DeFi - Business of Decentralized Finance (DeFi)

Explore how decentralized finance dis-intermediates traditional banking by removing intermediaries, KYC-driven friction, and risk assessment, and how distributed ledgers enable liquidity pooling through algorithmic incentives and collateral.

Explore the characteristics of DeFi platforms, trustless, permissionless, and automated, built on blockchain networks with non-custodial smart contracts that mitigate custodial risks, and compare DeFi with CeFi.

Understand the differences between CeFi and DeFi, including custodial vs non-custodial control, KYC, fiat-crypto conversions, and automated market-making, illustrated by Coinbase and Uniswap.

Explore the major DeFi segments reshaping finance, including lending, exchanges, derivatives, payments, and asset management, measured by total value locked and powered by trusted cross-chain, non-custodial platforms.

MakerDAO case study outlines a lending protocol issuing DAI, a USD-pegged stablecoin backed by collateral via Maker Vaults, with a DAI-based stability fee and governance-approved collateral in multi-collateral DAI.

Explore Aave, a major defi lending platform with over 13 markets across Ethereum, Avalanche, Polygon, and Arbitrum, offering tokenized real-world assets and over-collateralized loans with a 0.75 DAI loan-to-value cap.

Analyze Curve Finance, a decentralized exchange for stablecoins on Ethereum and other networks, leveraging liquidity pools and the stable swap invariant to enable low-fee, low-slippage trades.

Synthetix enables price exposure to crypto, fiat, and commodities through synth tokens like sUSD, sLink, and sBTC with zero slippage, without owning assets, backed by SNX in pooled collateral model.

Explore how DeFi platforms use protocols and smart contracts to host markets like lending, asset management, and crypto exchanges, powered by liquidity pools, tokens, and governed by a DAO.

Explore how liquidity pools power DeFi markets by replacing traditional market makers with automated market makers that use algorithms to provide continuous buy and sell liquidity.

DeFi platforms incentivize asset holders to provide liquidity to liquidity pools for automated market makers, offering trading fees and governance tokens, fueling yield farming strategies.

Explore how liquidity mining works on the Compound protocol, where cTokens, including cERC20 and CEther, represent assets, accrue interest via exchange rates, and can be used for collateral or loans.

Explore liquidity mining on PancakeSwap, a leading Binance Smart Chain dex, where cake-bnb pools issue LP tokens and providers earn a share of the 0.25% trading fee.

Explore basic money supply concepts and how currency in circulation shapes purchasing power, inflation, and deflation, laying the groundwork for token economics in DeFi platforms.

Understand how revenue equals volume times margin in platform businesses, using GMV examples from ecommerce and exchanges, and choose strategies to boost volume or margin based on industry structure.

Explore collateral as a guarantee in DeFi, with liquidation rights, and contrast simple versus compound yields, including how compounding affects APR and APY.

Explore how DeFi networks create value for investors and builders through tokenomics, governance, and automated market making, with token ownership and pricing tied to platform growth.

Explore Burniske and Tatar's framework for valuing DeFi tokens using the equation of exchange, linking crypto asset market cap, velocity, price, and transactions to demand and token supply decisions.

Explore what drives DeFi platform value, including demand, competition, and access across networks. Examine token utility, supply, liquidity, and sentiment, plus gas costs and cross-chain use shaping value.

Maker creates the USD soft-pegged DAI via collateralized debt positions, is decentralized, and governed by MakerDAO with MKR as the governance token.

Matic tokens, an ERC-20 on Ethereum, power fees and validators staking in Polygon's POS, a sidechain scaling solution offering up to 65,000 tps and 19,000 dApps.

Explain how tokens function as blockchain assets that can represent value, from fungible ERC-20 tokens to non-fungible ERC-721 tokens, with unique IDs and asset metadata.

Explore max supply, total supply, and circulating supply, and how minting and burning affect dilution, with analogies to fully diluted stock and free float shares.

Calculate token market cap by multiplying circulating supply by price, then determine fully diluted market cap using max supply or total supply if undefined, alongside free float capitalization.

Explain token minting, supply and burning schedules, including per-block and daily minting, pre minting, and burning mechanics, illustrated by Cake tokenomics.

Explain how increasing token supply creates inflationary pressure and decreasing supply creates deflationary pressure in DeFi tokenomics, and how minting versus burning rates drive inflationary or deflationary economics.

Explore tokenomics case studies: Sushi token on Ethereum as Sushiswap’s ERC 20 native asset, TORN governance via proposals and votes, OGN for staking, governance, advertising, Origin dollar stablecoins.

Explain why DeFi projects need cash flows to incentivize liquidity providers, cover costs, and reward the DAO, using examples like treasury funding and buybacks to sustain the network.

Explore cash-flow sources for DeFi platforms, including core service transaction fees (0.3% on Uniswap/Quickswap, 0.25% on PancakeSwap), secondary services, and marketplaces with platform fees like NFT markets.

Explore two cash flow models for platform businesses in DeFi: high-volume low-margin and low-volume high-margin, with examples like decentralized exchanges and NFT platforms.

Explore Convex Finance, built on Curve, which lets Curve liquidity providers and CRV stakers earn returns via boosted rewards and CVX, with a 17% performance fee funding stakers and enablers.

Explore how the Maker protocol generates cash flow from stability fees, trading income, and liquidations to support Dai and its peg, via vaults, the peg module, and DSR.

Understand DeFi governance with governance tokens, decentralized voting, and proposals that change protocols; learn how thresholds and token locking, as in Curve Finance, influence voting power.

Discover how governance tokens such as uni uniswap, AAVE, and MKR empower token holders to raise and vote on proposals, influence DeFi protocols, and be traded openly and priced independently.

Explore decentralized autonomous organizations, or daos, as internet native governance where members collectively own and manage assets via blockchain, smart contracts, and automated, auditable voting.

Explore the three governance models in DeFi: centralized, partially decentralized, and decentralized via a token-holder dao. Learn how proposals, voting, veto powers, smart contracts, and blockchain consensus automate governance.

Assess how voting mechanisms may not ensure DeFi decentralization, as uneven voting rights risk a cartel controlling governance; explore building a clear path to true decentralization.

Explore Uniswap governance by delegating UNI to vote, raising proposals with at least 10 million delegated, and passing them through temperature check, consensus check, and governance proposal.

Explore how Curve DAO uses time-locked voting with veCRV tokens, where CRV holders lock tokens to gain voting power, and longer locks increase power while weights decay toward expiry.

Explore growth challenges faced by DeFi platforms, focusing on high gas fees on Ethereum and how rising gas prices impact micro-transactions and drive migrations to Polygon and Solana.

DeFi platforms face throughput limits, with Visa up to 1700 tps vs Bitcoin and Ethereum at 6–20 tps; lecture explains layer 1 and layer 2 scaling, including rollups and sidechains.

Regulatory challenges threaten DeFi's growth, as global regulators push for safeguards, investor protection, and compliance, with BIS advocating proper regulation and authorities' interference in governance.