The definitive guide to DeFi
https://newsletter.thedefiant.io/p/the-defiants-definitive-guide-to
Defiant, Mar 2021
At The Defiant, we are convinced finance will become increasingly decentralized and open. It just makes sense; our current financial system is running on infrastructure that was built in the 1970s; messaging networks like SWIFT and ACH that simply aren’t made to transact value.
Blockchains have value at their core. They are money networks, and as such, they make for more efficient financial systems. They cut out intermediaries, improving speed and cost. They are permissionless and global, so that essential tools to grow savings and make payments and transfers, are at the hands of anyone with an internet connection, anywhere in the world.
A financial system that’s running on distributed networks and powered by cryptocurrencies allows users to maintain control over their assets and information. For the first time ever, any individual can own a piece of the networks and applications they use. They can participate in these protocols’ governance and benefit from their growth. It’s a new paradigm for the internet and for money.
We are witnessing the birth of the internet of money. It’s here, growing and maturing. You can use it right now.
The Defiant is the leading information company at this intersection of tech and money. It’s the only content platform producing unbiased, objective journalism, that’s focused on decentralized finance. We cover the news in this space day to day, across our newsletter, podcast, YouTube channel, and website.
For those who are new to this ecosystem (and even for those who have been around for longer), the flood of new terms, apps, and concepts can feel overwhelming.
This guide is meant to be a one-stop-shop to get started. These are all the DeFi basics you will need to start exploring the internet of money.
🤝 Share this guide with your friends, family, colleagues —anyone who you think would benefit from learning about the future of finance and how to start taking control of their assets.
Here are the first two articles you need to read as you get started on your DeFi journey.
Definition: Decentralized finance, or DeFi, is the ecosystem of financial applications being built with blockchain technology and without banks.
Characteristics:
Non-Custodial
Open
Transparent
Decentralized
History:
Origins of the term
Bitcoin and MakerDAO
👉 Read the full post here
In this guide we’ll be helping you take your first steps into the boundless world of Decentralized Finance, better known as DeFi.
We guide you through:
Setting up an account at a crypto exchange
Buying ETH
Setting up an Ethereum wallet
Withdrawing to MetaMask
How to use Uniswap and trade from ETH to DAI
How to lend stablecoins on DeFi protcols
How to connect your wallet to portfolio trackers
👉 Read the full post here
DeFi 101
Here is a compilation of our DeFi 101 short guides, plus their related news articles, podcasts, videos and guest op-ed pieces. These resources will get you from newbie to Jedi of the most cutting-edge corner of tech and finance. They’ll help you better leverage our newsletter, video and podcast, which will in turn help you stay updated on the space and take your understanding to the next level.
Learn: Theory and Fundamentals
1. What is blockchain?
At a basic level, blockchain is nothing more than a type of database. Every time one accesses an online account, such as Twitter, Google, or Facebook, one links up to a database. Read more
2. What is Interoperability and Why is it Important?
Interoperability happens when two or more systems can communicate and exchange value. The best way to understand interoperability is to see the early success stories of it in action. Read more
3. What is Layer 1?
Consider Ethereum first. It is the underlying blockchain architecture… Read more
4. What is Layer 2?
Layer 2 is a collective term for solutions designed to help scale your application by handling transactions off the main Ethereum chain… Read more
5. Layer 1 vs Layer 2
As the Ethereum network gets busier, gas prices increase as transaction senders aim to outbid each other. This can make using Ethereum very expensive. Read more
6. What is DeFi?
In short: DeFi is a global, open alternative to the current financial system. It differs through products and services built on open-source technology that anyone can use to… Read more
7. How Bitcoin, Ethereum, and Other Blockchains Fit Within DeFi
DeFi today can be found mostly flourishing on Ethereum. New applications launch faster than you can keep up with… Read more
8. The Top DeFi Wallets
Centralized wallets store your crypto assets on your behalf. To open an account using a centralized wallet, first verify your identity and fulfill know-your-customer… Read more
9. What are Stablecoins?
Electronic cash is nothing new. In fact, over 150 years has passed from the first wire payment made by… Read more
10. What is a DEX?
CeFi vs DeFi. Centralized exchanges (CEXs) versus decentralized exchanges (DEXs). Trading on CEXs involves… Read more
11. What is Liquidity Providing?
Yield farming is one of the many memes that was created by the DeFi community. While it’s a term that gets tossed around loosely, there’s a narrower criteria to define what is yield farming… Read more
12. What is Yield Farming?
Yield Farming is the hottest thing in blockchain right now drawing in millions of dollars in collateral as traders and investors look to capitalise on high interest rates and advantageous secondary token rewards. What's really going on here and is it sustainable? Watch the video
Risks & Hacks
1. Risks of DeFi
You can lose 100% of your money in any DeFi app or protocol. So above all else, apply a simple rule of thumb to help mitigate this risk: don’t deposit more than you’re willing to lose. Read more
2. DeFi Insurance and how Nexus Mutual Works
As more apps and protocols launch, and more money pours into DeFi, it’s important that DeFi investors can mitigate the risk of losing their funds. With great power, comes great responsibility. Read more
3. Yearn Loses $11M in 2021’s First DeFi Hack
Yearn Finance, the yield aggregation protocol founded by Andre Cronje, has been hacked. One of the platform’s so-called vaults lost $11M, and the attacker got away with $2.8M. Read more
4. For All You Degens Farming in Public: Here's Your Privacy Toolbox
5. Blockchain Devs Are Neglecting Data-Related Risks, Chainlink's Sergey Nazarov Says
Listen to the podcast episode here.
