Category: DeFi
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Optimistic Rollups vs. ZK-Rollups: What’s the difference?
The Ethereum network has been a pioneer in the world of decentralized applications (dApps) and smart contracts. However, as the network has grown in popularity, it has faced significant scalability issues. Slow transaction times and high fees have become a bottleneck for developers and users alike. To address these challenges, various Layer 2 scaling solutions…
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What is Ethereum Virtual Machine (EVM)?
In the ever-evolving landscape of cryptocurrency and blockchain technology, the Ethereum Virtual Machine stands as a pivotal and transformative component. It plays a crucial role in enabling the execution of smart contracts, which have redefined how decentralized applications (DApps) operate on the Ethereum blockchain. The EVM operates on a stack-based architecture, meticulously executing code generated…
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What is DeFi 2.0?
The world of finance is undergoing a transformative revolution, and at its forefront is DeFi 2.0, redefining banking as we know it. Decentralized Finance (DeFi) emerged as a disruptive force in 2020, challenging traditional banking with its promise of transparency, immutability, and the elimination of trusted intermediaries. Now, with the advent of DeFi 2.0, we…
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DeFi Risks: Smart Contract-Based Risks
The world of Decentralized Finance (DeFi) has revolutionized traditional financial systems by leveraging smart contracts on blockchain technology. However, with innovation comes inherent risks. In this exploration of DeFi risks, we delve into the technical vulnerabilities of smart contracts, highlighting their non-legally binding nature and the potential for irreversible consequences. We examine historical exploits that…
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DeFi Risks: Operational Risks from Blockchains
DeFi apps depend on public blockchains to execute transactions and resolve contracts. Ethereum is currently the most popular base layer for DeFi, with approximately $46 billion in collateral used in its smart contracts. Other blockchains are also hosting DeFi apps and attempting to compete with Ethereum. However, the smooth operation of these apps relies on…
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DeFi Risks: Governance and Regulatory Risks
Decentralized Finance (DeFi) has ushered in a new era of financial innovation, promising greater accessibility and autonomy for users. However, as the DeFi ecosystem grows in complexity and scale, so do the associated risks. In this second part of our series on DeFi Risks, we delve into two critical aspects: Governance and Regulatory Risks. These…
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DeFi Risks: Paradox of DeFi
Decentralized Finance (DeFi) does come with its own set of challenges. Despite the promise of interoperability, DeFi has resulted in a concentration of nearly all projects on the Ethereum blockchain, introducing a new type of concentration risk. In the pursuit of removing human involvement and automating processes, new risks have arisen or existing ones have…
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What is layer 1 in blockchain?
The fundamental framework of any system based on blockchain technology is the Layer 1 blockchain, as it sets the fundamental rules and protocols. While they may have certain drawbacks, Layer 1 solutions remain paramount in preserving the core principles of blockchain: decentralization and security. Moving forward, it is anticipated that improvements will center around boosting…
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What is DeFi and how does it work?
Discover how DeFi is revolutionizing the traditional financial system by empowering individuals with greater financial freedom and control through innovative blockchain technology and decentralized applications. Is DeFi a cryptocurrency? It is a new paradigm of financial services built on blockchain technology that provides users with financial services without intermediaries. While cryptocurrencies are an essential component…
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DeFi Powered by Blockchain: Past, Present and Future
The emergence of the Internet has opened up numerous opportunities in various fields, including finance. However, traditional financial systems have yet to keep up with other technological advancements. Despite the widespread availability of the Internet, many individuals still need access to banking services, with an estimated 1.7 billion people worldwide being unbanked, according to the…