You’ve probably heard about DeFi and DeFi tokens, but what is it really? DeFi stands for Decentralized Finance. The DeFi token system is a cryptocurrency that can be used as a means of exchange in the web3.0 world - the next level of the internet which brings blockchain to life! If you want to know more about how Defi works and why we think this will revolutionize our financial system, read on below!
DeFi is an analogy of the current financial system that brings with it a few killer features that will make transactions and all work with money online much easier. DeFi tokens are created based on Ethereum blockchain technology. DeFi tokenization means you can create your own currency - something like creating new coins for special purposes or events! Your DeFi tokens are held in DeFi wallets which you can find on DeFi websites.
These DeFi tokens are not based on Ether so they have their own value and you should be careful, although there’s a certain level of security as DeFi runs by smart contracts - digital protocols that make sure everything is safe.
It works the same way Bitcoin and other popular cryptocurrencies work, but it is a newer and improved version! These tokens are created by DeFi protocols. Protocols can be compared to websites where you put your DeFi token address in the “Deposit” field and send it from another wallet (or exchange). In return, you will get an equivalent amount of newly minted tokens on that website - this means they don’t use the existing coin supply for new coins when creating them during the DeFi protocol operation.
DeFis became much more accessible with decentralized exchanges which exist today as well. Web-based DEX solutions let users trade their own crypto assets without any intervention whatsoever from third parties like banks or platforms such as Coinbase. DeFi is a process that you can’t stop once started - it's an evolution of the financial system, making many things much easier for everyone!
This DeFi protocol enables anyone to create their own token and use any Ethereum wallet they want. If you know how cryptocurrencies work or are familiar with blockchain technology, this DeFi protocol will be perfect for you! This is the future of money, so make sure to read up on DeFi protocols and DeFi-based currencies as soon as possible! Your financial life and not only will get much easier by just using it instead of usual financial systems!
The greatest example of DeFi is Uniswap (UNI), Compound (COMP), Aave (AAVE), and many many other networks or tokens, call it as you want, which you see by just typing "DeFi' into your browser. As I said, there's a bunch of them, however, only ones deserve your attention. The one rule that I'll give to you, "Do Your Own Research" and it's probably one of the most important parts of investing and in life itself. So don't listen to some of your favorite Bloggers who said that you need to buy exactly this DeFi token or something else, they only think that it can grow over time and these imaginations can be absolutely wrong sometimes
There's no something difficult here. If you want to invest in this sphere and in the future become a very rich guy so you just need to buy some tokens like Uniswap and push it into a stake if you want to, so with the magic of compound interest you'll get even richer than you think you'll be!
Or if you don't wanna invest but want to use the technology itself you can go up to the website of this DeFi token and see the opportunities which they are offering to everyone including you. Probably you can build your own network on it or use it as an exchange for your other cryptos. Thus there's a ton of implementation and it's specific for every token
By the end of this article, you need to dive more deeply into this sphere with tons of opportunities on every step that you're taking. So look at some of the examples that I gave to you like Uniswap or Compound and remember, Do Your Own Research. Thanks for reading, don't forget about like and subscription :)