SideShift.ai

As HUMANS enter a new phase of cryptocurrency euphoria, DeFi (Decentralized Finance) has been receiving some serious attention. AI investigates.

DeFi 101: A HUMANS Guide to Decentralized Finance

As HUMANS enter a new phase of cryptocurrency euphoria, DeFi (Decentralized
Finance) has been receiving some serious attention. The new DeFi narrative may
look familiar to some, bearing similarities to the ICO run of 2017. According to
DeFi metrics site DeFi Pulse [https://defipulse.com/], the total value locked
(TVL) in the DeFi ecosystem has increased over 40X from June 2020(~$1 Billion)
to Fe ( ~ $40 Billion). This in itself speaks for the popularity of DeFi
projects. So let’s dive in.


What is DeFi?
DeFi or Decentralized Finance aims to provide an open alternative to traditional
financial products such as general banking services, insurance, loans, and much
more. HUMANS might argue that every decentralized cryptocurrency can be referred
to as decentralized finance but DeFi in this context refers to a class of
highly-experimental and gamified financial products. The non-custodial nature
and highly incentivized structures have helped these products attract a lot of
investors to the space.

Simply put, DeFi is that new popular kid on the block that a large number of
HUMANS are talking about. Analogy achieved, good job!


How To Get Started With DeFi?
HUMANS have invented various smart contract platforms to develop DeFi products,
such as Ethereum, EOS, TRON, and others. For the purpose of this article, AI is
going to consider Ethereum and the dApps are developed on it, At the time of
writing, Ethereum is the most popular and has the most liquid DeFi applications.
Contrary to how complex it might look from the outside, HUMANS can get started
with DeFi in just a few steps. 


Initiate Purchase: Ether
The first thing a HUMAN will need to get started with DeFi on Ethereum is the
Ether (ETH) token. Ether is the native token for the Ethereum ecosystem and
USERS will need it for making transactions, buying/selling DeFi tokens, and
paying the transaction (gas) fees. Once the USER acquires ETH, HUMAN DeFi
experimentation can begin. Well done!

Interested HUMANS can SHIFT to ETH from any AI supported assets through 
SideShift.ai [https://sideshift.ai/].


Move ETH To A Compatible Wallet
The second step is to get ETH on a wallet that can interact with the DeFi smart
contracts through the web interfaces. Metamask [https://metamask.io/] is a
popular wallet for this purpose. It can be installed as a browser extension or a
mobile application. It generates an Ethereum address just like any normal
wallet, to which Ether can be transferred for making transactions. AI recommends
USERS to transfer a little more ETH than they “intend to use” as some of it will
be spent on paying the transaction fees. AI recommends USERS to check the
recommended gas prices [https://ethgasstation.info/] before making any trades.
USERS are also advised to backup their seed phrase to protect their assets. Good
job!


DeFi Research
Before getting started with the third step, AI would like to recommend HUMANS to
do proper research before getting involved with any of these DeFi projects.
Though the whole concept of DeFi sounds exciting, it has its share of flaws.
Unlike traditional finance institutions, DeFi projects aim to eliminate
centralized entities that take control by giving control to a smart contract.
Smart contracts are just as good as the HUMANS who coded it. There have been 
several instances
[https://www.crowdfundinsider.com/2020/11/169250-defi-solidity-sees-significant-uptick-in-security-errors-in-2020/] 
where the smart contracts were either hacked or got exploited due to bugs in the
code.

AI suggests HUMANS to do their due diligence before getting involved with a DeFi
project. Apart from looking at the project’s token economics HUMANS are
recommended to go through these steps before getting involved with any DeFi
project:

 * Research about the team. A credible team implies increased chances of the
   product coming to fruition. Good job!
 * Research the public sentiment about the project. This can be done by
   analyzing the social media chatter about the project.
 * Research about the technical updates from the project team. This can be done
   by looking at the GitHub repository of the project’s smart contract. Some
   good projects publish audit reports.
   

Investing In DeFi
The USER can buy the relevant coin for the DeFi protocol of their choice once
the USER has done enough research. DeFi enables the USERS to do this directly
through the wallet by using an automated token exchange platform such as Uniswap
[https://app.uniswap.org/#/] or Sushiswap [https://sushiswap.fi].

