So what the H*** is DeFi?
Simply put, it is a portmanteau made from the words Decentralised and Finance.
Hhhmmm…. I am listening….
So you may have heard about BitCoin (yes, the online/virtual world coin which can be used to buy you a pizza and much more). Now, the world has evolved into a lot more, we do not just have Bitcoin, we have A LOT more crypto coins (now why are they called crypto, is a different topic, let me know if you want me to write up on that too).
A quick jump on CoinGecko (a quick shout out to my dear friends at CoinGecko; lovely bunch of people) and you will find out that the geeky coders are all over the moon with crypto coins.
A bunch of such coders and a lot many investors are holding on to a lot of such coins. The very first objective for many of them is to hold it till the value appreciates to some multiple of their costing (eg 2x, 5x etc), sell the coins, book some profit and then re-run the cycle. Then, there are a bunch of coders, investors who are holding such coins as a support to the industry, platform, and the crypto world.
In both situations, they have a value that is locked (let’s read notional over here) in the Blockchain world. What do they do with it? They put it out in as DeFi, which is to say, they lend out this locked value, for earning interest.
Ok, now I got nothing to do with the blockchain world, nothing to do with bitcoin, should I really care about it?
I will have to lie to tell you that it does not matter to you at all, or else, I will have to be oblivious to what changes are happening out there.
It does matter to you on various counts. However, the most important aspect of DeFi that is impacting a lot of us is Money, Money, Money. Even if you do not care anything about the technological developments/disruption that is being created by the crypto world, the chart below should grab your attention:
Yes, Yes, I know, I know, you may be thinking that one is Fiat and real currency and this is all crypto, backed by nothing, etc. Well, that is another lengthy chat that we should have through another article. Let me know in the comments if that topic does bother you and I will write it up.
OK, let’s get some record straight, this is a blog for developers I still do not see why should I care about DeFi and what can I do about it.
One word – adoption. If you are a developer who is looking out to build something new, this is one of the areas that you should look into. The entire DeFi space is like one year old, compared to the more than 5 decades old mature financial system that is pretty much all around us. The adoption of this method of lending, borrowing value through the internet is still picking up and if you have some innovative solution you should be building it right now!!!
Fine, how can I be building anything in the DeFi Space?
While there are a lot of blockchains out there on which you can build a lot of stuff, in my opinion, Ethereum is topping the popularity charts. One of the coolest features of Ethereum is the execution of Smart Contracts.
This forms my introduction on “How to Write Smart Contracts“. In the next part, I will introduce you to solidity and how we will be writing our first contract.
I hope you have liked this drill. If you have any questions, please drop in your comments and I am more than happy to address them.