Get to know the building blocks of a new economy
The promise of decentralized finance (DeFi for those up on their financial lingo) as a disruptor to financial institutions makes it must-know for anyone involved in finance. DeFi For Dummies provides an easy-to-understand option for unraveling the past, present, and future of DeFi. Understand current DeFi applications, including how to build basic applications on the leading platforms, and get a look into the future’s most promising new DeFi solutions. Staying ahead of the game is critical for finance professionals these days, and this Dummies guide makes it possible, with full coverage of how DeFi affects asset management, lending and borrowing, and investment markets. Wrap your mind around DeFi and start getting hands on, the Dummies way.
• Learn how the DeFi revolution started and where it’s going
• Get insight into opportunities for getting started and building value with DeFi
• Discover the leading assets, exchanges, and marketplaces built on DeFi principles
• Create secure DeFi applications on established platforms
This book is great for current pros or active investors in the world of finance who need to get up to speed on the world of DeFi as quickly and clearly as possible.
Author(s): Seoyoung Kim
Series: For Dummies (Business & Personal Finance)
Edition: 1
Publisher: Wiley
Year: 2022
Language: English
Commentary: Publisher's PDF
Pages: 336
City: Hoboken, NJ
Tags: Blockchain; Cryptocurrency; Finance; Ethereum; Smart Contracts; Bitcoin; Decentralized Autonomous Organizations; NFT; Decentralized Finance
Title Page
Copyright Page
Table of Contents
Introduction
About This Book
Foolish Assumptions
Icons Used in This Book
Beyond the Book
Where to Go from Here
Part 1 Getting Started with DeFi
Chapter 1 Introducing Decentralized Finance
Demystifying DeFi
From autonomous collectives to trillion-dollar DAOs
Transacting in DeFi versus CeFi
Borrowing assets
Selling assets
Dispelling harmful DeFi myths
Going Full Circle: The DeFi-CeFi Infinity Loop
Safeguarding wealth
Transferring funds
Continuing the cycle
Deciding to DeFi or Not to DeFi
Acknowledging inherent deficiencies in DeFi
Recognizing CeFi problems that migrate into DeFi
Identifying hurdles to adoption
Contemplating the Future of DeFi
The potential amazingness of seemingly unimportant applications
Can we completely replace CeFi?
Proceeding on Your DeFi Journey
Chapter 2 Discovering the DeFi Lingo
Introducing Key DeFi Terms
Moving into the Web3 era
Going the way of a DAO
Characterizing blockchains and consensus protocols
Describing cryptocurrencies and NFTs
Defining smart contracts and dApps
Getting acquainted with L1, L2, and the EVM
Grasping important metrics: Market cap, volume, and TVL
Knowing Important Distinctions
Custodial versus noncustodial
On-chain versus off-chain
Chapter 3 Dabbling in DeFi: Getting Your Hands Dirty
Setting Up Your Wallet
Unmasking MetaMask
Installing MetaMask
Setting up MetaMask
Renaming your account
Working with MetaMask on your mobile device
Installing MetaMask on your mobile device
Getting around in MetaMask on your mobile device
Funding Your Account
Getting (Real) ETH
Getting test ETH
Chapter 4 Making Your First DeFi Transactions
Decentralized Lending
Decentralized Borrowing
Executing a Trade on a Decentralized Exchange
Unwinding and Closing Out
Part 2 Diving into the Burgeoning DeFi Space
Chapter 5 Decentralized Assets
Understanding Native Tokens
Exploring Non-Native Tokens
Stablecoins
Wrapped tokens
Governance tokens
Security tokens
Meme coins
Differentiating Non-Fungible Tokens (NFTs)
Chapter 6 Decentralized Exchanges and Marketplaces
Understanding Liquidity Providers and Order Books
Distinguishing between Custodial and Noncustodial Exchanges
Exploring DEXs
Decentralized order books
Automated market makers
Understanding the constant product market maker
Growing and shrinking an existing liquidity pool
Paying up versus getting paid
Acknowledging limitations
Hybrid liquidity and aggregators
Navigating Marketplaces for Non-Fungible Goods
Chapter 7 Decentralized Lending and Borrowing
Making a Collateralized Loan
Understanding the Compound lending protocol
Revisiting DAI: A collateralized loan turned stablecoin
Using price feeds: What is the collateral worth?
