The Full Potential of DeFi

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Understanding DeFi

What is DeFi (Decentralized Finance)?

DeFi(Decentralized Finance) is a financial system on the blockchain that includes various activities such as borrowing, lending, staking, yield farming, token swapping, and flash loans. Popular DeFi services include Aave, Sushi, 0x, Yearn Finance, Zerion, dYdX, Maker, Deversifi, Oasis, Kyber, and Bamboo Relay.

How do they work?

The type of DeFi service you use will vary depending on your needs. For swapping tokens and contributing liquidity, use Uniswap or Sushi. For lending funds, keep funds in services like Compound or Aave. For managing multiple DeFi activities, use Zapper. To use any DeFi service on Ethereum, you need an Ethereum wallet such as Metamask, etc.

Why is DeFi so important?

DeFi advocates cite three key benefits:
1. Decentralization - The means greater trust in the system's objectivity and immutability.
2. Automation - The increases efficiency.
3. Higher returns - The come from protocol tokenomics and the lack of a bank with overhead in the middle.

What type of apps can one build in DeFi?

SolarPath enables building a variety of DeFi applications, such as liquidity protocols, decentralized exchanges, and more using DeFi primitives and composability. To begin, check out the Smart Contract tutorial before moving on to more advanced applications.

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