TOP 10 DEFI CONCEPTS EVERYTHING YOU NEED TO KNOW Decentralized finance or DeFi is an umbrella term for financial products built on top of decentralized, open-source blockchains. Here are the ten core concepts that will help to understand DeFi.
SMART CONTRACT A computerized program of Blockchain that can self-execute when particular conditions are met. Once a smart contract is deployed to the blockchain, DApps execute themselves with no human intervention.
WALLET Non-custodial Wallets - full ownership and responsibility of assets. Custodial wallets - Third-party stores private keys for the user.
GAS Gas is a Unit that calculates the computational effort demanded to accomplish a transaction on the Ethereum network. Gas prices are indicated in gwei, which are worth 0.000000001 ether.
LIQUIDITY POOL Liquidity pools are an automated market-making strategy used in decentralized exchanges like Uniswap, Curve, Kyber, and Bancor.
YIELD FARMING Yield farming endeavors to maximize returns by gaining native governance tokens on protocols, and typically involves recursive investing to execute this.
STAKING DeFi Staking involves depositing liquidity pool tokens into a smart contract to earn rewards. Staking is similar to earning interest from a bank account.
www.cryptocurrencyscript.com