When it comes to the impact of Defi economy on the rest of the crypto world, the result would be quite immersive, leveraging open source software and composable frameworks, DeFi allows anyone in the world to utilize financial services in a trustless and transparent manner while eradicating links between any intermediaries like banks and other financial bodies.
The Defi ecosystem has been unresistible since the start of 2020, Institutional and retail investors have invested billions of dollars in Defi projects. The Defi space has been a catalyst to the crypto world following the COVID-19 market crash in mid-march.
I will be discussing the top projects in the defi world, its infrastructure, mode of operation, and consensus mechanism.
Just (JST) is the JustSwap decentralized platform that allows for the seamless exchange of TRC20 tokens in a manner similar to Ethereum’s UniSwap. These swaps are instant and executed at system price at the expense of low transaction fees, however, liquidity providers are thus incentivized and rewarded with transaction fees for providing liquidity on the network. This protocol ensures complete decentralization and a safe transacting group for investors who wish to stake their assets in the liquidity pool. one of the most exciting things about the just program is that you earn your profits passively as a liquidity provider. All the transactions fees charged on all trades and swaps go directly to liquidity providers of the protocol, rather than the protocol itself.
Who is a liquidity provider:
A liquidity provider is someone who leverages a portion of his assets, it could be on a particular trading pair, he stakes his assets on the network as a market maker in exchange for the transaction fees paid by the users in the network. As a liquidity provider, he leverages his funds in the network for a portion of the transaction fees in the network. A number of liquidity providers may decide to merge their assets to the a single provider, they leverage it on the protocols and receive a higher liquidity share for their leveraged tokens. This step arms the pool with better returns. This is a very smart way to gain returns in your investment by simply leveraging your assets in breach proof protocol.
However, there may be so many liquidity providers in a pool with the different leveraged amount, how will the transaction fees be shared among the many liquidity providers. Leveraged share is equal to the transaction fee share received. For example, a total liquidity pool of 1,000,000Trc20 token. Total liquidity pool=1,000,000Trc20 A single liquidity provider(A) leveraged =10,000Trc token. And a total transactions fee of $500 over a 24hr timeframe. Mr (A) will receive 1% of the total transactions fees charged over the 24hr timeframe. This is so because his leveraged value is 1% of the total leveraged value by the pool of liquidity providers. So Mr (A) will recieve 1% of $500, which is $5 worth of TRC toketoken.
How to join just liquidity pool.
Click on the pool icon to enter liquidity pool interface.
Click on add liquidity icon on the interface.
Select your preferred assets and make the transaction.
<centempound Finance (COMP)
COMP is an ERC20 token of the Compound Finance DeFi platform that empowers community governance of the Compound protocol. Holders of COMP and their delegates can debate, propose, and vote for changes on the protocol.
The Compound protocol operates mainly as a lending and borrowing platform of Ethereum tokens through a decentralized market with lenders earning interest on their crypto and borrowers paying interest to borrow. The compound protocol will operate without any intermediaries in a, seamlessly connecting lenders on the platform with interested parties. Users can borrow crypto assets, using any other supported asset as collateral allowing the trader a number of options on which token is best suited for his repayment. He's able to achieve this flexibility cause the protocol supports the repayment of browned funds with virtually any ERC20 supported token.
The protocol currently supports lending and borrowing of Ox (ZRX), Augur (REP), Basic Attention Token (BAT), DAI, Ethereum (ETH), USD Coin (USDC), Tether (USDT), and Wrapped Bitcoin (WBTC).
Borrowers can only participate in the compound protocol if there are liquidity providers. These stake their tokens or assets on the network and acculumate steady interests from his staked asset. When users and applications supply an asset to the Compound protocol, they begin earning a variable interest income instantly. Interest accrues every Ethereum block which is created approximately every 15 seconds and users can withdraw their principal plus interest anytime.
Alternatively, users could merge their assets to form a large pool of liquidity providers they collectively stake the merged assets that are available for other users to borrow, and they share in the interest that borrowers pay back to the pool.
When users supply assets, they receive cTokens from Compound in exchange. cTokens are ERC20 tokens that can be redeemed for their underlying assets at any time. As interest accrues to the assets supplied, cTokens are redeemable at an exchange rate (relative to the underlying asset) that constantly increases over time, based on the rate of interest earned by the underlying asset.
At the time of writing this, the COMP token is available for trading on the following crypto exchanges.
- ProBit Exchange
- Loopring Exchange
- ProBit Exchange
- Coinbase Pro
Yearn Finance (YFI)
Yearn Finance is a gateway to various DeFi products. It opens up the gateway for limitless defi prospects and projects. And given that DeFi now has nearly $8 billion in crypto assets committed to it, mainstream traders could start rolling in any day. Yearn Finance is an interestingly unique project that is set out to simplify defi investment and yield farming.
According to Jesse Walden of Variant Fund "The unifying goal of all Yearn products is to create this simple intuitive interface to all of DeFi.”
With a circulating supply of 29,961 YFI, Yearn finance has taken the crypto-verse by storm. Due to demand, the value of the token has managed to skyrocket past Bitcoin’s current value of around $12k. YFI is trading at $17,000 and after hitting an all-time high value of $43,900 as at the time of writing this post. Crowning it as the best performing defi asset of the year with an ROI(Return of investment) of 1,517%.
Additionally, Yearn’s decentralized ecosystem aggregates lending services such as Aave, Compound, DyDx, and Fulcrum to optimize token lending. Depositing funds into Yearn means that they are rebalanced to choose the most profitable lending service. Yearn Finance is particularly aimed at investors who do not have time to study the complexity of defi projects, Yearn Finance provides a better returns scheme for investors with little knowledge about defi. so if you wish to yield returns on your investment without worrying about the complexity of the investment, yearn Finance is surely the program for yor you.
SteempowerSteockchain-based soain based social media platform that rewards users with the native asset for creating value or insider words creative content onIn steemit autheeemit authors and curators are rewarded both for making creative content and curating creative However, the ste the steemit platform can also act like a defi project when it comes to the main core if the platform steempower. Steempower is just liquid steem that is powered up and stake in individual wallets of authors. This SteemPower gives many advantages fits to the user - luser - like resources to interact with the blockchain, say in decision making, selection of witnern from the inflatioinflation pool through upvotes, plus a 2.5% APR passing. However, if this stethis steem was to be withdrawn the asset will take a periweeks in 4 equated installments.
owtsever, if inve investors could delegate or loan some of his steem and receive returreturns each day for his delegsp. The number of retu returns received lies solely on the amount of sp delegated.
Steem can become a fullcentralized defi efi and this reality is washing closer just 2 months ago steem had partnered with the just protocol.
And currently there we have Wst(wrapped steem) actively trading in the justwasp trading protocol. This opens the door for limitless oortunity for steeeem holders to integte into the Tron defi fut.
ConclusionI strongly belibelieve that thei future is very bright and once again endorse just protocol as best in in the Tron systnd a challenger to the Ethereum networtwork.
This post was made in response to #steemcryptochallenge, week-2- diving into Defi.