You’ve probably heard the term DeFi around in the cryptocurrency market at least once. Even the name of the Light DeFi (LIGHT) token carries that essential word.
But what is DeFi, after all?
This article will explain this innovative concept that recently revolutionized the cryptocurrency market and be responsible for practically bringing Light DeFi to life. Check it out.
The acronym DeFi is the abbreviation for Decentralized Finance, or even Decentralized Finance in its English translation. In the last two years, this term has gained popularity for representing financial solutions for various products and services, which did not widely offer in the cryptocurrency market until then.
From securities lending to the custody of digital assets, DeFi applications can be summed up as a valid link between the cryptocurrency market and products and services popular in the traditional financial market.
DeFi projects are usually developed through smart contracts in blockchain networks of other cryptocurrencies, such as Ethereum. With a market currently valued at $123 billion, Uniswap (UNI) is the premier DeFi token there. In Light DeFi (LIGHT), the token was developed through the Binance Smart Chain (BSC) network.
Smart contracts
One of the main characteristics of DeFi projects is linked to the type of protocol these applications use to verify transactions in the market, the smart contracts.
Also known as smart contracts, DeFi projects operate independently and without the need for intermediaries to complete transactions through blockchain technology.
Using self-executing smart contracts, DeFi applications allow you to create blockchain deals with conditions that only exist in that trade. Thus, transactions through smart contracts tend to be faster and cheaper.
Types of DeFi Applications
Five types of DeFi projects are considered the main ones in the cryptocurrency market, although numerous concepts and classifications for these applications prevail.
Decentralized Exchanges, also known by the acronym DEX, represent the most famous type of DeFi applications that currently exist on the market. Seeking to decentralize the cryptocurrency market completely, some DeFi platforms have developed DEX exchanges, where users trade cryptocurrencies without intermediaries; UniSwap, for example, is a DEX, just like PancakeSwap.
In addition to DEX exchanges, stablecoins are considered another popular type of DeFi design on the market and classified as a cryptocurrency with a price linked to another asset, such as the dollar. The real stablecoins such as Terra (LUNA) move more than US$1.4 billion daily.
Another type of DeFi famous in the cryptocurrency market is loan platforms. Using smart contracts, platforms like Rispar lend cryptocurrencies between users.
In addition to smart contracts, interoperability between blockchain networks is another important feature of projects classified as DeFi. ‘Wrapped Bitcoin (WBTC),’ or Wrapped BTC, is another famous project in this market.
While BTC cannot be negotiated on other blockchain networks, WBTC is supported on networks such as Ethereum. Through this “wrapped” creation of Bitcoin, the cryptocurrency gained DeFi powers.
DeFi applications have brought about a fundamental transformation in the cryptocurrency market from banking products to stock exchanges. Platforms that work with products known as forecast markets are also among the leading projects in the Decentralized Finance market.
Light DeFi (LIGHT)
Decentralized Finance Projects are known for presenting a solution involving the financial market and blockchain technology. With that in mind, Light DeFi (LIGHT) was conceived on August 8, 2021.
Light DeFi is a token that emerged to revolutionize the decentralized cryptocurrency market to develop a renewable energy source. Thinking about reducing the problems with data mining, the project intends to build a photovoltaic plant using solar energy.
At the same time that it will have a renewable energy source, Light DeFi bets on maintaining a mining process with clean energy considered a pioneer in the cryptocurrency market.
Developed through Binance Smart Chain, Light DeFi intends to be one of the largest DeFi projects in Brazil and the world. In addition to betting on intelligent contracts, LIGHT has a stake program to maintain transaction liquidity in the token network.
