#WisdomOfTheCrowd
The Basics of DeFi, DApps, & Collectibles (NFTs)
I. The Wisdom of DeFi
DeFi is short for “decentralized finance,” an umbrella term for a variety of financial applications in cryptocurrency or blockchain geared toward disrupting financial intermediaries. DeFi got its wisdom from blockchain technology which bitcoin was made that allows several entities to hold a copy of a history of transactions, meaning, it isn’t controlled by a single central source. This is very important because centralized systems and human gatekeepers can limit speed and sophistication of transactions while offering users less direct control over their money. DeFi is distinct in such a way that it expands the use of blockchain from a simple value transfer to a more complex financial use cases.
The most popular types of DeFi applications include:
a)Decentralized exchanges (DEXs)
b)Stablecoins
c)Lending platforms
d)“Wrapped” bitcoins (WBTC)
e) Prediction markets
In addition to these apps, new DeFi concepts have sprung up around them:
a)Yield farming
b)Liquidity mining
c)Composability
d)Money legos
DeFi has changed the trend in cryptocurrency. It has become the precursor of advancements and has raised the standards in the blockchain industry. DeFi started the trend in swapping , liquidity pooling , NFT yielding, NFT farming and so much more. The whole cryptospace was move by this rapid changes brought by DeFi in all aspects.
Source: CoinDesk
https://www.google.com/amp/s/www.coindesk.com/what-is-defi%3Famp=1
II. DApps - An Introduction
DApps are run on a blockchain and distributed computing systems, so the stored data is not vulnerable to one single point of failure compared to the centralized storage of big tech companies such as Facebook. The data security on a blockchain is ensured by cryptographic verification methods such as the Zero Knowledge Proof (ZKP) method. ZKP is a cryptographic verification method, which enables secure and private transactions. In a method like ZKP, a prover can prove to a verifier that they know a particular bit of information without having to disclose any sensitive data. This means DApps run on an architecture that embeds the privacy of the user by default.
How to spot Safe DApps?
Besides the advantage of DApps that promotes transparency on its transactions, you need to DYOR (Do Your Own Research) on these DApps. Proper due diligence is a must. By way of reviewing the main fundamentals namely: - whitepaper, development team and functionality of the platform, we can ensure safety and security. Also, we should inspect the recent partnerships and companies linked to the said DApps for background and stability of the said project.
Source: HackerNoon
III. The Future of Crypto Fun Collectibles (NFTs)
What are NFTs?
A non-fungible token (NFT) is a type of cryptographic token on a blockchain that represents a unique asset. These can either be entirely digital assets or tokenized versions of real-world assets. As NFTs are not interchangeable with each other, they may function as proof of authenticity and ownership within the digital realm.
Fungibility means that an asset’s individual units are interchangeable and essentially indistinguishable from each other. For example, fiat currencies are fungible, because each unit is interchangeable with any other equivalent individual unit. A ten-dollar bill is interchangeable with any other genuine ten-dollar bill. This is imperative for an asset that aims to act as a medium of exchange.
How do NFTs work?
There are various frameworks for the creation and issuance of NFTs. The most prominent of these is ERC-721, a standard for the issuance and trading of non-fungible assets on the Ethereum blockchain.
A more recent, improved standard is ERC-1155. It enables a single contract to contain both fungible and non-fungible tokens, opening up a whole new range of possibilities. The standardization of the issuance of NFTs allows a higher degree of interoperability, which ultimately benefits the users. It basically means that unique assets can be transferred between different applications with relative ease.
If you are looking to store and gaze upon the beauty of your NFTs, you can do that in Trust Wallet. Just like other blockchain tokens, your NFT will exist on an address. It’s worth noting that NFTs can’t be replicated or transferred without the owner’s permission – even by the issuer of the NFT.
NFTs can be traded in open marketplaces, such as OpenSea. These markets connect buyers with sellers, and the value of each token is unique. Naturally, NFTs are prone to price changes in response to market supply and demand.
But how can such things have value? Just like with any other valuable item, the value isn’t inherent to the object itself but is rather assigned by people who deem it valuable. In essence, value is a shared belief. It doesn’t really matter if it’s fiat money, precious metals, or a vehicle – these things have value because people believe they do. This is how every valuable item becomes valuable, so why not digital collectibles?
The Future of NFTs
The future is very promising for these NFTs. NFT evolution has changed its history from collecting Cryptokitties to a growing NFT with added functionality, as seen in NFT yield farming projects like DEGO FINANCE to earn $DEGO tokens and holding voucher NFTS by Falcon Group to earn $FNT tokens. We have seen everything how NFTs provide digital signatures to exchanges and various projects and has turned digital artists into minting art NFTS which are very in demand in the market now. Lots of good stuff are happening and has continually progress the growth , the evolution, the functionality and the future of CryptoSpace!
Source: Binance Academy What Is an NFT? | Binance Academy
Video Source: Nifty Show#13 -Doing Good Stuff with NFTs
By: CryptoPraetori1