DeFi assets are among the leading offerings in the current world of altcoins and are empowering people everywhere to participate in the financial revolution through crypto.

What is DeFi?

DeFi, short for decentralized finance, represents a segment of the crypto sphere that focuses on peer-to-peer transactions and digital finance. By harnessing the efficiency and power of smart contracts, digital contracts that live on the blockchain, DeFi platforms create a space for lending, borrowing, trading, saving, and earning interest that doesn't require all of the usual bureaucracy and paperwork. The goals of DeFi are simple:

Automate the financial experience - smart contracts are processed digitally on blockchain technology, so no paperwork and no wait time through the bank for transactions to clear.

Cut out the middle man - automating the contract process on the blockchain takes away the need for human intermediaries, eliminating the need to engage outside mediators such as lawyers to process agreements between parties.

Efficiency through speed - with no need to rely on different parties or deal with wait times to complete a transaction, DeFi makes doing business a more seamless and fast experience from start to finish.

Accessibility to all - many of the financial opportunities offered through DeFi platforms are usually reserved for major financial institutions like hedge funds and banks. DeFi is closing the gap between the individual and the financial oligarchy.

Our economy is becoming increasingly digital, but it may still be difficult to visualize this transformation action. To understand how DeFi works, think of the lending process. To take out a loan through a bank, there are documents to be filed, credit scores to be checked, representatives to speak to, and time to be spent discussing your options and waiting for approvals. In the world of DeFi, you have the option to store your collateral in the system to obtain a loan within minutes and, once your loan is paid off, your collateral is returned to you.

In a similar way, DeFi improves upon the process of holding savings on a decentralized platform because your assets can earn significant interest with higher rates. This kind of passive income is incompatible with the current banking system, which provides minimal interest to investors and doesn’t allow for the same level of financial growth over time.

DeFi offers a financial revolution that helps eliminate economic gaps, and creates attainable financial solutions through the use of crypto. DeFi is offering a more financially soluble future, empowering to build wealth independent of institutions and powered by blockchain and mathematics.

DeFi terms to know

Public Keys - a numerical code, also known as a wallet address, that serves as a means to identify transactions and send or receive crypto through open channels that are less secure. This is because public keys can only encrypt data, not decrypt. To decipher a public key, you need the private key that goes along with it.

Private Keys - a numerical code that decrypts data in transactions, allowing for the safe transfer of crypto funds. Private keys provide faster transactions, are tied to their corresponding public keys mathematically, and are only known by their user for the sake of security of funds.

dApps - short for Decentralized Applications, which are apps that run on the DeFi network.

DEX - short for Decentralized Exchange, these serve as peer-to-peer exchange platforms on the DeFi network.

Smart Contracts - a peer-to-peer contract containing code that allows for autonomous execution on the blockchain.

Gas Fees - the phrase people use to refer to fees charged for transactions that take place on the Ethereum network.

How do DeFi platforms work?

The peer-to-peer nature of DeFi means utilizing and storing public crypto to exchange cryptocurrencies through designated DeFi applications, known as dApps, to power peer-to-peer financial transactions on-chain. Most dApps are currently built on the Ethereum protocol, which is known as the backbone of the DeFi network. With almost all DeFi transactions currently taking place on the Ethereum blockchain, Ethereum’s transaction fees (referred to as gas fees) are valued based on the network’s usage.

Trade the top DeFi assets on Voyager

Want to get in on the action? Voyager offers a host of DeFi assets for trade on our app:

Aave (AAVE): an open-source and non-custodial liquidity protocol for earning interest on deposits and borrowing assets. The platform is centered around using DeFi protocols to allow for passive interest gain through lending and borrowing.

Band Protocol (BAND): a cross-chain data oracle platform that aggregates and connects real-world data and APIs to smart contracts.

Chainlink (LINK): a decentralized oracle service, aims to connect smart contracts with data from the real world.

