DeFi, Exchange

Talk DeFi To Me: What It Is And Where It Is Going

DeFi is a term that gets thrown around a lot in the crypto space, and sometimes it can feel like the classic Andy meme from Parks and Rec.

andy

So we asked our friends over at DappRadar to write a guest post for our readers breaking down their experience with DeFi, what it is, and where it’s going. All in a way that is easy to understand!

DappRadar, if you don’t know, has been making exploring, tracking & managing DApps insightful, convenient and rewarding for us all since 2018.

Take it away DappRadar!

Do people really know what DeFi is?

As it turns out, no – so if you’re unsure or unclear as to what DeFi is, you’re not alone, FAR from alone!

A while back the team at DappRadar conducted a survey of our audience to see how many of them knew what DeFi was and the results were extremely surprising. As it turns out, 62% of our audience did not know or was in the process of trying to learn. What is even more interesting is that in that specific examination, 66% of those surveyed were actually using the DeFi app Uniswap.

This disconnect showed us that there is a huge amount of users out there that are using DeFi without really understanding what it is. It turns out that the FOMO is very real, as is the disconnect between these awesome new technologies and the educational resources surrounding them.

Which is precisely why we are here! To understand!

What exactly is DeFi?

DeFi is short for Decentralized Finance and is better described as a movement that leverages decentralized networks to transform traditional financial products into trustless and transparent protocols that run without intermediaries.

In other words, it puts the average person on the same level that bankers are on without all the middle men and processes.

With the power of the Ethereum blockchain, we all can act as the exchanges, liquidity providers, and lenders with no hassle. We are able to contribute to increasing the liquidity and stability of the entire decentralized financial system. A system that we all create for ourselves and for our financial freedom needs. An often used phrase, we can “be our own bank”!

In essence, the community of all DeFi users creates and maintains the financial system that DApps rest upon without the middleman.

How can you use DeFi?

But what does that exactly mean we can DO with DeFi? Here are some of the most popular uses:

Lending platforms: These platforms are usually the most popular and use smart contracts  to replace intermediaries such as banks that manage lending in the middle.

Yield farming: For some traders who are willing to take on more risk with their assets, there's yield farming. With yield farming users scan through various DeFi tokens in search of opportunities for larger returns.

Decentralized exchanges (DEXs): These are online exchanges that allow users to exchange their assets for other assets. This can be things like Ether or any number of tokens.

Stablecoins: A cryptocurrency that's tied to an asset outside of cryptocurrency to stabilize the price. USD Coin is an example.

"Wrapped" tokens: These allow for assets to be used on other networks. For example, wrapped bitcoins (WBTC, renBTC, and others) are a way of sending bitcoin to the Ethereum network so the bitcoin can be used directly in Ethereum's DeFi system

In essence all of these allow for user control over their assets in order to put them to work. These in turn allow us all to gain returns on our assets.

Where is DeFi going?

While many are talking about coin price and market movements, DeFi continues to fly under the radar with the mainstream media despite new and exciting developments.

Where exactly it goes will be up to the many developers and visionaries in the space and things are looking incredibly promising! If you want to be on the cutting edge, or just want to dip your toe into the world of DeFi, you can simply look at your DApp explorer in your MEW wallet on Android!

In the DApp explorer section (Powered by DappRadar!) you can select to view only DeFi and even toggle on the NEW filter. Who knows, you might find the next great thing just as it releases!

mewwallet

A huge thank you to the team at DappRadar!

DappRadar Banner

Author image

About MEW

MyEtherWallet (our friends call us MEW) is a free, client-side, open-source, easy-to-use interface helping you interact with the Ethereum blockchain.