6. You stole $37M, now what? The $CREAM $ALPHA exploit unpacked
Alpha Finance was hacked to the tune of $37m but this was a hack so specific and well-informed it was immediately assumed to have been an inside job… Read more
7. Flash Loans, and Attacks -- explained
After five attacks and millions of dollars lost due to an exploit, this week we're diving deep into the mechanism behind what made this possible: Flash Loans. Watch the video
8. DeFi Dre and the Invisible Hacked Pickles
Another week, another hack… what have we learned this time? Watch the video
Get Started: Tutorials & Guides
1. Getting Started With DeFi
In this guide we’ll be helping you take your first steps into the boundless world of Decentralized Finance, better known as DeFi. Read more
2. Setting Up MetaMask
MetaMask is a free cryptocurrency and NFT wallet that comes as a browser extension or a mobile app to interact with the Ethereum network, BSC, or any other layer 2 networks. Read more
3. What is Gas and how to reduce it?
“Gas” is the ETH required to power every transaction on Ethereum. Gas is a term that was coined to describe the ETH (ether) required to transact on the Ethereum network. Read more
4. How to become a liquidity provider on UniSwap?
Uniswap is a decentralized financial exchange, or DEX, which allows anyone to take part in the financial transactions of Ethereum-based tokens without a central body… Read more
5. DeFi Safety Tips
DeFi has the potential to be a wild place at times. Seemingly bulletproof protocols can rug in an instant or suffer exploits that token prices will never recover from. Read more
6. DeFi Privacy Tool Box
Ideas and Big Picture
"I'm Not Super Bullish on DeFi. We're Using This Tech to Enrich a Small Group of People." James Prestwich.
In this podcast episode Camila Russo speaks with James Prestwich, who has focused on cross-chain interoperability as founder of Summa, and now with proof of stake blockchain Celo. They talked about how against his expectations, users have opted for wrapped tokens, instead of cross-chain swaps; it all comes down to ease of use. He believes in the future, all dapps will have to be built with cross-chain, cross-shard capabilities as a default.
"Basic Financial Services is a 21st-Century Fundamental Human Need." OMG Network's, Vansa Chatikavanij.
The Bangkok-based project formerly known as OmiseGo has spearheaded research and work on a scaling technology for Ethereum called Plasma. Scaling solutions will be key for Ethereum and therefore DeFi, to continue growing. The network is already at capacity, and gas prices are getting prohibitively high, especially for complex DeFi transactions.
"Decentralized Money Shouldn't be Traded on Centralized Exchanges." Loopring Founder, Daniel Wang.
This podcast interview is with Daniel Wang, CEO and founder of the Loopring protocol. The exchange built on the protocol launched a little over a month ago, with the goal of providing a non-custodial platform, meaning it allows users to keep control of their funds, with similar performance in throughput and cost as centralized exchanges.
"For the First Time, You Can Buy a Piece of the Art, and a Piece of the Gallery." MetaKovan.
This podcast episode is with MetaKovan, the pseudonymous investor who holds the largest known NFT collection in his Metapruse fund, which he leads with his (also pseudonymous) partner Twobadour.
"I'm Imagining a World Where Every Song Has an Investable Layer." DJ 3LAU.
DJ and music producer 3LAU (Justin Blau) explores what that will look like with music. He envisions a world where tokens allow artists to connect directly with their audience, removing the need for intermediaries, and where fans can become investors in their idols.
"We've Been Creating Value for Instagram and TikTok With Very Little Actually Accruing to Us." Trevor McFedries.
Trevor McFedries, is behind Lil Miquela, a 19-year-old aspiring pop star with almost 3M Instagram followers, striking deals with Clavin Klein and Prada. But what’s more surprising is that she’s not actually human. She’s a computer-generated character. The company that Trevor co-founded, called Brud, created her image and life story.
"It Turns Out Music Does Have Value. We've Been Pricing It Incorrectly For 20 Years." RAC.
DJ Andre Anjos, aka RAC. RAC, makes electronic and dance music, and has been involved in crypto in one way or another since 2016. Most recently, he tokenized his latest album and sold it on digital goods market place ZORA. The token, which has the ticker TAPE, is linked to a physical, limited edition cassette tape that token holders can redeem.
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