🤔**Wait, WTF is DeFi?**
Decentralized Finance is the application of cryptographic tools for financial applications. By trusting in code we can compose new ways to interact with tokens, which means money LEGOS. In the House of DeFi, we give you a small taste of different platforms and recap some of the key platforms and their purpose.
- But why do we need DeFi? Don't we get financial services from banks?
TL;DR: Want to ape a $5k investment into something at 3am ( don't fomo 😬), donate 10k to a small charity project in Costa Rica via Giveth, borrow 1k to fix your car, send $100 to a friend on the other side of the world or simply earn some interest on the assets you have in your wallet ... you can and you don't have to go to a branch, call anyone or answer any probing questions before you do it. You can just do it. You become your own bank and it feels damn good.
True, we do get financial services from banks like Wells Fargo, HSBC, Lloyds, etc, etc. But the banks aren't very nice and only serve to benefit their shareholders. Banks offer high interest accounts of 0.1% APY and charge us to use their fine services. 🥳 For this amazing yield, we deposit funds into banks and our funds are used to provide the liquidity for them to offer their services, make exorbitant profits from those services and invest in arms and other nefarious ventures. Not content with taking all the profit for themselves and making the world a poorer place, they also charge you to have these accounts and hammer you hard if you fall out of favour. Yay the banks. 💔
Decentralized Finance or "DeFi" is a bit different. 🙌 You get most of the same services you get in traditional, centralized finance or "TradFi" but instead of the banks holding all the money & profiting from everything, the functions they traditionally perform are rolled into code (Smart Contracts) by very clever developers - often open sourced - and run in a permissionless state on a global, public network of nodes (blockchain), using decentralized storage and no intermediaries involved. Anyone can deposit their assets, play an active role in the protocol and get a share in the profits. 😁
Users are incentivized to use a protocol and often earn yield in the protocols own token, which then gives them the ability to partake in the governance and evolution of the protocol and become invested in the growth of DeFi itself.
Using, depositing, lending, borrowing & staking all can produce yield of 1 - 10% APY and often much much more for the early users of these platforms. This is not without risk and you must always research anything you're considering throwing your precious assets at but educate yourself, use risk management and it is possible to begin to free yourself of the very broken financial system and make some sweet gains & passive income along the way.
DeFi covers a wide range of tools from traditional borrowing and lending, to flash loans, automatic market makers (AMM), staking and yield farms. WTF is yield farming and, how can you avoid getting rekt? Get educated...
A fairly comprehensive guide from The Defiant can be found here: The Defiant's Definitive Guide to DeFi, but we keep our own index below as well.
⚠️Danger can be anywhere. Do Your Own Research (DYOR) and equip yourself with the knowledge of how to use some of these tools; what they can do, and their powers and dangers.⚠️
- Bankless One of the best resources for learning about DeFi, becoming 'un-banked' and going west, like raiding regen vikings into the new frontier of finance to defile banks and slay Moloch. Perhaps begin here if you're just starting out. They often have educational quests around DeFi strategies in their newsletter. The podcast is fantastic!
- Gitcoin Quests We ❤️ Gitcoin (who doesn't) and the alpha release of their new Quests system is live and is an amazing resource for levelling up your crypto game. You get ranked and can claim an NFT for each completed quest.
- ETH Build For the more curious or tech hungry - learn about cryptography, smart contracts and how all this stuff works behind the scenes. All in an interactive drag & drop interface! All hail @austingriffith
- scaffold-eth If you want to get your hands dirty with the nuts and bolts of DeFi and maybe try your hand at building the next Uniswap or Aave, this is one of the best places to start.
👨🌾 Yield Farming
One of the 'magic' money sides to DeFi is Yield Farming. Earn interest and passive income through depositing your assets into a wide variety of protocols to provide liquidity for exchanges and lending platforms. You can also borrow against your assets and earn yield in platform tokens & stablecoins.
Borrowing against your assets is a form of CDP (Collateralized Debt Position) and you can read more about it here 👀
On to the yield farming...
- Reflexer Borrow against Ether for $RAI.
- mStable Earn interest by staking mUSD or mint mUSD for farming in other pools.
- Yearn Yield farming on autopilot. Deposit assets and Yearn will automatically farm for you.
- Curve Deposit stablecoins to earn trading fees and $CRV.
- Balancer Earn $BAL by staking your tokens in Balancer pools.
- Aave Borrow against or lend many different crypto assets (Ethereum & Polygon).
- Compound Borrow against crypto assets, lend crypto assets, and farm $COMP.
