{"id":7041,"date":"2021-07-27T19:59:37","date_gmt":"2021-07-27T19:59:37","guid":{"rendered":"https:\/\/howtobuycryptocurrency.uk\/?p=7041"},"modified":"2021-11-02T18:54:31","modified_gmt":"2021-11-02T18:54:31","slug":"what-is-defi","status":"publish","type":"post","link":"https:\/\/couplesguideto.com\/buy-crypto\/guides\/what-is-defi\/","title":{"rendered":"What Is DeFi? A Beginners Guide To Decentralized Finance"},"content":{"rendered":"[vc_row type=&#8221;full_width_background&#8221; full_screen_row_position=&#8221;middle&#8221; column_margin=&#8221;default&#8221; column_direction=&#8221;default&#8221; column_direction_tablet=&#8221;default&#8221; column_direction_phone=&#8221;default&#8221; bg_color=&#8221;#18191c&#8221; scene_position=&#8221;center&#8221; top_padding=&#8221;10%&#8221; bottom_padding=&#8221;10%&#8221; text_color=&#8221;light&#8221; text_align=&#8221;left&#8221; row_border_radius=&#8221;none&#8221; row_border_radius_applies=&#8221;bg&#8221; class=&#8221;review-header-row&#8221; overlay_strength=&#8221;0.3&#8243; gradient_direction=&#8221;left_to_right&#8221; shape_divider_position=&#8221;bottom&#8221; bg_image_animation=&#8221;none&#8221; shape_type=&#8221;&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_tablet=&#8221;inherit&#8221; column_padding_phone=&#8221;inherit&#8221; column_padding_position=&#8221;all&#8221; column_element_spacing=&#8221;default&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; column_link_target=&#8221;_self&#8221; gradient_direction=&#8221;left_to_right&#8221; overlay_strength=&#8221;0.3&#8243; width=&#8221;1\/1&#8243; tablet_width_inherit=&#8221;default&#8221; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; bg_image_animation=&#8221;none&#8221; border_type=&#8221;simple&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_row_inner equal_height=&#8221;yes&#8221; content_placement=&#8221;middle&#8221; column_margin=&#8221;default&#8221; column_direction=&#8221;default&#8221; column_direction_tablet=&#8221;default&#8221; column_direction_phone=&#8221;default&#8221; text_align=&#8221;left&#8221;][vc_column_inner column_padding=&#8221;no-extra-padding&#8221; column_padding_tablet=&#8221;inherit&#8221; column_padding_phone=&#8221;inherit&#8221; column_padding_position=&#8221;all&#8221; column_element_spacing=&#8221;default&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; column_link_target=&#8221;_self&#8221; gradient_direction=&#8221;left_to_right&#8221; overlay_strength=&#8221;0.3&#8243; width=&#8221;1\/2&#8243; tablet_width_inherit=&#8221;default&#8221; bg_image_animation=&#8221;none&#8221; border_type=&#8221;simple&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][split_line_heading animation_type=&#8221;default&#8221;]\n<h2>DeFi 101 Guide<\/h2>\n[\/split_line_heading][vc_column_text css_animation=&#8221;bottom-to-top&#8221; css=&#8221;.vc_custom_1627415021270{margin-top: 15px !important;}&#8221; max_width=&#8221;500&#8243;]<span style=\"font-weight: 400;\">Decentralized Finance is an emerging field, and it can be difficult to understand what DeFi actually is. It has been heralded as a next generation financial system that will revolutionize the way we think about money. In this blog post, we will explore DeFi in depth to help you better understand how it works and why it&#8217;s so exciting!<\/span>[\/vc_column_text][\/vc_column_inner][vc_column_inner column_padding=&#8221;no-extra-padding&#8221; column_padding_tablet=&#8221;inherit&#8221; column_padding_phone=&#8221;inherit&#8221; column_padding_position=&#8221;all&#8221; column_element_spacing=&#8221;default&#8221; centered_text=&#8221;true&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; column_link_target=&#8221;_self&#8221; gradient_direction=&#8221;left_to_right&#8221; overlay_strength=&#8221;0.3&#8243; width=&#8221;1\/2&#8243; tablet_width_inherit=&#8221;default&#8221; bg_image_animation=&#8221;none&#8221; border_type=&#8221;simple&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][nectar_btn size=&#8221;large&#8221; open_new_tab=&#8221;true&#8221; button_style=&#8221;regular&#8221; button_color_2=&#8221;Accent-Color&#8221; icon_family=&#8221;none&#8221; text=&#8221;Join Coinbase&#8221; url=&#8221;https:\/\/www.coinbase.com\/join\/hickma_dg&#8221;][nectar_btn size=&#8221;large&#8221; open_new_tab=&#8221;true&#8221; button_style=&#8221;regular&#8221; button_color_2=&#8221;Accent-Color&#8221; icon_family=&#8221;none&#8221; text=&#8221;Join Binance&#8221; url=&#8221;https:\/\/accounts.binance.com\/en\/register?ref=SQU59UI8&#8243;][\/vc_column_inner][\/vc_row_inner][vc_row_inner equal_height=&#8221;yes&#8221; content_placement=&#8221;middle&#8221; disable_element=&#8221;yes&#8221; column_margin=&#8221;default&#8221; column_direction=&#8221;default&#8221; column_direction_tablet=&#8221;default&#8221; column_direction_phone=&#8221;default&#8221; text_align=&#8221;left&#8221;][vc_column_inner column_padding=&#8221;no-extra-padding&#8221; column_padding_tablet=&#8221;inherit&#8221; column_padding_phone=&#8221;inherit&#8221; column_padding_position=&#8221;all&#8221; column_element_spacing=&#8221;default&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; column_link_target=&#8221;_self&#8221; gradient_direction=&#8221;left_to_right&#8221; overlay_strength=&#8221;0.3&#8243; width=&#8221;1\/2&#8243; tablet_width_inherit=&#8221;default&#8221; bg_image_animation=&#8221;none&#8221; border_type=&#8221;simple&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][split_line_heading animation_type=&#8221;default&#8221;]\n<h3>Pros of Coinbase<\/h3>\n[\/split_line_heading]<div class=\"nectar-fancy-ul\" data-list-icon=\"fa fa-check\" data-animation=\"false\" data-animation-delay=\"0\" data-color=\"accent-color\" data-spacing=\"default\" data-alignment=\"left\"> \n<ul