Defi is a term used to describe a collection of decentralized finance applications. These applications allow users to interact with the blockchain in new and innovative ways.
What is Cryptocurrency?
Cryptocurrency is a digital asset that uses cryptography to secure its transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin is the first and most well-known cryptocurrency.
What is Bitcoin?
Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.
What is Ethereum?
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference. Ethereum is also the birthplace of Defi.
What is a Blockchain?
A blockchain is a digital ledger of all cryptocurrency transactions. It is constantly growing as "completed" blocks are added to it with a new set of recordings. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Bitcoin nodes use the block chain to differentiate legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.
What is a Cryptocurrency Exchange?
A cryptocurrency exchange is a platform where users can buy, sell, or trade cryptocurrencies. Popular exchanges include Coinbase and Binance.
What is a Defi Exchange?
A Defi exchange is a platform where users can buy, sell, or trade Defi tokens. Popular exchanges include dYdX and Dharma.
What is a Defi Contract?
A Defi contract is a digital contract that allows two or more parties to interact with each other in a trustless manner. Defi contracts are written in code and executed on the blockchain.
What is a Decentralized Application?
A decentralized application (dApp) is an application that is run on a decentralized network. dApps are not controlled by a single entity and instead rely on a network of nodes to run them. Ethereum is the most popular platform for dApps.
What is a Token?
A token is a digital asset that represents a stake in a decentralized application or a right to access a specific function or service. Tokens are often used to raise funds for new dApps.
What is a DAO?
A DAO (decentralized autonomous organization) is a self-governing organization that is run by rules encoded into smart contracts. DAOs are powered by tokens and are often used to fund new dApps.
What is a DAICO?
A DAICO is a combination of a DAO and an ICO. DAICOs allow token holders to vote on whether to fund new dApps. If the vote is successful, the dApp is funded and the tokens are released to the investors.
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