66
edits
Difference between revisions of "Decentralized Finance"
Jump to navigation
Jump to search
→Kinds of protocols
| Line 24: | Line 24: | ||
Yield farm is a general term which indicates any protocol that provides interest earning to its users. The mechanisms thorugh which these interests are paid vary widely among different protocols but yield farms are the main reason why DeFi has gained such traction: they offer much higher interest compared to traditional finance. | Yield farm is a general term which indicates any protocol that provides interest earning to its users. The mechanisms thorugh which these interests are paid vary widely among different protocols but yield farms are the main reason why DeFi has gained such traction: they offer much higher interest compared to traditional finance. | ||
An honorable mention is made to [[Compound Finance]] which, in the summer of 2020, kick started yield farming through its COMP incentives liquidity mining program. This later caused dozens of other protocols to do the same and the subsequent period is known as DeFi summer 2020. | An honorable mention is made to [[Compound Finance]] which, in the summer of 2020, kick started yield farming through its COMP incentives liquidity mining program. This later caused dozens of other protocols to do the same and the subsequent period is known as DeFi summer 2020. | ||
=== Derivatives Exchange === | |||
The financial derivatives market is a huge portion of the traditional finance world. It is still pretty small in DeFi, but many protocols are beginning to offer derivatives trading like perpetuals or options. | |||