🤔 Why DeFi? 🤔
The most important thing to understand about Defi is that it’s decentralised. Another term for this is “permissionless”. Moreover, because it’s built on a public ledger, it is completely transparent. DeFi is governed entirely by code. The rules of the code are clearly defined and open for everyone to see. It’s also open 24 hours a day, 7 days a week and every single day of the year. There are a number of different use cases for Defi. These range from lending to porfolio management and trading on Decentralised Exchanges (or DEXs).
1️⃣ Synthetix 1️⃣
Synthetix is a decentralied synthetic asset issuance protocol that was built on the Ethereum protocol. This basically means that users are able to mint synthetic representations of real world assets as tokens which track the value of said asset 1 for 1. A simple example of this would be the sUSD token which is designed to track the value of the US dollar one-for-one. What’s really interesting about Synthetix is that you can create these token derivatives on a number of real world assets as well. These include the likes of other fiat currency, commodities, indexes and of course – equities. What’s even better about this is that these are ERC20 tokens. This means that they can be taken off on the Synthetix exchange and held in your own wallet
2️⃣ UMA 2️⃣
UMA allows its users to create trustless contracts on anything that has a price. These are all enforced through immutable smart contracts that minimize the use of off chain oracle price feeds. The protocol allows two counterparties to structure a trade without the need for any sort of clearing house or exchange. The smart contracts will automatically adjust the margin of each party. You can easily structure these based on share prices. You could create your own bespoke options contracts for example with defined payouts.
3️⃣ Serum 3️⃣
Serum is a decentralised derivatives exchange that is built on Solana. So, by being built on Solana, Serum could perhaps be one of the the fastest and cheapest DEX protocols yet. The Serum DEX currently features around 30 different cryptocurrency markets, all which trade against either USDT or USDC. While these are cryptocurrencies, anyone can create their own market on Serum. It’s completely permissionless. It’s all speculation on my part though, but I would love to see tokenized equities traded on Serum.
4️⃣ Injective Protocol 4️⃣
The Injective Protocol is a decentralised derivative exchange that is built on Cosmos. Injective is a layer 2 cosmos zone and hence does not have to put up with the congenstion that other Ethereum based Dex’s do. Hence, it’s much faster, more effecient and cheaper. It’s a Dex protocol that will allow users to trade spot, swaps and futurs in a completely permissionless way. Injective is perhaps the newest Dex protocol on this list and as such, they are still in Testnet phase. They have already launched Equity contracts on the likes Tesla, Amazon and Gamestop. This is the first Dex that I have actually seen launching single stock equity contracts
📜 Disclaimer 📜
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading Forex, cryptocurrencies and CFDs poses considerable risk of loss. The speaker does not guarantee any particular outcome.