Podcast
Questions and Answers
What is the main feature of decentralized finance (DeFi)?
What is the main feature of decentralized finance (DeFi)?
- Utilizes smart contracts on a blockchain (correct)
- Uses traditional lending and borrowing systems
- Relies on centralized exchanges for financial transactions
- Requires intermediaries such as brokerages and banks
Which platform allows people to speculate on price movements of assets using derivatives?
Which platform allows people to speculate on price movements of assets using derivatives?
- Decentralized exchanges (DEXs)
- Centralized exchanges (CEXs)
- DEX aggregators
- DeFi (correct)
What component do DEX aggregators have that distinguishes them from DEXs and CEXs in the DeFi architecture?
What component do DEX aggregators have that distinguishes them from DEXs and CEXs in the DeFi architecture?
- Protocol layer
- Asset layer
- Settlement layer
- Aggregator layer (correct)
What risk are some applications in DeFi subject to despite promoting high-interest rates?
What risk are some applications in DeFi subject to despite promoting high-interest rates?
Which type of exchange is part of the multi-layered DeFi architecture and components?
Which type of exchange is part of the multi-layered DeFi architecture and components?
What is the primary function of MakerDAO?
What is the primary function of MakerDAO?
Which platform started rewarding lenders and borrowers with a cryptocurrency called Comp?
Which platform started rewarding lenders and borrowers with a cryptocurrency called Comp?
What is the concept of 'yield farming' or 'liquidity mining' in the context of DeFi?
What is the concept of 'yield farming' or 'liquidity mining' in the context of DeFi?
According to The Economist, what are the three entities involved in the future of digital finance in 2022?
According to The Economist, what are the three entities involved in the future of digital finance in 2022?
What is the primary function of smart contract programs in DeFi?
What is the primary function of smart contract programs in DeFi?
Study Notes
Decentralized Finance (DeFi) Features
- The main feature of DeFi is the elimination of intermediaries in financial transactions.
Derivatives Trading
- The platform that allows people to speculate on price movements of assets using derivatives is Synthetix.
DEX Aggregators
- DEX aggregators have a component that aggregates liquidity from multiple sources, distinguishing them from DEXs and CEXs in the DeFi architecture.
Risks in DeFi
- Some applications in DeFi are subject to the risk of liquidity Evangelism, despite promoting high-interest rates.
DeFi Architecture
- Decentralized exchanges (DEXs) are part of the multi-layered DeFi architecture and components.
MakerDAO
- The primary function of MakerDAO is to create a stablecoin, DAI, pegged to the US dollar.
Compound
- The platform that started rewarding lenders and borrowers with a cryptocurrency called Comp is Compound.
Yield Farming and Liquidity Mining
- Yield farming, also known as liquidity mining, is the concept of earning rewards in the form of cryptocurrencies by providing liquidity to DeFi platforms.
Future of Digital Finance
- According to The Economist, the three entities involved in the future of digital finance in 2022 are governments, banks, and fintech companies.
Smart Contract Programs
- The primary function of smart contract programs in DeFi is to automate and execute financial agreements without the need for intermediaries.
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Description
Test your knowledge about decentralized finance (DeFi), which offers financial instruments without relying on intermediaries by using smart contracts on a blockchain, mainly Ethereum. Learn about lending, borrowing, trading, speculation, insurance, and interest in DeFi platforms.
