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DeFi is short for Decentralized Finance (Decentralized Finance in English). It is a new way of doing finance that allows users to have greater control of their digital assets without the need for intermediaries. Instead of relying on banks or traditional financial institutions, DeFi uses blockchain technology to create a decentralized financial network that allows users to perform financial operations such as lending, trading, saving, and much more. In short, DeFi allows people to take control of their finances without having to rely on third parties.

A DeFi Wallet is a digital wallet that allows you to store, send, and receive cryptocurrency on a DeFi network. These wallets give you greater control and access to your assets, allowing you to make transactions quickly and securely. Some of the main platforms for DeFi Wallets are MetaMask and Ledger Live. You can learn more about Decentralized Finance in our DeFi course free of charge or Master Web3MBA. In Decentralized Technologies.

DeFi primarily uses blockchain technology, which is the underlying technology behind many cryptocurrencies. Cryptocurrencies are created and transferred through blockchain technology, allowing for the creation of a decentralized financial network without the need for intermediaries. In addition to blockchain technology, DeFi also uses smart contracts (Smart Contracts), which allow the automation of financial transactions. You can answer more questions about the Decentralized Economy in our DeFi Course.

There are many DeFi protocols known, but some of the most prominent are Uniswap, Aave, and Compound. Uniswap is a decentralized exchange that allows users to trade cryptocurrencies without the need for intermediaries. Aave and Compound are DeFi lending platforms that allow users to borrow and lend cryptocurrency. These protocols offer greater transparency, efficiency and profitability for users, since they eliminate the need for intermediaries and reduce operating costs.

The main difference between DeFi and traditional financeis that DeFi is decentralized, which means that it does not require intermediaries. Transactions are carried out in a more transparent and efficient way thanks to the use of blockchain technology and smart contracts. In addition, in DeFi users have greater control of their assets and financial services are more accessible.

The DeFi benefitsThey include greater transparency and efficiency, since transactions are carried out in a decentralized manner and without intermediaries. Users also have greater control of their assets and can access more affordable financial services, such as loans, savings, and insurance. Also, DeFi is more inclusive as it can be used by anyone with internet access and a digital wallet.

For mitigate DeFi risks, it is important to do your research carefully before investing. Make sure you understand the risks associated with each investment and use reliable and secure DeFi platforms. It is also important to have good security of your wallet, such as using strong passwords and enabling two-factor authentication.

All the decentralized financeThey have made a huge impact on the cryptocurrency ecosystem by offering new ways of interacting with blockchain technology and digital tokens. DeFi protocols allow users to carry out various financial operations without the need for traditional intermediaries, thus providing greater autonomy and control over their assets. Additionally, the rapid growth of DeFi has stimulated the development of new solutions to improve the scalability, security, and interoperability of cryptocurrencies. In short, DeFi has fueled cryptocurrency innovation and adoption, learn how with the free getting started course.

The governance tokens They are those that offer the owner the right to participate in the decision-making of a project. Most DeFi ecosystems use these governance systems to submit improvement proposals (ideas on how the network should be updated or new features) and to vote on them. In this way, it is the community and the owners of these tokens who decide what the next step in the roadmap is.

The Smart Contracts are scripts (computer codes) that allow the automation of agreements and transactions by defining rules and conditions that are executed autonomously. These programs are developed using specific programming languages ​​and run on blockchain platforms.

La Account Abstraction It is an improvement of Ethereum that allows the creation of an infrastructure capable of offering smart accounts controlled by smart contracts.

Although they share common languages, most blockchains have programming languagesown. For example, Ethereum uses Solidity (a Turing Complete language) and Vyper (based on Python), Cardano uses Plutus and Rust which is widely used by Bitcoin, Polkadot and Near.

Smart Contracts work through code execution on a blockchain platform. The terms and conditions of a contractThey are established in the Smart Contract code, which is executed automatically when the previously established conditions are met. The execution of the contract is carried out in a decentralized network and its transparency and security are supported by cryptography.

The main objective of Smart Contracts is to allow the autonomous and transparent execution of agreements and transactions, without the need for intermediaries and guaranteeing that the conditions established in the contract are fulfilled automatically. According to Nick Szabo's glossary, it is used to refer generically to any type of digital data. Data that can be a key, a credential, a contract, a program, or a wide variety of other things.

All the Advantages of Smart Contracts They are multiple, including the elimination of intermediaries, the reduction of costs and times in carrying out transactions, transparency and security in the execution of agreements, and the possibility of automating complex processes. In addition, Smart Contracts can be programmed to run autonomously, without the need for human intervention.

The Smart Contracts are implemented on the Ethereum platform through Ethereum Virtual Machine and the use of specific programming languages, such as Solidity and Vyper.

The ERC-20 tokens They are a token standard created on the Ethereum platform that follow a set of pre-established rules. These tokens are used to represent any type of asset, such as a cryptocurrency or a financial asset. Bit2Me offers support for ERC-20 tokens, allowing its users to transact many of these tokens easily and securely.

The ERC-721 tokens They are non-fungible tokens created on the Ethereum platform that are used to represent unique and unrepeatable assets, such as digital works of art.

The ERC-1155 tokens They are a token standard on the Ethereum network that allows the creation of multiple tokens at the same address. This means that a smart contract can create various types of tokens that can be exchanged and transferred between addresses in a single transaction. Furthermore, ERC-1155 tokens can be fungible or non-fungible and can also have different properties and characteristics. This standard was created to improve efficiency and reduce costs in creating and managing tokens on the Ethereum network.

A smart Insurance Contract is a smart contract which is used to create insurance contracts autonomously and automatically. These contracts are based on the logic of Smart Contracts and are executed automatically when certain pre-established conditions are met.

The Smart Insurance Contracts They work by programming a set of conditions that must be met for the contract to be activated. These conditions can be anything from a natural disaster to a car accident. Once the contract is activated, it is automatically executed and the insurance beneficiary receives the corresponding payment.

The Smart Contracts are used in a DAO to facilitate decision-making and the management of the organization's assets autonomously.

The Oracles They are systems that allow Smart Contracts to access information external to the blockchain, such as sensor data or financial market information. These data are necessary for Smart Contracts to be able to execute their conditions correctly.

A Contract of smart futures It is a type of Smart Contract that is used to fix the price of an asset at a future time, regardless of market fluctuations. These contracts are commonly used in the financial market. They are activated through the programming of a set of conditions that must be met. Once activated, it will serve, for example, for the contract to guarantee that the agreed price will be maintained, regardless of market fluctuations.