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Why DeFi MattersDeFi is really f*cking scary. But it’s the fastest growing industry in the world. You do not want to fall behind the 8 ball. Read this 4 minute page to stay ahead of the curve:
A Quick Definition
DeFi (aka decentralized finance) aims to be today’s financial system with code replacing institutions.
*It won’t completely replace traditional finance. But, many aspects of it will be disrupted.
In DeFi, blockchains (and smart contracts) replace the financial institution as the middleman who guarantees a transaction will happen (ex: a loan will be paid). Smart contracts are public for anyone to inspect and audit, keeping users accountable from writing bad contracts.
Now let’s tie it all together with an analogy:
- The blockchain – establishes a common truth & is the backbone to everything else
- The assets – like $ in today’s economy it incentivizes, facilitates, & connects everything
- The smart contracts– code that provides functionality & does the behind-the-scenes work
- The applications – the finished products that users interact with
What’s the difference between DeFi & TradFi?
(source: Ethereum Foundation)
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DeFi 101 in 15 minutesNext:
Why DeFi Matters