Implementing a Flash Loan
A tale of two CEXs: Arbitraging without flash loans
Scenario 1
Scenario 2
A tale of two DEXs: Arbitraging with flash loans
Noting the caveats: The steep price of failure
Manipulating markets (the dark side of flash loans)
Chapter 8 Decentralized Metaverses
Introducing Decentralized Virtual Economies
Paving the way for real-world possibilities
Discovering decentralized metaverses
Experiencing Decentraland
Exploring the Metaverse
Part 3 Developing Your Own DApp: A Step-by-Step Guide
Chapter 9 DeFi Building Blocks
Introducing Public Blockchains
Grasping the importance of a native token
Understanding key pairs and digital signatures
Touching on other types of distributed ledgers
Explaining Consensus Mechanisms
Proof of Work (PoW)
Proof of Stake (PoS)
Proof of XYZ
Following a Day (or a Second) in the Life of a Transaction
Determining transaction fees
Understanding transaction times
Tracing the journey of a transaction
Streamlining the Development Process
Leveraging smart-contract libraries
Oracles: A Blockchain’s Divine Access to the Outside World
Chapter 10 Smart-Contract Platforms
Diving into Layer 1: Comparing Base Protocols
Bitcoin
Ethereum
Ethereum Classic
Binance Smart Chain
Other EVM-Compatible Networks
TRON
Flow
Cardano
Solana
Floating Up to Layer 2: Off-Chain Scaling Solutions
State channels
Plasma chains and sidechains
Rollups
Fraud proofs versus validity proofs
Crossing Cross-Chain Bridges
Chapter 11 Launching a Smart Contract on Ethereum
Understanding Smart Contracts
The birth of a smart contract
Contract accounts versus “regular” (externally owned) accounts
Smart-contract languages
Anatomy of a smart contract
Variables
Functions
Events
Multiple inheritance: Can you have three or more parents?
Launching Your Smart Contract
Using the Remix IDE
Entering your code
Code, uninterrupted
The play-by-play guide
Compiling your code
Pre-launch preparations
Deploying your code
Accessing Your Smart Contract
Following your smart contract on a block explorer
Interacting with your smart contract
Sending funds to your contract account
Withdrawing funds from your contract account
Allowing others to interact with your smart contract
Chapter 12 Launching a Smart Contract on the Binance Smart Chain
Testing the Waters: How to Navigate the BSC Testnet
Configuring MetaMask
Launching your smart contract
Accessing your smart contract
Feeling Ready for Mainnet?
Deploying onto Other EVM-Compatible Platforms
Avalanche
Polygon
Cronos
Fantom
Arbitrum
Huobi ECO (HECO)
Celo
Chapter 13 Launching Your First DeFi Product
Proving Your Proof of Concept
Identifying the market pain
Assessing the competition
Solidifying the value proposition
Preparing Your Development Stack
Setting up necessary accounts
Setting up necessary IDEs
Implementing the Back End of Your DApp
Entering your code
Code, uninterrupted
The play-by-play guide
Deploying your Crowdfund contract
Following your Crowdfund contract
Funding Crowdfund
Verifying your Crowdfund contract
Creating the Front-End User Interface
Integrating the friendlier front end with the (less friendly) back end
Nurturing your dApp
Part 4 The Part of Tens
Chapter 14 Top Ten DeFi Applications
Instadapp (INST)
Compound (COMP)
PancakeSwap (CAKE)
JustLend (JST)
Convex Finance (CVX)
Curve (CRV)
Uniswap (UNI)
Aave (AAVE)
Lido (LDO)
Maker (MKR)
Chapter 15 Top Ten Smart-Contract Platforms
Optimism (OP)
Arbitrum (N/A)
Fantom (FTM)
Cronos (CRO)
Polygon (MATIC)
Solana (SOL)
Avalanche (AVAX)
TRON (TRON)
Binance Smart Chain (BNB)
Ethereum (ETH)
Index
EULA
