Southeast Asia DeFi Week 2-Day 1Event
Compound is a company that allows people to earn money on the crypto they save. The project is part of Ethereum, users can also borrow crypto from Compound by putting up collateral above a threshold defined by the project. In a traditional saving account, you put money into the bank and earn interest on that money. The problem is that regular bank customers are not able to use their deposited, interest-earning money in any other way once it’s in the bank. Like most Decentralized Finance (DeFi) protocols, Compound is a system of openly accessible smart contracts built on Ethereum. Compound focuses on allowing borrowers to take out loans and lenders to provide loans by locking their crypto assets into the protocol. The interest rates paid and received by borrowers and lenders are determined by the supply and demand of each crypto asset. Loans can be paid back and locked assets can be withdrawn at any time. Robert Leshner, a former economist, is the founder and CEO of Compound. Compound resembles other decentralized lending protocols in that it uses crypto assets as collateral to borrow more crypto assets. Each asset has its own market and the amount of supply or demand in the market determines the interest rates-how much money your cTokens will accumulate over time.new cTokens are created whenever a user deposits crypto-assets into the compound protocol. If users want to take out a loan using ETH as collateral, they automatically receive cETH in the return for their deposit ETH. Anyone can mint or create cTokens using an Ethereum wallet such as MetaMask, Coinbase wallet, or Houbi wallet plus one of the crypto assets the Compound system currently accepts. Besides earning interest in your crypto assets, which is a fairly straightforward process of depositing crypto assets on the platform and receiving cTokens, you can also borrow crypto on Compound. If the value of your collateral drops too far, you risk getting liquidated-having your collateral automatically sold to repay your loan. Compound, and DeFi more broadly wants to help people have more access and control over the money they earn and save.
Aave is a DeFi protocol that enables users to lend and borrow a diverse range of cryptocurrencies using both stable and variable interest rates. In addition to the typical features seen on protocols like Compound, Aave includes notable distinguishing features such as uncollateralized loans, “rate switching”, Flash Loan, and unique collateral types. Aave has seen significant growth in 2020, most of which can be tracked using Aave Watch – a tool to monitor key metrics like borrows and fees collected. Similarly, users can check out Aave Burn to see how many protocol fees have been used to burn LEND off the open market. Aave was originally launched as ETHLend, a lending platform that was founded in 2017 by Stani Kulechov. The ETHLend ICO held in November 2017 raised $600,000 worth of Ether in exchange for 1 billion LEND tokens. Aave offers the most diverse range of DeFi collateral any lending protocol on the market. Backed by strong liquidity Instead of guaranteeing repayment with collateral, Flash Loans simply rely on the timing of the loan’s repayment. As long as the loan is used and paid back in full within the same block it was issued, it is approved. On the other hand, if the loan is not paid back within the same block, the entire transaction fails. and the opportunity to protect against smart contract risk using Nexus Mutual, we’ve seen Aave carve out a significant market share in the DeFi lending market in 2020. Aave charges a 0.30% fee on flash loans – giving it a steady revenue stream as the demand for unique Flash Loan features. Whereas other lending platforms tend to lock users into fixed or variable interest rates, Aave’s rate-switching function allows users to switch between two different types of rates. This allows them to get the best interest rate on their loans, by choosing between “stable” and “variable” interest rates. It should be noted that these stable rates are not fixed interest rates. Rather, they are a more stable form of variable interest rate, which is more constant and less susceptible to market fluctuations. To deposit funds, select an asset, and enter the amount you wish to lend. From here, simply approve Aave’s access to the chosen asset, and sign the transaction for the deposit. Your deposited funds will then be supplied to the lending pool, and you can monitor your accrued interest in real-time in the Aave app dashboard. Unlike cTokens, however, each aToken returns a value equivalent to that of the underlying asset. For example, one aDAI token will always have the same value as a real DAI token. Rather than having aTokens appreciate in value with interest (as with cTokens), the number of aTokens in your balance will increase instead. Aave Pay allows Europe-based users to pay for everyday items in fiat currency, using their cryptocurrency balance. Users can take a loan out via Aave and send fiat currency to any bank account – all without directly cashing out their cryptocurrency holdings. LEND holders are able to vote on proposals made by the Because of its recognition of DeFi activity, you can see balances that Metamask
doesn't know about. In fact, the first time I logged into Zerion, I discovered $2,500 in USDC liquidity pooling that I had completely forgotten about.
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