Compound (COMP): an algorithmic, autonomous interest rate protocol built for developers, to unlock a universe of open financial applications.

Kyber Network (KNC): the first deflationary staking token where staking rewards and token burns are generated from actual network usage and growth in DeFi.

Polkadot (DOT): DOT facilitates an internet where independent blockchains can exchange information and transactions in a trustless way via the Polkadot relay chain.

Polygon (MATIC): Polygon is one of the most well-adopted and fastest-growing Ethereum Layer 2 scaling solutions and decentralized application ecosystems. It boasts features such as interoperability, modularity, and, of course, scalability and security.

Terra Luna (LUNA): a next-generation smart contract platform & programmable money for the internet. Its platform supports stablecoins that offer instant settlements, low fees, and seamless cross-border exchange.

The Graph (GRT): an indexing protocol for querying networks like Ethereum. Think of it as the Google of blockchains. Anyone can build and publish open APIs, called subgraphs, making data easily accessible.

MakerDAO (MKR): a speculative Ethereum-based asset that backs the value of DAI, a stable-price stablecoin issued on Ethereum.

Multi Collateral Dai (DAI): a decentralized, unbiased, collateral-backed cryptocurrency soft-pegged to the US Dollar. Resistant to hyperinflation due to its low volatility, DAI offers economic freedom and opportunity to anyone, anywhere.

Serum (SRM): a decentralized exchange (DEX) and ecosystem that brings unprecedented speed and low transaction costs to decentralized finance. It is built on Solana and is completely permissionless.

Shiba Inu (SHIB): built on the Ethereum network, the goal of the Shiba Inu ecosystem is to be completely community-driven and governed, showing real loyalty to the core values of the DeFi network. ShibSwap is their DEX, or decentralized trading platform, which will feature three main tokens: SHIB, LEASH, and BONE and will utilize a staking protocol.

Sushiswap (SUSHI):  a decentralized exchange platform that originates from a fork in the Uniswap network and is an AMM, or automated market maker. This means that it provides automated and permissionless trading between any pair of assets by having users trade from pools of crypto held on the network.

UMA (UMA): an open-source protocol that allows developers to design and create their own financial contracts that are self-enforcing and accessible worldwide, which differentiates it from traditional derivatives.

Uniswap (UNI): a decentralized exchange, where users can buy and provide liquidity, directly from crypto wallets, all hosted by the Ethereum blockchain. (YFI): a decentralized finance yield aggregating platform that runs on the Ethereum blockchain. Yearn is a growing collection of DeFi services, planned to act as an easy gateway for the larger DeFi ecosystem.

The future of DeFi

The goal of cryptocurrencies, as a whole, is to improve upon the systems we have in place to create a more efficient, scalable and accessible world of finance. Decentralized finance stands to bring that accessibility a step further and create a more open monetary ecosystem.

Also, by making the tangible parts of doing business superfluous, like paper contracts and office spaces, it can create a more sustainable and eco-friendly alternative to Wall Street and big-bank institutions. DeFi is reinventing the world of finance, bringing real plausibility to the term “financial revolution.”

Why trade DeFi on Voyager?

Voyager is here to help you trade DeFi the simple way. The idea of traversing through the wide variety of dApps can feel overwhelming to those just starting out in the DeFi space. On Voyager, you can trade a multitude of DeFi assets all in one place, without the complexity and high transaction fees.

Download the Voyager app to start your journey into DeFi.

Voyager Cryptocurrency Risk Disclosure

All investments involve risk and the past performance of a digital asset or other financial product does not guarantee future results or returns. Cryptocurrencies are highly speculative in nature, involve a high degree of risk and can rapidly and significantly decrease in value. It is reasonably possible for the value of Cryptocurrencies to decrease to zero or near zero. While diversification may help spread risk, it does not assure a profit or protect against loss. Investors should consider their investment objectives and risks carefully before investing. Previous gains may not be representative of the experience of other customers and are not guarantees of future performance or success.