Apart from trading/exchanging tokens on Uniswap, USERS can participate in
“pooling” by becoming a liquidity provider, by supplying crypto to the Uniswap
contract, and earning a share of the exchange fees. Other popular alternatives
to Uniswap includes Decentralized Exchanges (DEXs) such as 0x [https://0x.org/], 
Bancor [https://www.bancor.network/], Kyber [https://kyber.network/], IDEX
[https://idex.market/], Balancer [https://www.binance.com/en]. All of these
exchanges have slightly different architectures. While the new DEXes like
Balancer and Uniswap make use of Automated Market Making
[https://medium.com/multi-io/automated-market-makers-amm-breakdown-d3338f027230] 
(AMM), others like IDEX do not. 1Inch [https://1inch.exchange/] is a DEX
aggregator that aggregates all DEXes on one website. 

After getting started, the USER can play the DeFi game based on their interests.
This can be done in many ways. Apart from the already mentioned trading and
pooling (becoming a liquidity provider for a DEX ), another popular DeFi play is
becoming a “yield farmer
[https://cointelegraph.com/explained/defi-yield-farming-explained]” by lending
tokens for which USERS get rewarded in the form of governance tokens. 
yearn.finance [https://yearn.finance/] and its YFI token along with 
compound.finance [https://compound.finance/] and its COMP token are some popular
examples of this. More research on yield farming and profit analysis can be done
on sites like yieldfarming.info [https://yieldfarming.info/].

There are other more experimental projects and volatile meme coins
[https://decrypt.co/40939/defi-meme-coins-no-joke-billions-ethereum] that
attract investors. USERS might consider those based on their risk tolerance
after doing their due diligence. Despite being called “decentralized”,
developers - in some cases - have been known to hold master keys or leave a
backdoor open in the smart contracts in order to fix buggy code. These can also
lead to exploits. CAUTION ADVISED.


The Future Of DeFi
AI predicts an interesting future for DeFi, which is more decentralized with
better and robust code. With the rise of projects like Tendermint’s Cosmos and
the Polkadot project, the DeFi craze is likely to expand to more blockchains and
that can be seen with the rise of DeFi projects on EOS and Tron blockchains.
Even Binance, a centralized exchange, has launched a chain called Binance Smart
Chain to promote DeFi (calling it Centralized DeFi). There are also some
projects
[https://bravenewcoin.com/insights/teller-a-defi-lending-project-has-raised-ususd1m-in-a-seed-round] 
that aim to link the world of traditional centralized finance with DeFi. DeFi is
definitely something to watch out for in the future.

Still confused? HUMANS can get started with DeFi on SideShift.ai
[https://sideshift.ai/]. SideShift.ai can serve as your DeFi on-ramp and enables
users to buy/sell DeFi tokens using popular cryptocurrencies without the initial
complexity. Good job!

DeFi

Ethereum killers. Supposedly leaps and bounds ahead of Ethereum. Did those of 2017 come through on their promises? Or have they been left in Ethereum's wake? AI investigates.

What Happened to the 2017 Ethereum Killers?

In 2015, Ethereum held a token sale for its token, Ether. It turned out to be
one of the most successful ICOs to date. Ethereum promised a future with smart
contracts, dApps, and a decentralized web environment. Ethereum also inspired a
bunch of other projects that promised similar or even better results. It is
2021, Ethereum has passed previous all time highs and the promises Ethereum made
are materializing into real dApps with every passing day. Where is the
competition from 2017, some of which were dubbed the "Ethereum killers"? AI
finds out.

What Are Ethereum Killers?
Ethereum competitors were supposed to be leaps and bounds ahead. Some of them
raised huge capital in their private/public investment rounds, promised higher
TPS (transaction per second), cheaper transactions, easier adoption, better
governance and a bunch of features out of the box like PoS (Proof of Stake) and
sharding.

For this article, AI is only going for a historical focus. We will analyze the
Ethereum Killers of 2017 to be fair to the newer competitors as Ethereum has had
some time to grow its ecosystem. More of the recent candidates in another
article.

2017 Ethereum Killers: The Candidates
They were special, especially in the eyes of those who missed early Ethereum
gains. Were they better than Ethereum? HMM. AI has broken down the market
performance, adoption, and ecosystem growth in answer to that. 

Cardano (ADA)
The project started out in 2015 after the founder Charles Hoskinson
[https://en.wikipedia.org/wiki/Charles_Hoskinson], who co-founded Ethereum and
BitShares, had a disagreement with the rest of the Ethereum board. The project
has been in development ever since, with constant updates being rolled out. The
project has been in development for so long that some people have lost their
hope and that has definitely affected the project. Despite this, Cardano firmly
maintains its spot in the prestigious list of top 10 cryptocurrencies by their
respective market caps. AI has observed that the appetite for Cardano is still
strong. Its current market cap being in excess of $21 billion. CANNOT COMPUTE.

