The introduction of ethereum into the world of cryptocurrencies opened up several avenues for global developers. Unlike bitcoin, the king coin, ethereum provided a platform that developers could use to come up with different decentralized applications. One such area is decentralized finance that is providing financial services through smart contracts.
Since the inception of DeFi, the sector has continued snowballing. This year, in particular, has seen the DeFi sector record unstoppable growth. The industry achieved a significant milestone in February by surpassing the $1 billion mark in value. Now, the value of crypto DeFi markets is estimated at $4 billion, seeing as the industry has significantly benefited from the recent and ongoing bitcoin and ethereum bull runs.
As more crypto enthusiasts jump on board, many are looking into the DeFi space. DeFi tokens have not been left behind as individual and institutional investors all seem to be headed for that path. So, what is the craze all about and should you dive in?
Decentralized Finance Explained: What’s All the Craze About?
Most of the DeFi solutions are built on the ethereum blockchain. The industry contains a variety of solutions, all of which help to revolutionize the existing financial systems. Most DeFi solutions are presented in the form of dApps (Decentralized Applications), which account for faster, more affordable, and efficient financial transactions. DeFi has particularly made a mark in decentralized exchanges (DEXs) trading. These platforms allow crypto users to trade freely without intermediaries and restrictions, as is the case with centralized platforms.
So, what other areas does decentralized finance cater to?
- Lending Platforms- There are several available platforms that allow users to borrow and lend cryptocurrencies. Such platforms allow lenders to earn interest on their cryptocurrencies.
- Prediction Markets- DeFi allows traders to have a decentralized alternative to advanced traditional financial instruments. Prediction markets give users access to decentralized derivatives that are much like securities themselves. Advanced traders can use these instruments to predict the securities’ price, manage portfolio risk and leverage trading.
- Layer 3 Applications- These applications bring together several Layer 2 DeFi applications to form complex platforms. In so doing, Layer 3 applications allow for easier interactions among users and better usability.
- Insurance- Some DeFi solutions help users insure against several financial risks. Crypto enthusiasts can use platforms such as Etherisc to insure themselves against a variety of risks, including systemic risks, default risk, and price risk.
- Stablecoins- As the digital currency world continues thriving, investors are leaning towards coins that have a stable value. Developers are now using decentralized finance to come up with digital currencies with minimum volatility and which have their value pegged to fiat money or assets and commodities. Stablecoins work great as a unit of account in dApps, and some even provide excellent investment opportunities.
One of the reasons why crypto enthusiasts seem so crazed about DeFi is that the technology has found its way around financial regulators. Ever since the introduction of bitcoin, governments and other regulators across the world have been looking for ways to regulate the digital currencies. Although some countries have succeeded and have regulatory measures in place for specific coins, DeFi is helping to solve this problem.
Cryptocurrency, and blockchain technology in general, has its core in decentralization. Financial regulators who come on board get rid of this crucial characteristic. DeFi solutions allow users to access decentralized financial services that would otherwise warrant an intermediary. For example, the traditional fiat system will require a bank to act as a middleman between two parties who would like to borrow or lend money. Decentralized finance allows for P2P lending and borrowing. Users get to transact in a trustless and transparent manner, which accounts for lower transaction fees and faster processing times. Besides, DeFi solutions allow for anonymity, a feature that many crypto enthusiasts prefer when transacting on blockchains.
DeFi Tokens on Bithumb Global
As the craze in the DeFi industry increases by the day, so does the number of DeFi tokens. Often, developers will come up with tokens to facilitate their dApps working and to act as incentives to bring investors on board. More crypto enthusiasts are now adding DeFi tokens to their portfolios, which has seen exchanges list more of these tokens.
Bithumb Global is a relatively new exchange that was launched in May 2019. Over the past year, the exchange has grown rapidly and has attracted many crypto enthusiasts, thanks to the exciting new features it has to offer. Bithumb Global has enlisted some DeFi tokens that are rapidly gaining traction on the platform. These tokens are doing quite well, which is prompting investors to turn their attention there. Tokens such as $OM have continued to register tremendous growth. The DeFi tokens listed on Bithumb Global continue to grow, with the latest ones being TRB, BAL, BAND, CRV, YFV, and SUSHI, which were listed on 1st September 2020.
In August 2020, Bithumb Global introduced BG Learning, which is an interactive learning platform. BG Learning helps to draw attention to viable blockchain projects by engaging users in Q&A events. For every project listed on the platform, users get the chance to win the project’s tokens by answering questions about the listing correctly.
The platform held its first voting event for the Maker Dao (OM) DeFi project. The event was scheduled for 17th August 2020. The event was a massive success, garnering 79381 votes against the targeted 10,000 votes. The reward distribution event was held on 18th August and Bithumb Global airdropped 10,000 OM tokens to users who had correct answers during the Q&A.
The second season of BG Learning featured the PROXI DeFi project. Like the first season, Bithumb Global had a target of 10,000 votes. However, the voting event, which was held on 24th August resulted in 443569 votes. For the second season, the prize pool was 25,000 tokens, which was distributed to users with correct answers on 25th August.
BG Learning Season 3
The platform is close to its BG Learning Season 3, which will have a prize pool of 150,000 GTH. Bithumb users get to vote in the event based on their asset holdings and transaction amounts. The voting event is scheduled for 11th September, where users will be required to answer questions related to the listing of related projects. Finally, all users who answered the questions correctly will share the 150,000 GTH tokens in proportion to their votes.
You can vote for the Gather Network during the voting event for BG Learning voting. Both are targeting 10,000 votes during the voting event. If you are a Gather fan, the voting event is from 9th to 11th of September. The voting begins at 10:00 (UTC+8) to 21:59 (UTC+8). The Gather event is for BG Learning Season 3. Find more information here.
Hedget, on the other hand, will be for the BG Learning Season 4, also targeting for 10,000 votes. Voting for Hedget will be ongoing 9th to 12th September, starting at 12:00 (UTC+8) to 16:59 (UTC+8). The price pool for Hedget 1000 HGET set for distribution on 13th September. Everyone interested in the lucrative rewards should watch out for the events to earn the lucrative rewards. For more information, visit here.
The BG Learning platform has proven to be quite an asset for DeFi projects looking to make a mark in the industry. The Bithumb Global community embraced the last two projects, which contributed significantly to their success. The platform is yet to announce the next project listing for season three of BG Learning.
The Future of Finance is Decentralized
If 2020 is anything to go by, the future of finance is undoubtedly decentralized. In just eight months, the DeFi industry has more than tripled in value, hitting the $1 billion mark in February, and surpassing the $4 billion mark later in July. Undoubtedly, DeFi solutions are at the forefront of today’s financial world, and it is evident more investors and crypto enthusiasts are looking into the sector.
We cannot deny the risks that come with unregulated financial platforms. However, DeFi platforms have proved that they can provide a variety of solutions to today’s financial problems. Therefore, as the digital currencies’ world continues evolving, we can expect DeFi to make significant leaps. The crypto community can only wait to see what else is in store.