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DeFi Protocols and DApps

Updated: Nov 8, 2023

DeFi, also known as decentralized finance, is a rapidly growing sector in the cryptocurrency industry that allows users to access financial services without traditional intermediaries like banks. It offers various functionalities, including cryptocurrency swapping, liquidity provision, borrowing, and lending.

DeFi is based on decentralized applications, or dapps, which are accessed using a digital wallet and can be used for a variety of purposes, including swapping one cryptocurrency for another, providing liquidity to liquidity pools, borrowing and lending, and more.

One of the key benefits of DeFi is that it allows for greater autonomy and control for individuals and organizations, as well as faster and more secure transactions. It is important to note, however, that different cryptocurrencies can be highly volatile and is subject to risks such as impermanent loss and the potential for scams and fraud. It is important to do your own research and be cautious when using DeFi services.

There are many protocols and decentralized applications that make up the DeFi ecosystem. We will explore some of the most popular DeFi protocols and dApps, including swaps, liquidity pools and lending and borrowing platforms. Whether you are a seasoned cryptocurrency investor or a newcomer to the space, this chapter will provide you with a comprehensive understanding of the DeFi landscape and how you can get involved.


Are one of the simplest and most popular DeFi protocols. They allow users to exchange one token for another, similar to traditional exchanges. They are also known as Decentralized exchanges (DEXs). They are often integrated with other DeFi protocols, such as liquidity pools and lending and borrowing platforms. Some popular DEXs include Uniswap, SushiSwap, and Curve.

Liquidity pools (LPs)

They are a key component of swaps. They allow users to provide liquidity in exchange for a share of the fees generated by the protocol. However, LPs also carry the risk of impermanent loss, which occurs when the price difference between the two tokens in the liquidity pool widens.

Lending and borrowing

These dApps are similar to traditional banks in that they allow users to deposit tokens and earn interest or borrow tokens and pay interest. The interest rate depends on the demand for the token. Some popular lending and borrowing dApps are Compound and Aave.

It is recommended that you begin learning about these protocols by using them on a test net and understand the associated risks. By taking one of our courses at CryptoAx07, you can also learn how to do your own research and minimize risk. Be sure to stay tuned for our upcoming posts, where we will provide in-depth coverage of each of these tools.

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