Decentralized Finance (DeFi) represents one of the most significant achievements in the world of cryptocurrencies and blockchain. In this article, we will look at how DeFi has evolved since the creation of Ethereum and examine key events that have shaped its current state.
The Evolution of DeFi Since the Birth of Ethereum
The most successful decentralized applications (DApps) on the Ethereum platform are DeFi. DeFi stands for Decentralized Finance, which is the opposite of centralized finance. Over time, they have evolved into Ethereum-backed lending, decentralized exchanges, liquidity staking, re-staking, and more.
DeFi Timeline
The history of DeFi includes many important milestones: * 2009: Bitcoin. Blockchains focused on functions as money, such as payment or transaction-related systems. * 2014: Bitshares. Cryptocurrency using the DPoS consensus algorithm, founded by Dan Larimer. * 2015: Ethereum. Decentralized platform for building smart contract-based applications. * 2014: MakerDAO, founded by Rune Christensen. Project to issue Dai (DAI), a dollar-pegged stablecoin backed by Ethereum. Prototype in 2015, Single Collateral DAI (SCD) in 2017, Multi-Collateral DAI (MCD) in 2019. * 2017: EtherDelta. The first decentralized exchange (DEX) based on Ethereum. Now - ForkDelta. * 2017: ICO Boom. Projects like AAVE, SYNTHETIX, REN, Kyber Network, Bancor, and others are born. * 2018: Compound. DeFi platform offering loans secured by cryptocurrency. * 2018: Uniswap. Ethereum-based protocol to facilitate automated exchange transactions between ETH and ERC-20 tokens. * 2020: SushiSwap. DeFi protocol that successfully absorbed Uniswap liquidity shortly after launch. * 2020: Lido. Liquidity staking protocol. * 2022: NEOPIN. Designed as Permissioned DeFi prior to official launch.
What is Decentralized Finance (DeFi)?
Decentralized financial services operate using cryptocurrency based on smart contracts in a blockchain network. * Financial services (insurance, loans, investments, etc.) provided by blockchain technology without the intervention of centralized institutions such as governments and banks. * Transaction history and personal information are stored and protected in a distributed database (DLT) on the blockchain. * All you need is a smartphone/internet connection. Convenience and ubiquity make it the next generation of financial services.
Since its inception, decentralized finance has undergone significant development. From simple payment systems to complex financial services, DeFi has greatly changed the perception of finance in the world of cryptocurrencies. In future articles, we will delve into topics like staking and swaps to further explore the capabilities of DeFi.
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