks about DeFi, example
1. April 19, Chinese DeFi protocol dForce suffered an attack resulting in 99.95% of funds locked on its Lendf.me platform being drained by hackers,
2. Decentralized finance (Defi) protocol Balancer was on Sunday hacked for more than $450,000 worth of cryptocurrency.
I think you can add too.

mk4

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Quote from: crabby on July 15, 2020, 03:19:23 PM

Let me know if you have any questions! I'm looking forward to the discussion.

Here's a question for you. Despite the name "Decentralized Finance", do you actually think that these projects are actually decentralized? 🤔

P.S. You definitely need to mention and give emphasis on the risks of "defi".

crabby

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Hi Everyone!

As the world transitions towards digital assets, investors will all be asking "What is #DeFi?". To help provide some answers, I just published a blog post that digs into the details of DeFi and how it will change the financial system.

What is #DeFi?

Let me know if you have any questions! I'm looking forward to the discussion.

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