The Decentralized Currency & the Rise of DEFI & DEX! [Explained]
The rise of blockchain has led us to the world of decentralized currency that has provided users with economic freedom and privacy. The idea is to give users control over their funds, investments, and privacy without interference from third parties.
With that power, the use of cryptocurrencies has allowed people to grow their personal wealth, get cash loans, or invest with a promise of high returns.
At the same time, the decentralization of the currency has solved the problems of corruption, inefficient services, and systemic failures within the financial system. This provides the opportunity to improve traditional financial systems in a way that is more secure, more efficient, and cheaper.
If you are someone interested in discovering more about the crypto space, blockchain, DeFi, DEX, and more, this blog is for you. NewB.Farm is here to help Newbies like you to participate, gain awareness, knowledge, and earn great returns on your crypto investments.
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Before you get started with Crypto trading, we recommend you to read this article that’ll help you strengthen your basics about decentralized cryptocurrency, DeFi, DEX, etc.
Let’s deep dive into learning new things!
First Thing First! Know What Cryptocurrency is!
Well, cryptocurrency is an encrypted and decentralized digital currency that records and facilitates transactions on a distributed system with open source software between peers.
The transfer of funds is done over the internet without requiring permission from any third parties like central banking and governments.
Once transactions are completed, they are added to a public ledger (blockchain) via nodes with consensus achieved through a proof-of-work system referred to as mining.
Decentralized Finance (DEFI)
DeFi makes financial products readily available to the public through a decentralized blockchain network. Basically, it’s a system software written on the blockchain that streamlines the process for buyers, sellers, lenders, and borrowers to directly interact with the decentralized software using smart contracts.
It prevents the intervention of any third-party companies handling the transactions.
Decentralized Exchanges (DEX)
This new system of currency came with its fair share of pros and cons. While the centrally managed exchanges (CEX) held all the electronic cash in one place, attracted a higher risk of hacking attempts and malicious activities. There was a need to have a decentralized system that will keep the money secured. Hence, the Decentralized Exchanges (DEX) came into existence. They enable users to have full control over their crypto wallets and money with maximized security.
A decentralized exchange is a crypto marketplace that helps build smooth connections between buyers and sellers.
Previously, we used to order books to keep records of all open buy and sell orders. Now, the newer generation of decentralized exchanges uses liquidity pool protocols to keep track of cryptoassets and also determine asset pricing. These protocols also help execute trades between user wallets instantly and are usually referred to as — Swaps.
Due to their decentralized nature, the DEX has several advantages -
- Lower Transaction Fees
- Strong Security
- 100% Privacy Protected
- Financial Inclusiveness
About NewB Farm
NewB Farm is hosted on Binance Smart Chain (BSC). The platform uses automated market maker smart contracts to create liquidity. The user-interface and conceptualization of NewB Farm are very innovative, simple, profitable, and easily understandable that even the Newbies can easily interact with the services and take advantage of crypto benefits.
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