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DEFI:
LENDING
HEDGING
EXCHANGE
STABLECOINS
What is DeFi
● Individual is the sole custodian of assets
● Open source and dev tool allow for new
instruments
● Traditional and newly tokenized assets
● Transparency of issuance, repayments,
loans, collateral
Traditional Fintech: Banks govern & control people’s assets
DeFi - extra functionality, reduced operational risks
Hybrid Financial Instruments
● Crypto wrapped around legacy: stable
coins, gold bars. Issued, traded, settled
on blockchain
● Legacy wrapped around crypto: Bitcoin
ETFs, Futures, other derivatives. Issued,
traded, settled on Legacy Systems
Crypto assets - digital bearer instruments by nature
New Capital Formation (Fundraising)
● A community of supporters can bring
more value than VC
● Capital comes with fewer constraints
● Tokens offer more liquidity for investors
● Room for experimentation
DeFi elevates Trust, not Performance (Yet)
Open Lending Protocols - MakerDAO
● Central Bank on Blockchain
● MKR token holders vote on interest rate
● Create CDP with ETH
● Borrow Dai
● Dai pegs to USD
Open Lending Protocols - Dharma
● Fixed Duration (90 days), Fixed Interest
Loans
● Need matching
● Borrow: ETH 1%, Dai 10%, USDC 8%
● 1.5x ETH collateral
● Liquidation at 1.25x
Open Lending Protocols - Compound
● Liquidity pool (not 1-on-1)
● Algorithmic interest rates (change every block)
● No fixed duration terms
● cTokens - tokenized balances
● Liquidity effect - interest spread between all
suppliers
● 1/10th - reserves and safety cushion
● Community can repay 50% of borrowed asset at 5%
discount on collateral
● ETH, DAI, USDC, 0x, BAT, AUG, wBTC
Decentralized Prediction Market - Augur
● Wisdom of the crowd
● Binary (Yes/No) prediction - buy
shares, sum up to 1
● Reputation (REP) token for dispute
resolutions
● Sport betting
● Price hedging
Exchanges - Uniswap
● Uniswap allows exchange any ERC20
and ETH on chain
● Contribute to liquidity pools and earn
commissions
● Liquidity pairs 50%ETH and 50%ERC20
● 0.3% fee distributed among liquidity
providers
Stablecoins
● Dai (Crypto collateralized)
● Tether (Fiat collateralized)
Tips
● Backup your seed phrase
● Never Keep Coins on Exchanges
● Denis Serebryakov
twitter.com/ThatCryptoTO

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DeFi - Decentralized Finance - Wallstreet Meets Blockchain

  • 2. What is DeFi ● Individual is the sole custodian of assets ● Open source and dev tool allow for new instruments ● Traditional and newly tokenized assets ● Transparency of issuance, repayments, loans, collateral Traditional Fintech: Banks govern & control people’s assets DeFi - extra functionality, reduced operational risks
  • 3. Hybrid Financial Instruments ● Crypto wrapped around legacy: stable coins, gold bars. Issued, traded, settled on blockchain ● Legacy wrapped around crypto: Bitcoin ETFs, Futures, other derivatives. Issued, traded, settled on Legacy Systems Crypto assets - digital bearer instruments by nature
  • 4. New Capital Formation (Fundraising) ● A community of supporters can bring more value than VC ● Capital comes with fewer constraints ● Tokens offer more liquidity for investors ● Room for experimentation DeFi elevates Trust, not Performance (Yet)
  • 5. Open Lending Protocols - MakerDAO ● Central Bank on Blockchain ● MKR token holders vote on interest rate ● Create CDP with ETH ● Borrow Dai ● Dai pegs to USD
  • 6. Open Lending Protocols - Dharma ● Fixed Duration (90 days), Fixed Interest Loans ● Need matching ● Borrow: ETH 1%, Dai 10%, USDC 8% ● 1.5x ETH collateral ● Liquidation at 1.25x
  • 7. Open Lending Protocols - Compound ● Liquidity pool (not 1-on-1) ● Algorithmic interest rates (change every block) ● No fixed duration terms ● cTokens - tokenized balances ● Liquidity effect - interest spread between all suppliers ● 1/10th - reserves and safety cushion ● Community can repay 50% of borrowed asset at 5% discount on collateral ● ETH, DAI, USDC, 0x, BAT, AUG, wBTC
  • 8. Decentralized Prediction Market - Augur ● Wisdom of the crowd ● Binary (Yes/No) prediction - buy shares, sum up to 1 ● Reputation (REP) token for dispute resolutions ● Sport betting ● Price hedging
  • 9. Exchanges - Uniswap ● Uniswap allows exchange any ERC20 and ETH on chain ● Contribute to liquidity pools and earn commissions ● Liquidity pairs 50%ETH and 50%ERC20 ● 0.3% fee distributed among liquidity providers
  • 10. Stablecoins ● Dai (Crypto collateralized) ● Tether (Fiat collateralized)
  • 11. Tips ● Backup your seed phrase ● Never Keep Coins on Exchanges ● Denis Serebryakov twitter.com/ThatCryptoTO