The relationship between defi and Ethereum
what is Ethereum:
Ethereum is an innovation based on the application of technologies and concepts in bitcoin to computers. Ethereum itself imitates a lot of bitcoin technology to maintain the computer platform. blockchain technology is one of them
Ethereum platform can safely run any program users want
advantages of Ethereum over other competitive currencies before Ethereum appeared, some digital currencies imitated bitcoin. However, these projects have their own shortcomings, they can only support one or several specific applications at the same time< However, the reason why Ethereum can surpass the limitations of these projects in the past is because of the core idea of Ethereum
what Ethereum wants to implement is a blockchain protocol with built-in programming language. Since it supports programming language, in theory, any blockchain application can be defined with this language, and then run on Ethereum's blockchain protocol as an application
The design of Ethereum is very flexible and adaptable
Ethereum target sets the advantages of blockchain technology, in order to add the advantages of blockchain, such as decentralization, openness and security, to almost all computing fields
blockchain applications of Ethereum
Ethereum has many blockchain applications, such as digital applications of gold and stocks, financial derivatives applications, DNS and digital authentication, etc
Ethereum has achieved more than 100 blockchain applications by many start-ups
Ethereum has also been closely watched by some financial institutions, banking consortia (such as R3), as well as large companies like Samsung, Deloitte, RWE and IBM. As a result, a number of blockchain applications such as simplified and automated financial transactions, merchant loyalty index tracking, and gift cards designed to achieve decentralization of electronic transactions have emerged
the relationship between Ethereum and blockchain:
Ethereum is a programmable blockchain
Ethereum does not give users a series of preset operations (such as bitcoin transaction), but allows users to create complex operations according to their own wishes
in this way, Ethereum can be used as a platform for various types of decentralized blockchain applications, including but not limited to cryptocurrency
like other blockchains, Ethereum also has a peer-to-peer network protocol. Ethereum blockchain database is maintained and updated by many nodes connected to the network. Each network node runs the Ethereum simulator and executes the same instructions. Therefore, people sometimes call Ethereum "world computer"
Ethereum Community Foundation (ECF) is a non-profit organization. Its original idea was to give community projects a bonus to support incubation of early projects and research. Then in 2018, omisego, Golem, status, maker, Web3 (Polkadot), cosmos and ef (Ethereum Fund) were set up in Tokyo as consultants
ECF 2.0 is the upgrade of ECF, which has two core goals:
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coordinate community relations through various harmonious ways, such as bonus, strategic and business support, and community activities
in order to become an open capital network, ECF emphasizes its initial vision, which is to form a network with various funds to realize the support and contribution to the community
In addition, ECF 2.0 upgrade will not only support non-profit infrastructure projects, ecation programs, instrial community activities, but also support application and tool development, and even commercial projectsusers in the defi ecosystem have complete control over the assets and participate in the defi with the help of P2P network and DAPP
advantages of defi
the popularity of defi is inseparable from its unique advantages. Defi mainly includes:
1. Open loan agreement
compared with the traditional credit structure, open and decentralized loans have many advantages, including integration of digital asset lending, digital asset mortgage, real-time transaction settlement and novel secured loan methods, no credit check, standardization and interoperability. The purpose of secured lending using open protocols such as maker and Dharma is to rece the risk of counterparties without intermediation by relying on the minimum amount of collateral provided by Ethereum
2. Issuance platform and investment
famous securities issuance platforms such as polymath and harbor provide the framework, tools and resources for issuers to issue marked securities on the blockchain. They have prepared their own standardized token contracts for securities (i.e. st-20 and r-token), which are unique in terms of automatic compliance and customizable transaction parameters and can meet regulatory requirements. Similarly, they are integrated with service providers (e.g., broker dealers, custodians, legal entities, etc.) to assist issuers in issuing
3. Decentralized forecasting market
decentralized forecasting market is one of the most attractive components of open finance, which is highly complex but has great potential. August launched the anti censorship forecast market last year, and other platforms like gnosis began to follow suit. Forecasting market has long been a popular financial tool for avoiding risks and speculating on world events, and decentralized forecasting market can also do this
4 exchanges and open markets
