DEFI Yield farming — Banks are not the only places to earn interest!
TLDR; I made a wiki page here to guide anyone who is interested in getting their hands dirty on earning money with decentralized finance.
Traditional finance relies on institutions such as banks to act as intermediaries, and courts to provide arbitration.
DeFi applications do not need any intermediaries or arbitrators. Defi are powered by smart contracts running on blockchains. Smart contracts are like mini computer programs that specify the resolution of every possible dispute and functionality that traditional finance might provide.
Imagine replacing your relationship manager or broker with code!
This reduces the costs associated with providing, using, and accessing these products unlike traditional financial system which relies on the intermediaries making a profit, their services are typically absent from locations with low-income communities.
With DeFi, the costs are significantly reduced, and low-income individuals can also benefit from a broader range of financial services.
For example, I might only have $50 to save monthly, and I wish to achieve the highest possible interest yield for myself. If I were to look at financial product offerings by banks in my local country you simply can’t do much with $50. With DEFI, you can gain exposure to any kind of financial product instantly to grow your money no matter how small it may be.
Ready to get started?
I wrote it on notion so that anyone can contribute edits to it. I will update the document whenever I might have new insights or things to add as well.
Is this a new FAD?
It has been around for a while, look at what others are writing about it here last year. Things are picking up this year as 2019 was a year where crypto investors are mostly spooked from the 2018 crypto bubble crash.
What if I still don’t understand any of these?
Don’t worry, I didn’t understand any of it either. Just start taking notes and read voraciously, a lot of the terms will start to get repetitive and DEFI is no longer a mystery.