
Lesson #3: Synthetics
It’s nice to have all these financial systems, but wouldn’t it be better if we could use them without going through all these weird imaginary computer currencies?What are synthetics?Synthetics are tokens the point of which is to retain the same value as another asset (dollars, euros, gold, stocks, bitcoin, etc...). The idea was originally born because of US regulations, which wouldn’t allow crypto exchanges to take in dollars or permit trading of crypto assets against the dollar without a fin...

Lesson #4: Yield Optimizers
In my previous lessons I mentioned the concept of “yield farming”, but what is it exactly?The practice of yield farming consists of providing liquidity (in other words depositing crypto) to different types of protocols, so as to generate passive income. The yield comes from protocol usage fees (such as interest from loans or fees on swaps) and the from the distribution of the protocol’s native token.Picking the right tokensTo do so, it is very important you pick the right tokens to farm, as i...

Lesson #2: Lending
The second step to decentralizing finance is, of course, on-chain lending. There are now lending systems on the blockchain, which are often built on smart contracts. However, these lending systems can’t send repo men to your house if you don’t pay up, or know your credit score and revenue, and cannot therefore evaluate your reliability as a borrower like a traditional bank would.So how does on-chain lending work?On-chain borrowing usually requires you to provide a collateral equivalent to bet...
DeFi, explained clearly without bells and whistles

Lesson #3: Synthetics
It’s nice to have all these financial systems, but wouldn’t it be better if we could use them without going through all these weird imaginary computer currencies?What are synthetics?Synthetics are tokens the point of which is to retain the same value as another asset (dollars, euros, gold, stocks, bitcoin, etc...). The idea was originally born because of US regulations, which wouldn’t allow crypto exchanges to take in dollars or permit trading of crypto assets against the dollar without a fin...

Lesson #4: Yield Optimizers
In my previous lessons I mentioned the concept of “yield farming”, but what is it exactly?The practice of yield farming consists of providing liquidity (in other words depositing crypto) to different types of protocols, so as to generate passive income. The yield comes from protocol usage fees (such as interest from loans or fees on swaps) and the from the distribution of the protocol’s native token.Picking the right tokensTo do so, it is very important you pick the right tokens to farm, as i...

Lesson #2: Lending
The second step to decentralizing finance is, of course, on-chain lending. There are now lending systems on the blockchain, which are often built on smart contracts. However, these lending systems can’t send repo men to your house if you don’t pay up, or know your credit score and revenue, and cannot therefore evaluate your reliability as a borrower like a traditional bank would.So how does on-chain lending work?On-chain borrowing usually requires you to provide a collateral equivalent to bet...
DeFi, explained clearly without bells and whistles

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All these AMMs have different prices and fees! How do I know the best place to swap my tokens?
Due to slippage and differences in swap algorithms, arbitrage, fees and available pairs, different AMMs usually have different prices and costs associated to swap between two specific tokens, especially since one swap can have multiple steps and each step could have different costs on different AMMs. For a while, this made executing an efficient swap a time-consuming matter.
Fortunately, DEX aggregators were created in order to quash this issue. “But what are they and how do they work?” you ask.
Well, DEX aggregators are protocols that will find the optimal route for you to swap your desired tokens and bundle all the necessary steps into one transaction, optimized for transaction fees or “gas”. Sometimes this will include going through specific routes on one AMM or even executing multiple swaps on multiple AMMs within the same transaction.
For you, the end user, this is completely transparent. The interface works just like an AMM, select token A, select token B, enter the amount of token A to swap and the interface tells you the amount of token B you will receive and the expected amount of slippage, with the route specified underneath. The difference being, the route can include different protocols rather than just one.
This means that by using DEX aggregators instead of normal AMMs, you will save time and money, and this will be very beneficial to your trading. Some even allow you to place limit orders, in order to more effectively manage your entries and take-profits.
1inch: Multi-chain DEX aggregator with limit orders and gas tokens
Matcha: Multi-chain DEX aggregator built on the 0x protocol
Cowswap: Ethereum and Gnosis Chain DEX aggregator with MEV protection, fees are paid on the token and do not require a transaction to swap
Version française disponible sur Muchcoin
All these AMMs have different prices and fees! How do I know the best place to swap my tokens?
Due to slippage and differences in swap algorithms, arbitrage, fees and available pairs, different AMMs usually have different prices and costs associated to swap between two specific tokens, especially since one swap can have multiple steps and each step could have different costs on different AMMs. For a while, this made executing an efficient swap a time-consuming matter.
Fortunately, DEX aggregators were created in order to quash this issue. “But what are they and how do they work?” you ask.
Well, DEX aggregators are protocols that will find the optimal route for you to swap your desired tokens and bundle all the necessary steps into one transaction, optimized for transaction fees or “gas”. Sometimes this will include going through specific routes on one AMM or even executing multiple swaps on multiple AMMs within the same transaction.
For you, the end user, this is completely transparent. The interface works just like an AMM, select token A, select token B, enter the amount of token A to swap and the interface tells you the amount of token B you will receive and the expected amount of slippage, with the route specified underneath. The difference being, the route can include different protocols rather than just one.
This means that by using DEX aggregators instead of normal AMMs, you will save time and money, and this will be very beneficial to your trading. Some even allow you to place limit orders, in order to more effectively manage your entries and take-profits.
1inch: Multi-chain DEX aggregator with limit orders and gas tokens
Matcha: Multi-chain DEX aggregator built on the 0x protocol
Cowswap: Ethereum and Gnosis Chain DEX aggregator with MEV protection, fees are paid on the token and do not require a transaction to swap
Version française disponible sur Muchcoin
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