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Introduction to Decentralized Finance (DeFi)
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# Exploring .green[Blockchain] for Fun and Profit ## An Introduction to .green[Decentralized Finance] (DeFi) --- # .green[Lucien] Loiseau * .green[PhD] in Computer Science * currently .green[CTO] @ Nodle (world's first incentivized crowdsource IoT network) * Focus on .green[Decentralized] Network and Security * Passionate about .green[Blockchain]
--- # .green[Plan] 1. What Is .green[DeFi] 2. .green[Ethereum] Blockchain 3. Initial Coin Offering (.green[ICOs]) 4. Asset-Backed Tokens and .green[StableCoins] 5. .green[DEXes] (Decentralized Exchanges) and P2P markets 6. Decentralized .green[Lending] / Borrowing 7. Conclusion --- class: center, middle # 1. What is .green[DeFi] **DeFi** is an ecosystem of .green[decentralized] financial applications, fueled by .green[Smart-Contracts] hosted on a .green[blockchain], specifically .green[Ethereum]. --- ## Not a BuzzWord
DeFi is a growing ecosystem of working protocols delivering value to several thousands of users and transacting the equivalent of hundreds of millions of dollars in digital assets, every day.
.center[
] --- ## Not a BuzzWord
DeFi is a growing ecosystem of working protocols delivering value to several thousands of users and transacting the equivalent of hundreds of millions of dollars in digital assets, every day.
.center[
] --- # 2. The .green[Ethereum] Blockchain * Ethereum is a public Blockchain. Its main interface is
.green[Etherscan]
. * .green[Smart Contracts] are self-executed contracts that enables end-to-end transactions, removing the need of many third parties such as brokers, escrow, lawyers or courts. (code is law!) * All is needed to interact with Ethereum is a .green[wallet] .center[
] --- # 3. Initial Coin Offering (.green[ICOs]) : Access Tokens * An ICO is a DeFi instrument for .green[CrowdFunding]: A certain amount of token is issued and sold in exchange of cryptocurrency
.left-column70[
] --- # 3. Initial Coin Offering (.green[ICOs]) : Access Tokens * An ICO is a DeFi instrument for .green[CrowdFunding]: A certain amount of token is issued and sold in exchange of cryptocurrency
.left-column70[
] --- # 3. Initial Coin Offering (.green[ICOs]) : Access Tokens * An ICO is a DeFi instrument for .green[CrowdFunding]: A certain amount of token is issued and sold in exchange of cryptocurrency * Buyers invest in a token often with the expectation of it being a future functional unit of currency (_speculative investment_) .left-column70[
] .right-column30[
] --
An ICO removes intermediaries such as venture capitalists, investment firm, banks, and stock exchanges.
--- # 3. Initial Coin Offering (.green[ICOs]) .center[
]
.center[
] .right[source:
https://icobench.com/
] --- # 4. .green[StableCoins] (Asset-Backed Tokens)
* An Asset-Based Token is a form of .green[Digital Stock] * Each token represents an .green[ownership right] of the underlying asset * Minting and Redeeming token done by the .green[issuer] (not trustless!) .center[
]
cache
,
contract
--- # 4. .green[MakerDAO] and the Dai token * The MakerDAO is a plateform that lets users take out a .green[loan] in __Dai__ * Dai supply is
.green[collaterized]
by other valuable crypto assets * .green[Trustless!] Minting and Burning purely based on Smart-Contracts Interactions * The Dai token is a StableCoin .green[softly-pegged] to USD (1 DAI = 1 USD) .left-column50[
] .right-column50[
] --- # 5. Decentralized .green[Exchanges] and P2P markets
Uniswap is a .green[Decentralized Exchange] that allows anyone to swap tokens
.center[
] --- # 5. Decentralized .green[Exchanges] and P2P markets
Uniswap is a .green[Decentralized Exchange] that allows anyone to swap tokens
.left-column50[
] .right-column50[
] --- # 5. Decentralized .green[Exchanges] and P2P markets * ~2B$ to 3B$ liquidity provided * Daily Trading Volume peaked ~ 1B$ (overtaking CoinBase),
current
* Only 10 employees (coinbase 1000 employees)
On 16th of September, Uniswap team announced the UNI governance token.
1 Billion UNI token distributed to over 50 000 addresses.
.center[
] --- # 6. Lending / Borrowing
Compound Finance is a .green[Decentralized Lending] plateform that allows anyone to borrow tokens
.left-column50[
] .right-column50[
] --- # 6. Lending / Borrowing
.center[about
1.4B$
locked in compound finance]
.center[
] --- # 6. Conclusion Traditional Finance | Decentralized Finance ------------- | ------------- .red[Lack] of unified digital identity
.red[Registration] over and over | .green[Cryptographic] Identities
.green[Non-Custodial] services
--- # 6. Conclusion Traditional Finance | Decentralized Finance ------------- | ------------- .red[Lack] of unified digital identity
.red[Registration] over and over | .green[Cryptographic] Identities
.green[Non-Custodial] services .red[Opaque] and .red[vulnerable] data | .green[Transparent], .green[Non-repudiable]
--- # 6. Conclusion Traditional Finance | Decentralized Finance ------------- | ------------- .red[Lack] of unified digital identity
.red[Registration] over and over | .green[Cryptographic] Identities
.green[Non-Custodial] services .red[Opaque] and .red[Vulnerable] data | .green[Transparent], .green[Non-repudiable] APIs are .red[Closed] or .red[Non-standard] | APIs are .green[Open], .green[Permissionless], .green[Composable] (Money LEGOs)