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DeFi: DeFi Is the New Big Thing in Crypto? What is the Top 5 DeFi platform?

DeFi, also known as Decentralized Finance, which is a peer-to-peer financial service that works solely on a blockchain platform with few or no intermediation such as: regulators, central banks, or individuals evolve. DeFi refers to the removal of any intermediary that acts or grants permission for any financial activity which differs from the existing centralized financial ecosystem which is fully decentralized and not subject to extensive control by any individual involvement.

What is DeFi?

DeFi is the most rewarding and riskiest part of the blockchain revolution, which perhaps explains why $3.7 billion has been invested in a project with a name like “SushiSwap.” The number of DeFi projects is growing exponentially and bringing a lot of fraud and failure along with its success. Here’s a look at some of the biggest and most prosperous.

What Is a Smart Contract?

Smart contracts are the building blocks of DeFi. Of course, that’s true of any blockchain project that isn’t a pure cash replacement, from NFTs to supply chain management tools. The self-executing contracts are immutable.

Once agreed to and the funds locked in, the contract will be paid without the need for a trusted intermediary and cannot be changed or canceled. Smart contracts can be complex enough to build decentralized apps and dumb enough to do what you said, not what you meant — caveat emptor given form.

What is Yield Farming and Liquidity Mining?

Yield farming and liquidity mining are the ways of putting your crypto to work for you. DeFi lending platforms and DEXs use liquidity pools to make loans and trades rather than matching a borrower with a lender or buyer with the seller. Crypto locked into these pools earns interest and fees. There are a lot of variations on this simple theme, some far more complex and lucrative — or damaging.

What Are the Top DeFi Blockchains?

DeFi is built on Ethereum, and Ethereum can’t handle its success. The No. 2 blockchain has gotten jammed by the number of transactions DeFi is sending it, making it slow and transaction fees sky high. So what do you do? Build a better blockchain. Here are some of the leading candidates to be Ethereum Killers — a nickname that’s perhaps overambitious but gives a sense of the goal: stealing its projects.

See here: What Are the Top DeFi Platforms?

PancakeSwap

Another AMM DEX, PancakeSwap is unusual in that it runs on the Binance Smart Chain rather than Ethereum, which means cheaper and faster trades. It has grown very quickly as the use of BSC has soared.

SushiSwap

SushiSwap is a decentralized exchange, or DEX — specifically, an automated market maker (AMM) that automatically sets the exchange rates between cryptocurrency pairs. It also has liquidity pools offering rewards.

Uniswap

Uniswap is a decentralized exchange on the Ethereum network that enables users to trade ERC20 tokens autonomously and swiftly. It does so through an algorithm that matches trades based upon supply and demand in a liquidity pool, removing middlemen and intermediaries.

Aave

Aave, formerly known as ETHLend, is an Ethereum-powered, decentralized peer-to-peer marketplace for borrowing and lending digital assets. The peer-to-peer lending platform enables borrowers and lenders to agree on the loan terms that are then executed using smart contracts.

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