Therefore, this would allow users to exchange the time value of Ethereum assets. It is centered around enabling people to borrow and lend loans using DeFi systems and establishes money markets with algorithmically set interest rates based on supply and demand. #2 CompoundĬompound is a DeFi protocol built on Ethereum. It hit its highest price so far in July 2020 at $8.66. Since May 2019, ChainLink’s price trajectory has been on a fluctuating but upward climb. This makes tamper-proof and secure transactions practically possible via smart contracts. Launched in 2017, Chainlink, as the name suggests, solves what is called ‘the oracle problem,’ by providing a reliable connection to external data that is end-to-end secure. Executing any smart contract requires external data such as API or off-chain data may be required. But there is still a connectivity problem – smart contracts cannot access data on their own. We know the crucial role smart contracts play in DeFi systems. Let’s take a look at some of the most exciting DeFi projects to watch out for. Challenges such as interoperability, addressing market volatility, and accessing external data are being addressed, among many others. Multiple projects have come up – some that attempt to solve an existing challenge with the technology and some that seek to expand its applications. The attempts to recreate traditional financial instruments in a decentralized architecture have gathered much pace and enthusiasm. DeFi, short for Decentralized Finance, has been the subject of much excitement.
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