Decentralized Finance, or DeFi, is a term used to describe financial services running on the blockchain.
This way, DeFi protocols eliminate intermediaries, allowing end-users to interact directly with platforms.
DeFi promotes financial inclusion, increasing the number of users who would otherwise be cut off from accessing essential financial services.
These are the top-5 facts you should know about DeFi:
Bitcoin is the first DeFi
Bitcoin is a decentralized network allowing users to transfer funds from one person to another. There are no intermediaries reducing the cost of transactions. Bitcoin made it easier for users to remit funds cheaply, at any time or day without third parties, replacing roles placed by certain financial institutions.
Ethereum is the Home of DeFi
Ethereum is the second most valuable network and the first smart contracting network. By being the first platform, more DeFi protocols prefer launching on Ethereum. As a result, the network is the home of DeFi, managing over $116 billion of assets as Total Value Locked (TVL) by mid-April 2022.DeFi is a multi-billion industry porting over financial services to trustless blockchain networks using smart contracts, eliminating intermediaries. Learn more here: Click To Tweet
Ethereum might be popular but faces scaling challenges, forcing Gas fees high. To resolve challenges facing Ethereum, alternative networks like Avalanche and Terra are focused on DeFi, using their solutions to promote adoption and enhance people’s lives.
Tether (USDT) is crucial for DeFi
USDT is a multi-chain stablecoin that’s crucial for DeFi. USDT allows users to acquire other tokens, enabling staking, yield farming, and trading. By numbers, USDT is the third-largest crypto project with a market cap of over $73.5 billion as of mid-April 2022.
MetaMask is the world’s most Popular DeFi Wallet
MetaMask is a browser wallet with over 10 million users, securing billions of assets in various blockchains, including Ethereum and BNB Chain. Most DeFi protocols support MetaMask, integrating it because of the wallet’s security and ease of use.
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Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies.