Podcast
Questions and Answers
What is the main feature of decentralized finance (DeFi)?
What is the main feature of decentralized finance (DeFi)?
Which technology is mainly used for implementing DeFi platforms?
Which technology is mainly used for implementing DeFi platforms?
What is the purpose of DEX aggregators in the DeFi architecture?
What is the purpose of DEX aggregators in the DeFi architecture?
What are the common components of the first four layers in the multi-layered DeFi architecture?
What are the common components of the first four layers in the multi-layered DeFi architecture?
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What is a key challenge commonly associated with DeFi platforms?
What is a key challenge commonly associated with DeFi platforms?
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What was the significant introduction by Ethereum blockchain in 2017?
What was the significant introduction by Ethereum blockchain in 2017?
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Which platform is known for using smart contracts for loan, repayment, and liquidation processes?
Which platform is known for using smart contracts for loan, repayment, and liquidation processes?
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In June 2020, which cryptocurrency was introduced by Compound Finance for rewarding lenders and borrowers in its decentralized finance ecosystem?
In June 2020, which cryptocurrency was introduced by Compound Finance for rewarding lenders and borrowers in its decentralized finance ecosystem?
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Which entities have shown significant interest in DeFi, including platforms like Compound, Uniswap, and Aave?
Which entities have shown significant interest in DeFi, including platforms like Compound, Uniswap, and Aave?
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What is a major advantage of decentralized exchanges like Uniswap?
What is a major advantage of decentralized exchanges like Uniswap?
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What is the term used to describe the loss faced by liquidity providers if the token pairs they have invested in have significantly altered in value ratio?
What is the term used to describe the loss faced by liquidity providers if the token pairs they have invested in have significantly altered in value ratio?
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What is the primary reason for price impact in Automated Market Makers (AMM)?
What is the primary reason for price impact in Automated Market Makers (AMM)?
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What is the term used to describe a special type of attack in public blockchains where a participant puts their own transaction ahead of an upcoming trading transaction, often by manipulating transaction fees?
What is the term used to describe a special type of attack in public blockchains where a participant puts their own transaction ahead of an upcoming trading transaction, often by manipulating transaction fees?
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What component of a decentralized exchange can still have centralized control, despite the overall decentralization?
What component of a decentralized exchange can still have centralized control, despite the overall decentralization?
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What is a common consequence faced by operators of decentralized exchanges from government regulators?
What is a common consequence faced by operators of decentralized exchanges from government regulators?
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Study Notes
- Ethereum blockchain introduced smart contracts in 2017, leading to decentralized finance (DeFi) platforms like MakerDAO.
- MakerDAO is a decentralized lending platform based on a stablecoin, DAI, established in 2017. It uses smart contracts for loan, repayment, and liquidation processes.
- In June 2020, Compound Finance introduced a new cryptocurrency, Comp, for rewarding lenders and borrowers in its decentralized finance ecosystem.
- DeFi attracted significant attention in 2020, with platforms like Compound, Uniswap, and Aave offering yield farming and liquidity mining opportunities.
- DeFi has gained traction with venture capital investors, including Andreessen Horowitz and Michael Novogratz.
- As of September 2020, DeFi made up a large portion of the cryptocurrency market in terms of price changes.
- The future of digital finance was described as a three-way fight between Big Tech, national governments, and software developers building decentralized finance applications.
- DeFi is based on decentralized applications (DApps) and blockchain technology, enabling direct peer-to-peer transactions, mediated by smart contracts.
- Many DeFi platforms, including Uniswap, offer decentralized exchanges (DEX), allowing users to trade cryptocurrencies without intermediaries like banks or brokerages.
- Decentralized exchanges reduce the risk of hacking and offer greater anonymity, but they may suffer from low trading volumes and reduced market liquidity.
- Users on decentralized exchanges are at risk of losing their assets if they are hacked for their passwords or private keys, as there is no way to reverse transactions.
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Description
Test your knowledge about decentralized finance (DeFi) and its key features, including smart contracts, blockchain, lending, borrowing, derivatives, cryptocurrency trading, insurance, and composability. Learn about the innovative financial instruments offered by DeFi platforms.
