...and lending pools, liquidity mining, decentralized exchanges, staking, governance tokens and what not. Honestly, this ever-expanding list of fancy new terms could go on forever, and it may confuse even the most seasoned crypto veterans among us.
While understandably perplexing at first glance, DeFi is in many ways the natural progression, and some may say - fulfillment, of the vision that kickstarted the Ethereum project. Or at least, it is a very big leap towards the permissionless Economic World Computer, Vitalik Buterin dreamed into existence in 2014 - maintained by a global open-source community, owned by no one, and open to everyone.
"DeFi is in many ways the natural progression, and some may say - fulfillment, of the vision that kickstarted the Ethereum project."
In short, Decentralized Finance, or DeFi, is an umbrella term referring to a host of new tools and services in the blockchain space which aim to recreate traditional financial instruments in a decentralized manner. The DeFi space comprises tools that allow users to lend\borrow, exchange and swap crypto assets securely without having to trust other parties that would normally be involved.
"These new decentralized financial tools are not controlled by third parties, mostly governed by smart contracts, and function thanks to the participation of the crowd. Which is you, us, and anyone interested in doing so. "
Most of these functions have been offered in the crypto space for years. What’s new about DeFi, however, is the fact that now all these services exist as independent and decentralized building blocks. These blocks are (almost) not controlled by third parties, mostly governed by smart contracts, and function thanks to the participation of the crowd. Which is you, us, and anyone interested in doing so.
Securing uncensorable access to basic financial services, as DeFi does, is of utmost importance. However, empowering the general public to maintain, and hence to gain from this decentralized financial system may be even more important.
Essentially, when participating in DeFi as liquidity providers and such, the public collects the fees that have been traditionally amassed by centralized exchanges and money handlers - which profit whether the market goes up or down. Decentralization has led to a situation in which everyone can now profit from this activity, rather than it being harvested by a select few. This is where the seemingly outlandish returns come from that you might have heard about.
"Essentially, when participating in DeFi, the public collects the fees that have been traditionally amassed by centralized exchanges"
While the unworldly ROI’s of dozens of percentage points per week may be unsustainable in the long run, this new paradigm of decentralized inclusion will persist. Finally, cryptocurrency markets offer the opportunity to invest solidly, hedge against risk, neutralize unpredictable exchange swings, and create returns that are not solely based on speculation.
However, nothing in life comes without a catch, and DeFi profits are no exemption to this. While immensely profitable, and potentially less risky than betting on the success of volatile crypto assets, DeFi, when taken to its most lucrative extreme, is mind bogglingly complex.
At YIELD we have made it our mission to eliminate this complexity, while offering a product that allows everyone to benefit from this new financial system. In times of unprecedented economic turmoil we intend to establish a safe haven for investors and savers, built on these new decentralized financial tools, and make them as accessible as traditional saving accounts and investment packages - if not more so.
"At YIELD we have made it our mission to eliminate the complexity associated with DeFi, while offering a product that allows everyone to benefit from this new financial system"
On YIELD, you simply deposit funds, choose an investment plan, and - that’s it!
Your funds are then routed to well-tested, solid, and hedged DeFi maneuvers. These maneuvers are partly automated on the basis of market-monitoring AI, and constantly updated and overseen by a team of Yield-Farming specialists. The only thing you have to do is define your preferences, and YIELD takes care of the rest.
"The only thing you have to do is define your preferences, and YIELD takes care of the rest."
YIELD is very close to launch, and we’re already collecting beta testers, which will have access to a host of exciting benefits. If you want early access, leave your email here, and join us on twitter, telegram, or LinkedIn.
Onwards and Upwards!
The Yield Team.