Decentralized Finance

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Decentralized Finance or DeFi, also known as Open Finance is a movement to replace traditional trusted services such as lending, trading and derivatives with open, transparent and trustless counterparts. DeFi protocols often employ specialized smart contracts in place of a traditional human, corporate or government third party.

DeFi protocols share many properties with open services.

Examples

  • Maker provides crypto-collateralized loans via a smart contract. It is by far the biggest DeFi protocol with nearly 350M USD (dollar converted ETH) backing active loans.
  • Bancor and UniSwap are exchange protocols that use automated market makers in place of order books.
  • Augur is a prediction market without moderators.
  • Dharma and Compound Finance provide overcollateralized loans meant primarly for speculation.
  • There are several projects working to build decentralized derivative products.

Further Information

  • defipulse.com provides a ranking of the top DeFi protocols.