- MakerDAO Borrow against crypto assets and lend crypto assets for $DAI.
- Ampleforth Farm $AMPL by providing liquidity and staking.
- Cream Lend and borrow a variety of assets while earning $CREAM.
- SushiSwap Farms A rapidly evolving, multichain (10!) DeFi platform.
- Agave Finance the DeFi lending protocol on xDai. Sweet, sweet DeFi from 1Hive
- CoinGecko Top 100 DeFi by Market Capitalization
- Nexus Mutual Get coverage on your assets against a smart contract hack.
- Bridge Mutual Coverage for your crypto assets plus earn yield & shares in profit in exchange for coverage liquidity.
- Zerion A dashboard and mobile app for tracking your DeFi transactions and assets.
- Zapper A dashboard for managing your DeFi assets and liabilites.
- DeBank A DeFi dashboard that includes ecosystem info.
- InstaDapp Manage your DeFi assets while leveraging powerful tools.
- DeFi Saver MakerDAO and Compound management, including the ability to automatically save a CDP (Collateralized Dept Position) from being liquidated.
- DEXTools Packed full of useful info and charts on pretty much every token with free and paid subscriptions.
- FURUCOMBO DeFi legos. Allows you to combine multiple actions into one transaction.
- DeFi Safety Analysis of each platform.
- Rotki A privacy-preserving and open source portfolio tracker and analytics tool.
- TokenSets Use Set asset management tools to manage crypto portfolios.
- Token Tax TokenTax automatically calculates your crypto taxes, and supports generating taxes for DeFi protocols.
- Chainlist Chainlist is a list of EVM networks. It makes it very easy to add new EVM networks (Polygon, xDai, Fantom, Optimism, etc) to a Web3 wallet like MetaMask.
- Earni.fi Not DeFi per se BUT lets you watch your wallets for airdrops. 1 is free, up to 10 is $20p/m but pays for itself if you're active in DeFi, Governance & DAOs.
- Umbra (BETA) - Send stealth payments so only the sender and recipient know who received funds.
📈 Decentralized Trading
- Uniswap Exchange Trade between Ethereum based assets.
- 1inch Exchange Finds the most optimal route to trade between tokens.
- Honeyswap 🍯A Decentralized Exchange on xDai. Created by the best buzzin bees in the buzziness, 1Hive 🐝
- Matcha Seamless, user-friendly trading.
- Curve Swap between stablecoins with very low slippage.
- SushiSwap A PolyDEX(?!) & DeFi platform supporting 10 networks and uses ArcherDAO MEV Shield to prevent being frontrun. Supported networks include: Ethereum, Polygon, Fantom, xDai, Avalanche, to name a few. Also offers lending and borrowing.
- QuickSwap A decent DEX on Polygon but I have found 1Inch and quite possibly Sushi to be a fair bit cheaper on fees.
- Slingshot A DEX Aggregator similar to 1inch, but returns slippage to users, resulting in positive slippage and better prices for trades
💳 Crypto debit cards
- Monolith - A european defi account - non-custodial ethereum wallet and a debit card in one.
- Plutus - Bank on crypto; receive a UK sort code and account number or European IBAN within minutes. Swap ETH to FIAT and move it to your Plutus card. Earn 3% rewards in PLU.
- Trezor - A great wallet. Can also be used to sign encrypted messages, as 2FA with U2F, a password manager, etc.
- Ledger - Enjoy security, ownership and ease of use for your crypto with Ledger.
- Argent - Phone wallet with built in dapps, trading, advanced security, and recovery features.
- Metamask - A browser based wallet that lets you interact with decentralized apps from your favorite browser. Supports Ledger and Trezor. Mobile wallet also available, although not recommended. Argent wallet is a much safer option for mobile devices.
It is recommended to use a Ledger or Trezor with MetaMask in the browser. If you don't have one, buy one (direct from the manufacturer), use it via MetaMask and just use MetaMask itself as a burner wallet. You won't regret it.
🎯 Now What?
Get goin and get learning, doing and freeing yourself from the shackles of the steaming pile of broken institutions we call banks. An amazing place to start is either Bankless & Gitcoin Quests (see 👩🏫 Education) to make sure you've got your wits about you when venturing out into the frontier.
Remember: Always always Do Your Own Research. Not Your Keys, Not Your Coins. Always keep your seed phrase safe, private, never share it and never store it digitally.
- If there are links & resources you would like to add to the page above, you are free to submit them here. (and get rewarded if accepted ofc)
- If you have any questions or need any help, you are welcome on our Discord :)