exchanges in open finance mainly consider decentralized exchange (DEX) protocol and P2P market. First of all, DEX is a P2P asset exchange between two parties on Ethereum, in which no third party acts as an intermediary, such as coinbase or other centralized exchanges. DEX also uses some highly innovative methods to exchange tokens, such as atomic exchange and other unmanaged methods, to exchange one asset for another with minimal settlement time or risk. The most popular DAPP in Ethereum is the decentralized exchange IDEX. Although many "DEX" claim that they are indeed decentralized or unmanaged, be careful before using them. The P2P market on Ethereum has great long-term potential, and may eventually cover the market of local digital assets and marked real-world assets
5. Stable currency
stable currency is booming in the digital asset market by issuing warrants, auditing its reserves and managing its price linked new model. Stable currency is just a token issued by the blockchain, which aims to keep a stable link with external assets (mainly US dollars, gold or other assets). The stable currency of encrypted mortgage includes Maker & # 39; S Dai, where the underlying asset (e.g., ETH) is over mortgaged relative to the borrowing asset (DAI) according to the current mortgage rate. So far, stable currencies backed by legal tender are the most popular because of regulatory compliance and no audit risk, such as tether, usdc and Gemini dollars
disadvantages of defi
on the one hand, the development of defi is restricted by the performance of the underlying public chain. The current defi project is mainly built on the Ethereum network. At present, the performance bottleneck of Ethereum is relatively prominent, and there is still a long way to go to break through the bottleneck. Under such a situation, those projects with high performance requirements will be in an embarrassing situation. On the other hand, compared with traditional financial procts, decentralized financial projects are much more difficult to use and have higher cognitive requirements for users, which will also greatly affect the development speed of defi. In addition, the roller coaster like ups and downs of defi projects (sushi, yam, yfii, etc.) also make people wary of its security. How to continuously accumulate user trust is also the focus of attention in the future.
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almost every supporter of encryption start-ups has a trend, that is, to use the decentralized value of blockchain technology to sell their business fundamentals
in this paper, we will explain the differences between decentralized financial agreement business and traditional business:
we will mainly discuss two aspects:
1) what is the real meaning of defi
2) what are the types and main differences of defi platforms< Users of traditional financial systems often want to build a system that is easier to access, more transparent, lower transaction costs and less dependent on intermediaries. To build such a more equitable financial system, banks, loans and derivatives must undergo fundamental changes. In addition, a decentralized ecosystem, such as defi, is needed. It promotes P2P lending, eliminates centralized control, and provides users with financial freedom
recently, in the field of cryptocurrency, there are many discussions about defi. It provides financial services to the world: loans, derivatives and other procts. Moreover, the role of traditional financial intermediaries has weakened, or even failed to play a role. Proponents of a decentralized financial system see defi as a good alternative to traditional lending. Some have called it the future of borrowing
defi is built on public blockchains such as bitcoin network and Ethereum. It has become one of the "core drivers" on the Ethereum network. By using unlicensed distributed networks, the defi platform converts financial procts into untrusted protocols that can be accessed by anyone anywhere in the world. People who don't have an account in the bank can also use the defi solution to loan and borrow assets, as well as to trade with financial instruments
open source platforms provide users with great benefits, including transparency, cheap cross-border transactions, no credit checks and less censorship. Anyone can carry out financial activities because there is no geographical restriction<
the degree of decentralization of defi
in recent months, the introction of defi solutions has proliferated. They have different models and their degree of decentralization is also different. Compared with other models, some defi models have poor dispersion. This is because only a few of their components are decentralized, while the rest are still centrally controlled by the company
the establishment of agreement, non trust, price supply, determination of interest rate, provision of liquidity of margin call and start-up of margin call are the key components of defi agreement. They determine the degree of decentralization
if there are a large number of decentralized components, then the defi protocol is more decentralized than other models. Such a protocol will give users complete control over their digital assets and get rid of centralized control. So far, there is no single defi protocol that disperses all components
each defi protocol is assigned a category according to the number of distributed components:
centralized finance (cefi)
defi solutions are usually unmanaged, which means that users can control their funds and be responsible for their security. Instead, cefi is hosted. The central system is responsible for keeping the assets of users and ensuring the safety of users' funds
when it comes to loans or loans, users can't control any aspect of funds. The interest rate is determined by the central government, and the liquidity of margin call is provided by the central system or authorities. Cefi procts use centralized price supply, and it is also permitted to issue margin call. Thank you very much for your patience. If you have any help, please accept it. I wish you a happy life! thank you!
