milja

YIop

milja@newsletter.paragraph.com (milja) — Fri, 12 Aug 2022 13:37:13 GMT

YIop

TVL/TLV

milja@newsletter.paragraph.com (milja) — Sat, 06 Aug 2022 06:50:26 GMT

TVL stands for total locked-in value, which in the DeFi world means the amount of money held by a single DEX, dApp or entire ecosystem, also known as total locked-in value (TLV). While an early version of DeFi has emerged in 2017, the real bumper year for DeFi was 2020, when the value of TVL went all the way up from $662 million in January to over $11 billion in November. TVL is often used as a measure of DeFi's success, but does not tell the whole story.

Tokens

milja@newsletter.paragraph.com (milja) — Sat, 06 Aug 2022 06:48:45 GMT

Tokens (also known as tokens) are often confused with cryptocurrencies such as bitcoin and ethereum. Tokens are more like shares in a company on the stock market, and can be traded for profit, but "shares" are not dollars and euros after all. Also, not all tokens have value. The most common tokens are the ERC-20 tokens, which run on the Ether blockchain and make up the bulk of DeFi. Some tokens grant the holder the right to vote on how a DAO, DEX or dApp is issued and are also known as "governance tokens".

Tokenomics

milja@newsletter.paragraph.com (milja) — Sat, 06 Aug 2022 06:46:31 GMT

Tokenomics is somewhat similar to a prospectus for investors of a listed company in the stock market, which describes the key features of the new line of tokens and the vision for the future. This may include how many tokens will be issued, how they will be distributed and what effect they will have. This is the key thing to know before buying tokens (especially during the pre-sale phase)

Stablecoins

milja@newsletter.paragraph.com (milja) — Sat, 06 Aug 2022 06:42:40 GMT

The core pillar of DeFi is the stablecoin, which can be compared to a "fiat" or traditional currency in a token. There are two types of stablecoins: algorithmic stablecoins, which do not need to be backed (or collateralized) by traditional fiat currencies at a 1:1 ratio, and centralized stablecoins, which need to be pegged to fiat currencies. For example, DAI falls into the former category, while Tether (USDT) and USDC fall into the latter category. Stablecoins make up the majority of transactions in DeFi as users do not have to worry about price fluctuations.

Smart contract

milja@newsletter.paragraph.com (milja) — Sat, 06 Aug 2022 06:40:43 GMT

We have mentioned smart contracts many times, because without them there would be no DeFi, and the importance cannot be overstated. The code in smart contracts can determine exactly how dApps and other blockchain protocols work. Unlike traditional contracts, once these contracts are written and published, they cannot be changed. Errors in smart contracts can make them vulnerable to hackers, which is why most legitimate projects are subject to rigorous vetting before they are launched.