DeFi: The DeFining Moment for Crypto

75% lower than where they were around two years back, in 2017

So what is the difference between Ethereum, Bitcoin and DeFi?

Well, none. Bitcoin and Ethereum are the original DeFi applications. Both are regulated by large networks of computers and are free from the reach of any central authorities. Several investors use bitcoin, like gold, as a hedge investment against inflation. Ethereum, on the other hand, has been instrumental and (sometimes, also controversial) in assisting(g startups in crowdfunding their operations.

DeFi in the crypto

Impact of DeFi On The Cryptocurrency Market

DeFi has become the news of the hour and many popular names in the finance world have some very insightful comments about the currency.

libertarian streak

Jill Carlson, a former

According to her “Crypto is not saving Venezuela." But bitcoin is being used by small numbers of people as a tool to protect against inflation and to send money to family members in other countries.

To cut the long story short, people are looking at DeFi as the antidote for many archaic issues that are present in the global financial services landscape. The demand for the DeFi coins has been heightening exponentially in recent times due to the revolutionary surge in the popularity of decentralized finance. The reason behind this is that they take away the burden of centralized control over financial services.

Why is DeFi Getting So Popular?

#1 They Pan Out A New Future For Finance


Thus, DeFi tokens can enable users of DeFi platforms and token holders in accessing the same services presented by traditional financial service providers.

#2 Stability

If you have been questioning the crypto market for its instability. DeFi might be able to provide you with some relief. Most of the DeFi tokens operate with smart contracts on the Ethereum blockchain. Therefore, DeFi has formidable capabilities for scaling up the value of ETH through corresponding price improvements. In case you are apprehensive about investing in DeFi tokens, then you can invest directly in ETH.

#3 Improved Standards In the Market

DeFi tokens could establish new precepts of transparency and access. At the same time, they decrease the costs of financial services alongside providing the benefits of mechanization. DeFi tokens essentially serve as a crucial use case of blockchain. Built on blockchain networks like Ethereum, DeFi tokens redefine the true capability of blockchain.

#4 Tokenization


Cryptocurrency tokens basically work as digital assets present on a blockchain alongside having several features and uses. Tokens are capable of enabling you to achieve different functionalities. The real estate tokens could help you accomplish fractional ownership of physical properties. On the other hand, security tokens could also assist effectively in managing digital shares in a particular application.

Difference between DeFi Coins And DeFi Tokens

Even though in the crypto industry DeFi coins and tokens are terms that are used quite interchangeably they have some key differences among them.

A DeFi coin is much like a digital version of a fiat coin — it transfers value in the course of a financial transaction. DeFi coins are built on and often named for their unique, native blockchain networks. In spring 2021, Maker, Compound, Uniswap, Aave, Chainlink, and Ankr are among the most popular DeFi coins.

DeFi tokens also transfer value, but not necessarily always in a financial sense. Utility tokens can be used as passwords to provide access to a resource, asset tokens can be used to represent physical assets such as real estate, and of course, there are non-fungible tokens (NFTs) that represent one-of-a-kind “items” such as digital art (For example, Nyan Cat recently sold for $600,000).


DeFi Token and Coins

Between September 2017 and August 2020, in almost three years the total value locked up in DeFi contracts has exploded from US$2.1 million to US$6.9 billion (£1.6 million to £5.3 billion). Since the beginning of August alone it has risen by US$2.9 billion.

This has driven a massive rise in the value (market capitalisation) of all the tradeable tokens that are used for DeFi smart contracts. It is now around US$15 billion, almost double the beginning of the month.

increased more than 20-fold, and Aave almost 200-fold

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