16  Blockchain

• Stablecoins: These are types of cryptocurrencies that are tied to an

asset or fiat currency (USD or Euro or GBP) outside of cryptocurrency

to stabilise the process.

• Lending platforms: These platforms are automated through smart

contracts to replace the intermediaries such as banks to provide loans

etc. to the users directly through the platform.

• Predictive markets: This is a DeFi platform that provides markets

for betting on the outcome of future events like elections or football

matches etc., without any intermediaries.

• Yield farming: Using these platforms, users can scan through various

DeFi tokens to search for opportunities for larger returns.

• Composability: As mentioned before, dApps are open sources and

as such can be used to compose new apps with the code as building

blocks.

• Money Legos: DeFi apps are like Lego blocks (children’s games from

Lego) where you can build a new toy by combining various Lego

blocks. To put this in perspective, users can combine various DeFi

apps to create new financial products.

Examples of DeFi projects

There are thousands of DeFi projects mostly on the Ethereum blockchain.

We will go through some of the famous ones in this section.

• Maker: Maker is an Ethereum-based decentralised autonomous organ-

isation (DAO) that allows anyone to lend or borrow cryptocurrencies.

It is a stablecoin project whereby each stablecoin is pegged to US dol-

lars, and it is backed by collateral in the form of crypto. Therefore, in

essence, Maker offers some security in the form of collateral and has a

lower risk than other cryptocurrencies like Bitcoin or Ethereum.

Website: https://makerdao.com/en/

• Compound: Compound is a blockchain-based borrowing and lending

dApp. You can lend your cryptocurrencies out and earn interest on them

or you can borrow real money (fiat currency) through the security of

crypto on the platform. The compound platform provides various bor-

rowers and lenders and automatically matches them through a contract.

The contract adjusts the interest rates based on demand and supply.

Website: https://compound.finance

• Uniswap: Uniswap is a cryptocurrency exchange like Coinbase. It is

entirely based on smart contracts, letting customers trade popular

tokens directly from its wallet. It provides an innovative mechanism

known as an automated market, enabling one to automatically settle

trade near the market price.

Website: https://uniswap.org