The total number of atomic coins issued was 100 billion, and the total number of atomic coins was 1; 10 mapping
token is a tool to measure the transmission and transformation of value. As the parties participating in the construction of the system, token is the qualification basis for the distribution of rights and interests. Atomic chain will issue endogenous currency, which we call ATOS. In the initial stage of the system, it will be released based on erc20. In the medium-term stage, the 1:1 smooth migration to the main network of the atomic chain. Erc20 is a standard protocol on Ethereum network. It uses the protocol interface to create a token, which is used as the basis of warrant and qualification of each role. ATOS is the basic circulation value of the whole ecosystem. Through ATOS, users can realize transaction, value transfer, enjoy value preservation and increase, and vote. Atos is also the basic reward condition for each role to participate in. Through the reward, the enthusiasm among the roles can be stimulated, and the virtuous cycle of the ecosystem can be promoted. In order to fight against inflation and maintain and increase the value of contracts, we will issue a fixed number of ATOS. Through ecological operation, ATOS will maintain a certain minimum value. We use push in the ecosystem to push the ecological event report according to a certain period< ATOS is divided into circulation pool and lock pool. Under the condition of constant total amount, the total amount of market circulation and lock pool will maintain a certain proportion, so as to achieve the balance point within the pool
More and more people want to steal money by attacking smart contracts. They are taking advantage of the loopholes when smart contracts are combined
in 2020, the total amount of embezzlement or theft in the attack on defi has reached 36 million US dollars. But because dforce attackers returned the stolen $25 million, the actual amount was about $11 million
compared with the early days of Ethereum, the average loss value of each hacker attack has decreased significantly. Eight of the 10 attacks in 2020 are worth less than $1 million
defi
in the early days of Ethereum, most attacks were based on finding indivial vulnerabilities, which enabled attackers to freeze or exhaust smart contracts. This was the case with the notorious Dao hacking incident in 2016, in which $160 million eth was stolen and Ethereum finally forked out. Similarly, the multi signature attack of parity in 2017 caused hackers to steal $30 million, and $150 million in parity's wallet was frozen, all of which were the consequences of such vulnerabilities
the loopholes of such smart contracts are still exploited from time to time. Recently, an attacker succeeded in stealing all Veth from token contracts, making a profit of $900000 just by exhausting the veth-eth uniswap pool. But this is a simple mistake caused by Veth, because there is a logical error in the way Veth modifies the erc20 token standard
generally speaking, the security has been improved, especially for the projects with high attention. Their security improvement is driven by the user's expectation of audit and the improvement of testing tools. Recently, the biggest security problem in defi is that dforce's $25 million digital assets have been stolen from the lending market. However, the funds were withdrawn because the attacker's IP address was found and shared with the Singapore police
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Defi is the abbreviation of decentralized finance, which refers to rebuilding the ecosystem of protocols, platforms, applications and tools of traditional financial procts outside the traditional financial system
the defi solution is not provided by banks, but is built using open source software and non censored networks. As a result, the defi proct is essentially transparent and open to anyone who can connect to the Internet. Defi procts enable the world to participate in financial activities (such as consumption, borrowing, lending, gambling and trading) in a point-to-point manner without relying on intermediaries such as banks and governments
the value of growth in the field of defi is more than 675 million US dollars, which is locked in the defi agreement. In the past 12 months, many people have been closely following the development of this field. Defi is becoming a parallel financial system with the traditional central bank, Santander bank, Deutsche Bank and pension funds
almost all the defi solutions are built on Ethereum, which is an open blockchain platform and the best in terms of development and active users
the defi solution is supported by blockchain technology, using the most powerful features of the technology: programmable digital assets, such as bitcoin (BTC) and Ethereum (ETH). These digital assets have monetary value, mainly because of the value storage characteristics. Because these assets are programmable, we can lock them into smart contracts as collateral (similar to home mortgages)
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