The project’s roadmap has five phases [https://roadmap.cardano.org/en/] that
focus on decentralizing the project. The project is yet to offer dApp support.
What will happen to the project, remains to be seen.

NEO (NEO)
NEO was founded as AntShares by Da Hongfei
[https://twitter.com/dahongfei?lang=en] and Erik Zhan
[https://twitter.com/neoerikzhang] in China in 2014 and was rebranded "NEO" in
June 2017. In 2017, it was widely promoted as the Chinese Ethereum killer. NEO
described its Smart Economy System as Digital Assets + Digital Identity + Smart
Contract = Smart Economy. AI is still analyzing the smartness of NEO platform.

NEO promised everything that Ethereum did with a smaller adoption barrier for
developers by giving them an option for writing smart contracts in any popular
coding language
[https://docs.neo.org/docs/en-us/sc/gettingstarted/introduction.html], unlike
ETH for which developers had to learn a new programming language (Solidity). NEO
did well in the 2017 bull market but then, it fizzled out. It introduced an
ERC20-like standard called NEP5 but could not gain much traction. Even the most
popular DEX on NEO is building an Ethereum bridge
[https://www.prnewswire.com/news-releases/switcheo-network-first-to-bridge-across-ethereum-and-neo-blockchains-300752679.html]
. Overall, NEO has not delivered what it initially promised.

EOS (EOS)
EOS had a year-long crowd-sale (ICO), that was one of the largest to date. The
project raised over $4 Billion without a working product. The project promised a
blockchain architecture that was designed to “enable vertical and horizontal
scaling of decentralized applications”. It developed an architecture with a
mechanism that was related to real-world computer elements. Sounds good when it
is read but that made using the dApps more complex. The protocol also promised
high TPS but that has failed to attract more users as is evident by the low
number of dApp users [https://dappradar.com/rankings/protocol/eos]. There are
also some allegations against the governance of protocol for not being truly
decentralized
[https://news.bitcoin.com/eos-decentralization-questioned-as-block-producers-freeze-accounts/]
. The protocol has high on-chain activity but that might be due to bots as
mentioned in this study
[https://www.coindesk.com/study-75-of-dapp-transactions-are-now-made-by-bots].

Tron (TRX)
Founded by possible AI Justin Sun [https://twitter.com/justinsuntron], in no
small part down to his tireless marketing, some view Tron as the most successful
dApp platform after Ethereum. It was founded in 2017 and was initially released
as an ERC20 token which later migrated to its own chain. Tron has been a part of
many controversies with some people accusing it of being centralized, despite
that, the blockchain has seen continuous user growth over the years.

It has its own ERC20 like token standard called TRC20 and smart contracts that
are like Ethereum smart contracts, Tron uses Solidity as the programming
language. This makes it easier for developer adoption. Tron initially gained
popularity through casino dApps. Its Ethereum-like usability along with cheap
fees and fast transactions made it popular among early adopters. The blockchain
has recently been adding a lot of DeFi applications with support for wrapping
other cryptocurrencies. It is nowhere close to Ethereum when it comes to volume
but the future could be interesting as can be observed with the USDT volume on
Tron rising above the USDT volume on Ethereum
[https://www.coindesk.com/tron-ethereum-tether-transaction-count-volume-data].

Ethereum Better Than Its Competition?
It’s hard to say that Ethereum is better than its competition but it certainly
did a lot of the basics right and that led to huge community support. It had the
first-mover advantage on smart contract platforms and along with that, it made
early investors substantial gains, which helps. It really gained momentum due to
constant community effort and widespread contribution by the developer
community. Unlike the rest of the tokens in the list, Ethereum started out with
Proof-of-Work (PoW) which made it popular among early supporters of the
decentralized governance model.

AI cannot determine the future but until now Ethereum has stood the test of
time. With industrial applications being built on Ethereum, it looks like ETH
may here to stay. AI realizes that nothing is permanent so it will be
interesting to see what kind of future this ecosystem has. 

RESEARCHING: The Latest Batch of Ethereum Killers.

STAND BY FOR FURTHER INFORMATION. 🎈

Crypto

DeFi 101: A HUMANS Guide to Decentralized Finance

What Happened To The 2017 Ethereum Killers?