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DeFi glossary

Understanding the language of DeFi is essential to interacting in the DeFi community. Here is a brief glossary of terms that you will encounter throughout this course and your interactions …

Stablecoins

Cryptocurrencies such as Bitcoin (BTC) were originally intended to serve as money. Historically, different objects have served as money: fiat money issued by governments, gold, cigarettes during wars or in …

DeFi vs CeFi

As finance has evolved over time there has been a trend towards greater levels of centralisation. Trusted intermediaries are at the core of the financial system. Banks, Exchanges, and government …

How does financial trading work?

Humans have been trading with each for thousands of years. Many human institutions, such as language for example, evolved so that we could better trade with each other. Money is …

What are Smart Contracts Used For?

The idea of smart contracts dates to the 1990s. Writing in 1994, the computer scientist Nick Szabo defined a smart contract as “a computerised transaction protocol that executes the terms …

How do Public and Private Keys Work?

Public and private keys are the key concepts of asymmetric cryptography – a method used to protect identities and data from unauthorized access. Using a cryptographic algorithm, the keys are …

What are DAOs?

The Governance of DeFi DeFi projects and protocols need to be governed. Governance are the rules by which group decisions are made, executed and enforced. These governance rules are necessary …

How to Value DeFi

The Oxford English Dictionary defines value as being, ‘worth or desirability or utility’. Price is defined as being ‘the amount of money expected, required or given in payment for something’. …

4 of the top DeFi cybersecurity risks

What is a cybersecurity risk? Cybersecurity risk is the probability of exposure or loss resulting from a cyber-attack or data breach (e.g. direct loss of assets and sensitive information, or …

What are the risks of DeFi?

The DeFi industry has only emerged in the past few years. Yet in that short time there has been rapid innovation in decentralised business models and technologies. There is little …

What is yield farming?

Holders of cryptocurrency have a choice between leaving their funds idle in a wallet or locking the funds in a smart contract in order to contribute to liquidity. The liquidity …

How does market risk work?

Market risk is defined as the risk of losses arising from movements in market prices. It is essentially a very simple concept, depending on which side of a transaction we …

What are interest-bearing securities?

Before looking at ways you can put capital to work by borrowing and lending in DeFi, it’s a good idea to review how it works in conventional financial markets, or …

Why swap to a stablecoin?

In this article we explore swapping between cryptocurrencies and stablecoins. We first introduce decentralised exchanges, where you can swap between cryptocurrencies using smart contracts. Then we introduce stablecoins, which are …