20  Blockchain

Synthetic assets

Synthetic assets are crypto assets that provide exposure to other assets like

gold, fiat currencies and cryptocurrencies. They are collateralised by tokens

that are locked into Ethereum-based smart contracts. It uses an Ethereum-

based smart contract to offer built-in agreements and incentive mecha-

nisms. The synthetic protocol implements a 750% collateralisation ratio to

help the network to absorb process shocks.

Tokenisation

Tokenisation is one of the core features of DeFi and also a native func-

tionality of the Ethereum blockchain. A token is a digital asset that can

be created, issued and managed on a blockchain. Tokens are secure and

instantly transferrable. They are also can be programmed inside a smart

contract to transfer value for multiple use cases. One of the examples of

use cases whereby tokens can be used is fractionalised property ownership,

payments, and digital alternative to access, trade and store value.

Trading

DeFi offers an extensive list of benefits for trading from derivatives trad-

ing, margin trading and token swaps. Crypto traders benefit from decen-

tralised exchanges whereby they benefit from lower exchange fees, faster

transaction settlements and full custody of their assets without a need for

intermediaries.

Digital identity

DeFi can offer a portable self-sovereign identity with security and privacy

as core features. The traditional approach to a person’s identity and credit-

worthiness is defined by one’s income or accumulated assets. With a DeFi-

paired digital identity, it is possible to take into account other factors like

financial activities or professional reputation. Blockchain-based digital

identity systems are already getting a lot of traction. Combining these sys-

tems with DeFi protocols will provide a global ecosystem for all privileged

as well as unprivileged people of society.

Crowdfunding

Ethereum is one of the best platforms for crowdfunding dApps. It provides

a global platform for funders and fundraisers to raise money for a proj-

ect with security, transparency and complete automation. Fundraisers can

prove how much money has been raised as well as anyone can trace how the

funds are being spent later down the line after the successful fundraising.

Fundraisers can also set up automatic refunds if there is a specific deadline

and the minimum amount is not met.