Decentralized finance, or “DeFi,” is a burgeoning ecosystem of financial protocols built on Ethereum that lets users do everything from lending and borrowing crypto to earning interest on their digital assets.

While DeFi protocols have been around for a few years, they exploded in popularity in 2020 as the value of Ethereum (ETH) surged and more users began flocking to the space in search of yield.

So what exactly is DeFi? In this explainer, we’ll break down everything you need to know about this growing ecosystem of financial protocols and applications.

What is decentralized finance?

Decentralized finance, or “DeFi,” refers to the shift from traditional, centralized financial systems to peer-to-peer finance enabled by decentralized technologies built on the Ethereum blockchain.

With DeFi protocols, anyone with an Internet connection can access financial services that have traditionally been controlled by central intermediaries like banks, brokerages, and exchanges.

By deploying smart contracts on Ethereum, DeFi developers can build decentralized applications (dapps) that let users lend, borrow, trade, and invest digital assets without having to go through a middleman. And because these protocols are built on the Ethereum blockchain, they are available anywhere in the world 24/7.

What are the benefits of decentralized finance?

The rise of DeFi protocols has unlocked a world of new possibilities for crypto users. For example, with MakerDAO’s Dai stablecoin, users can take out loans backed by crypto collateral without having to go through a traditional lending institution.

Compound lets users earn interest on their cryptocurrency holdings, while Uniswap lets them trade crypto tokens directly with each other without having to use a centralized exchange.

These protocols also open up new opportunities for yield generation and risk management. By staking their crypto assets in lending pools or providing liquidity to decentralized exchanges, users can earn interest on their digital assets while helping to power the DeFi ecosystem.

And because these protocols are built on the Ethereum blockchain, they offer a high degree of transparency and security not found in traditional financial systems.

What are some popular DeFi protocols?

There are currently over 2,000 DeFi protocols live on Ethereum, with new projects launching all the time. Some of the most popular protocols include:

MakerDAO: Maker is a decentralized lending platform that issues the Dai stablecoin, which is pegged to the US dollar. Users can collateralize ETH or other ERC-20 tokens to generate Dai, which can be used for payments or traded on decentralized exchanges.

Compound: Compound is a protocol that lets users earn interest on their cryptocurrency holdings. Users can supply ETH or other ERC-20 tokens as collateral and earn interest in the form of COMP tokens.

Uniswap: Uniswap is a decentralized exchange protocol that allows users to trade ETH and ERC-20 tokens directly with each other without having to use a centralized exchange. Users can also provide liquidity to Uniswap trading pairs and earn UNI tokens in return.

Synthetix: Synthetix is a synthetic asset platform that allows users to trade synthetic versions of real-world assets like gold, silver, oil, and even bitcoin (sBTC). These synthetic assets are backed by SNX tokens, which can be staked by users to earn staking rewards.

Aave: Aave is a protocol for lending and borrowing cryptocurrencies. Users can deposit ETH or other ERC-20 tokens into Aave’s liquidity pools and earn interest in AAVE tokens.

Or, they can take out loans against their crypto collateral and repay them with interest over time.

These are just a few of the most popular DeFi protocols currently live on Ethereum. For a complete list of projects, check out DeFi Pulse or The Block’s list of leading DeFi protocols.

Conclusion: Decentralized finance refers to the shift from traditional financial systems to peer-to-peer finance enabled by decentralized technologies built on blockchains like Ethereum.

First Bitcoin Capital is a hedge fund that allows investors to gain exposure to the cryptocurrency space without having to put their money directly into digital assets. The fund was launched in December 2017 and has since then gained over $600 million in assets under management.

The fund invests in a number of different digital assets including bitcoin, ethereum, Litecoin, and other altcoins. It also invests in ICOs, blockchain startUPS, and other companies that are involved in the space.

The fund is managed by a team of experienced professionals who have a deep understanding of the cryptocurrency market. They use a variety of strategies to generate returns for investors including long-term holding, active trading, and arbitrage.

The fund has generated strong returns since its inception with an annualized return of over 50%. This has made it one of the best performing hedge funds in the world.

First Bitcoin Capital is a great way for investors to gain exposure to the cryptocurrency market without having to put their money directly into digital assets. The fund has a team of experienced professionals who use a variety of strategies to generate returns.

The fund has generated strong returns since its inception and is one of the best performing hedge funds in the world.

When it comes to cryptocurrency, McAfee is a true believer. He has been an active promoter of Bitcoin and other digital currencies for years.

In fact, he even accepts Bitcoin as payment for his cyber security services.

So, what does McAfee have to say about Bitcoin?

In short, he is bullish on the future of Bitcoin and believes that it has the potential to reach $1 million per coin by 2020.

Here’s a look at some of his recent comments on the subject:

“When I predicted Bitcoin at $500,000 by the end of 2020, it used a model that predicted $5 trillion in market cap by 2021. BTC has already achieved $1 trillion and if the model is correct, BTC should hit $5 million by late 2020.”

“I am now predicting that Bitcoin will do to banks what email did to the postal industry.”

“Bitcoin is digital gold. It is better than gold because it is scarce, durable, portable, divisible, verifiable and fungible.”

Clearly, McAfee is a big fan of Bitcoin and believes that it has a bright future ahead. So if you’re thinking about investing in cryptocurrency, you might want to take his advice into consideration.