Week 22: DeFi!

"Never become desperate enough to trust the untrustworthy. "

DeFi! Short for Decentralized Finance, is a method of borrowing and lending that occurs without someone in the middle facilitating. In centralized finance, such as a bank, depositors give their money to a bank, and the bank lends that money out as interest. In DeFi, those looking to borrow cash or crypto have to put up some of their own crypto as collateral, and other lend them their crypto, all while being facilitated by code and algorithms, not an individual or bank. In this week's Tuesday Fix, I have four videos that walk you through what DeFi is, how it works, and what to watch out for!

1. DEFI - From Inception To 2021 And Beyond: In this video, Finematics takes you through the journey from Bitcoin to Ethereum to DeFi. He goes over the road blocks, key challenges, and breakthroughs that give DeFi today it's meaning.

Watch DEFI - From Inception To 2021 And Beyond (History Of Decentralized Finance Explained) by Finematics

2. How do LIQUIDITY POOLS work?: Because DeFi is decentralized, liquidity is needed from a large group of people to make the system work, since there is an absence of a centralized authority, or market makers. This video walks us through the purpose of these pools, and how they benefit those involved.

Watch How do LIQUIDITY POOLS work? (Uniswap, Curve, Balancer) | DEFI Explained by Finematics

3. What Is YIELD FARMING?: Yield farming name sounds a lot like something you would hear from a farmer, not a crypto investor. But the principles of farming and providing liquidity for DeFi are very similar, and this video walks you through the reasons why, and how people make money doing so.

Watch What Is YIELD FARMING? DEFI Explained (Compound, Balancer, Curve, Synthetix, Ren) by Finematics

4. What Is IMPERMANENT LOSS?: DeFi, liquidity, and yield farming all sound great and alluring to those new to the space, but with all new technologies and investments, there can be a lot of risk, especially if one is not prepared. This video walks you through one of the risks of DeFi, and how some decentralized protocols are implementing different ways for liquidity providers to avoid it.

Watch What Is IMPERMANENT LOSS? DEFI Explained - Uniswap, Curve, Balancer, Bancor by Finematics

Call to Action! Going from traditional investing, or even traditional Bitcoin and cryptocurrency trading to DeFi can seem like a big step, but after watching these videos, look into some of the protocols mentioned in the videos, you may be able to find great opportunity in this new field.

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