Mark Cuban recently hailed the DeFi economy as the ‘next great growth engine’
To keep up with emerging technology, he is always reading and learning new things. From AI to cryptocurrency and the technology that surrounds it – blockchain and NFTs
Here is a 101 beginner’s thread to DeFi
#1What : Decentralized finance, or DeFi, is a system of applications that aim to recreate traditional financial instruments with cryptocurrency
#2DefiApplications : Think of them as smartphone apps but they come built in with smart contracts. They run on Ethereum blockchain (Ether as the native currency)
#3WhataretheUsecases : Borrowing and Lending.
″[T]o borrow money, I have to be overcollateralized with my bank. I’ve got to call somebody. I’ve got to do a DocuSign, or sign something, [and] it’s got to get approved at multiple levels – …. it’s a hassle.
The [bank] fees are ridiculous as a percentage,” Cuban said. But, in ”[o]wning a crypto asset, whether it’s bitcoin or Ethereum, I can do my own banking and it’s very friction-free, very straightforward and fast. That lack of friction is the game-changer.”
#4YieldFarming : Is the other DeFi use case. It is the process of constantly lending and borrowing crypto to take advantage of the best interest rates – or “the search for passive income on crypto-assets,”
#5Risks : “DeFi is highly experimental and exists in a regulatory grey zone,” as The Financial Times reported. “And as with elsewhere in the cryptocurrency sphere, there are risks of scams.”
And where does this stand closer home?
DeFi Alliance, an international trade association for decentralized finance, has announced its India chapter
The development also comes at a time when Indian developers in the blockchain and crypto space are attracting global attention after the success of Polygon and Instadapp.
Thoughts?
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Additional sources
https://www.cnbc.com/2021/03/17/mark-cuban-learn-about-defi-nfts-cryptocurrency-like-eth.html
https://www.cnbc.com/2021/04/01/mark-cuban-on-his-crypto-portfolio-i-own-ethereum-ether-and-bitcoin.html
Cuban’s Blog :
The Brilliance of Yield Farming, Liquidity Providing and Valuing Crypto Projects
#DeFi
#technologiesofthefuture
#finance