DEFI Protocols

I made over $100 just by interacting with a Defi Protocol

People are still bagging $$ even in the bear market

But 70% can’t tell what a defi protocol is

This article contains a full guide on everything you need to know about Defi Protocols

{+ how to make the most from it}

→ Follow Olajumoke Abimbola

𝐊𝐞𝐲 𝐏𝐨𝐢𝐧𝐭: 𝐃𝐞𝐟𝐢 = 𝐃𝐞𝐜𝐞𝐧𝐭𝐫𝐚𝐥𝐢𝐳𝐞𝐝 𝐅𝐢𝐧𝐚𝐧𝐜𝐞

Let’s continue… shall we?

𝐖𝐡𝐚𝐭 𝐚𝐫𝐞 𝐃𝐞𝐟𝐢 𝐏𝐫𝐨𝐭𝐨𝐜𝐨𝐥𝐬?

Defi Protocols are smart contracts or decentralized applications that provides financial services

Financial services include but is not limited to:

→ Trading

→ Lending and Borrowing

→ Betting

→ Yield Farming

They’re the backbone of Decentralized Finance

Currently we have over 10,000 protocols but I am going to mention just few

→ Decentralized Exchanges: They allow users to swap or trade cryptocurrencies without the need for a third party

Each Blockchain has their own DEXes

Binance - PancakeSwap, Biswap

Ethereum - Uniswap, DYDX

Fantom - Spiritswap, Spookyfi

Solana - Raydium, Saber

→ Stablecoin Protocols: They focus on creating and maintaining stable-value digital assets

A good example is MakerDAO

→ Yield Farming and Liquidity Provision: This allows users to provide liquidity to decentralize exchanges or yield farming platforms in exchange for rewards

A good example is Yearn Finance and Curve

→ Lending and Borrowing Protocols: This allows users to lend their assets while earning interests on them

It also allows users to borrow other crypto assets by providing collaterals

A good example is Compound and AAVE

→ Oracle Protocols: This ensures that smart contracts can react to external events by providing them with real world data

Chainlink is a good example of this

𝐎𝐭𝐡𝐞𝐫 𝐃𝐞𝐟𝐢 𝐏𝐫𝐨𝐭𝐨𝐜𝐨𝐥𝐬

→ Crosschain Protocols

→ Prediction Markets

→ Insurance Protocols

→ Asset Tokenization and Token Management

𝐁𝐞𝐧𝐞𝐟𝐢𝐭𝐬 𝐨𝐟 𝐃𝐞𝐟𝐢 𝐏𝐫𝐨𝐭𝐨𝐜𝐨𝐥𝐬

→ Transparency

→ Easily accessible to anyone with the internet

𝐑𝐢𝐬𝐤𝐬 𝐀𝐬𝐬𝐨𝐜𝐢𝐚𝐭𝐞𝐝 𝐰𝐢𝐭𝐡 𝐃𝐞𝐟𝐢 𝐏𝐫𝐨𝐭𝐨𝐜𝐨𝐥𝐬

→ Smart contracts are liable to hacks resulting in a compromise

→ Defi Protocols might be complicated for new users

𝐏𝐫𝐨 𝐓𝐢𝐩

How I made $100

→ Look out for a protocol that interests you

→ Search for projects under that protocol

→ Pick one and study it

→ DYOR

→ If it is worth it, invest in it

𝐂𝐨𝐧𝐜𝐥𝐮𝐬𝐢𝐨𝐧

Defi is constantly evolving with new protocols coming up everyday

The right time to get onboard is now… you’re still early

I remain your favorite storyteller → @Jumithewriter

I → ghostwrite

tell stories

simplify defi

help projects create unique contents