HOW TO BE PROFITABLE IN DeFi SPACE

There are so many ways people could get the capital to start up their business in web2, that's our day to day life.

Let me tell you a story of a friend of mine, Brent.

About two years ago, Brent a vibrant young man had a business idea but lacked capital to fund it due to his financial struggles.

He had gotten some funds from his inner circle but didn't want to seek help from his family.

As a last resort, he had to get a loan from his local bank.

On reaching the bank, he asked for the requirements to obtain a loan which he met and the last portion, a COLLATERAL.

Brent was told he had to bring a collateral, be it a landed property or a building in his possession so the bank could see him as a worthy borrower.

He then provided a landed property his parents had bought in his name, to the bankas his collateral.

After this, they saw that the value of the property was more and agreed to fund the loan for the young man.

Just the same way, we can have access to loans in the web 3 space.

Want to know how this is possible?

\>> This is made possible via LENDING PLATFORMS

A lending platform in the web3 space is a platform that allows users to borrow or lend assets, such as crypto tokens, using smart contracts on a blockchain.

Some examples include Compound, MakerDAO, Aave, and dYdX.

Have you heard of any of those?

Nope?

Let's glance through them… Ready, let's go ✅

✓Let's start with COMPOUND:

It's a decentralized lending platform that allows users to borrow or lend assets without the need for a middleman.

•It uses smart contracts to automate the lending process, and it offers a range of assets that can be used as collateral, including:

• ETH

•DAI

•USDC and more.

•It also has a governance token, COMP, which can be used to vote on changes to the platform.

✓Moving on to AAVE:

It's another decentralized lending platform that offers similar features to Compound, but it has some unique features, too.

•One of its main features is that it allows users to borrow more than the value of their collateral. It also offers flash loans, which are loans that must be repaid within the same transaction.

•It also has a governance token, AAVE, which can be used to vote on changes to the platform.

✓Okay, let's move on to MakerDAO:

It's a little different from the other platforms we've discussed so far.

•It's a decentralized autonomous organization (DAO) that's built on the Ethereum blockchain. It allows users to create, manage, and trade a type of stablecoin called DAI.

•DAI is a collateral-backed stablecoin that's designed to be resistant to price fluctuations. It can be used for things like lending, borrowing, and trading.

✓Lastly, dYdX:

It's a decentralized exchange (DEX) that allows users to trade a range of assets, including ETH, DAI, and USDC.

•It also allows users to borrow and lend assets, similar to the other platforms we've discussed.

•The big difference is that dYdX is specifically designed for margin trading, which means users can leverage their positions to increase their potential profits (or losses).

I hope you had a lovely read and would leverage on these to have a beautiful experience in the web3 space.

Stay safe and till our next article, keep winning 🥂.