class=\"mntl-sc-block-comparisonlist__list\">\n<li>A large variety of altcoins to invest in<\/li>\n<li>Simplistic User Interface fit for newbies and experts<\/li>\n<li>A high level of liquidity<\/li>\n<\/ul>\n <\/div>[\/vc_column_inner][vc_column_inner column_padding=&#8221;no-extra-padding&#8221; column_padding_tablet=&#8221;inherit&#8221; column_padding_phone=&#8221;inherit&#8221; column_padding_position=&#8221;all&#8221; column_element_spacing=&#8221;default&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; column_link_target=&#8221;_self&#8221; gradient_direction=&#8221;left_to_right&#8221; overlay_strength=&#8221;0.3&#8243; width=&#8221;1\/2&#8243; tablet_width_inherit=&#8221;default&#8221; bg_image_animation=&#8221;none&#8221; border_type=&#8221;simple&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][split_line_heading animation_type=&#8221;default&#8221;]\n<h3>Cons of Coinbase<\/h3>\n[\/split_line_heading]<div class=\"nectar-fancy-ul\" data-list-icon=\"fa fa-times\" data-animation=\"false\" data-animation-delay=\"0\" data-color=\"extra-color-1\" data-spacing=\"default\" data-alignment=\"left\"> \n<ul class=\"mntl-sc-block-comparisonlist__list\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">High fees when not using Coinbase Pro<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">User doesn\u2019t control wallet key<\/span><\/li>\n<\/ul>\n <\/div>[\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row type=&#8221;in_container&#8221; full_screen_row_position=&#8221;middle&#8221; column_margin=&#8221;default&#8221; column_direction=&#8221;default&#8221; column_direction_tablet=&#8221;default&#8221; column_direction_phone=&#8221;default&#8221; scene_position=&#8221;center&#8221; top_padding=&#8221;5%&#8221; bottom_padding=&#8221;5%&#8221; text_color=&#8221;dark&#8221; text_align=&#8221;left&#8221; row_border_radius=&#8221;none&#8221; row_border_radius_applies=&#8221;bg&#8221; class=&#8221;review-main-content-section&#8221; overlay_strength=&#8221;0.3&#8243; gradient_direction=&#8221;left_to_right&#8221; shape_divider_position=&#8221;bottom&#8221; bg_image_animation=&#8221;none&#8221; shape_type=&#8221;&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_tablet=&#8221;inherit&#8221; column_padding_phone=&#8221;inherit&#8221; column_padding_position=&#8221;all&#8221; column_element_spacing=&#8221;default&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; column_link_target=&#8221;_self&#8221; el_class=&#8221;review-column-left&#8221; gradient_direction=&#8221;left_to_right&#8221; overlay_strength=&#8221;0.3&#8243; width=&#8221;2\/3&#8243; tablet_width_inherit=&#8221;default&#8221; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; bg_image_animation=&#8221;none&#8221; border_type=&#8221;simple&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][vc_column_text]<em>Affiliate Disclosure: We earn a small commission from referrals to external sites for this article if you sign up using one of our links.\u00a0<\/em>[\/vc_column_text][vc_column_text css=&#8221;.vc_custom_1627456193583{padding-top: 1% !important;}&#8221;]<em>Financial Disclosure: We are not financial advisors, all capital you invest is at your own risk. DeFi is viewed as a high risk investment, do more research on DeFi from other sources.<\/em>[\/vc_column_text][vc_column_text css=&#8221;.vc_custom_1627472218233{padding-top: 2% !important;}&#8221;]\n<h2><b>What is Decentralised Finance (DeFi)?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">To start out with, let&#8217;s clarify what &#8220;decentralized finance&#8221; means. Decentralized finance refers to the removal of intermediaries such as banks or governments from financial interactions between people when conducting transactions for goods or services.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example when you pay for something online your transaction will use Visa or Mastercard to send the cash to the seller. Using cryptocurrencies such as Bitcoin or Ethereum you can send your money directly to the seller, cutting out the credit company or bank.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Many traditional banking and financial services will be available with DeFi which can handle simple and complex transactions, just like any normal financial institution, however without the man in the middle who usually takes his cut. There are also many other financial services that the banks cover such as:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Personal &amp; Business Loans<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Mortgages<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Investments<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The DeFi system is powered by cryptocurrency (decentralized money) and runs on blockchain technology. Blockchain is a type of distributed ledger which functions without any central authority and instead stores its data across several nodes which are individual members of the public and not a central governing body. The DeFi system uses blockchain technology and is not controlled by any central entity: this means that no one person or company can control it.<\/span>[\/vc_column_text][vc_column_text css=&#8221;.vc_custom_1627415768226{padding-top: 2% !important;}&#8221;]\n<h3><b>Pros &amp; Cons of Centralised Finance (CeFi)<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Some of the other downsides of having a centralised financial (CeFi) system are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Speed:<\/b><span style=\"font-weight: 400;\"> Slower transactions<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Blocked Transactions:<\/b><span style=\"font-weight: 400;\"> Risk of a bank stopping or pausing transactions<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Crime:<\/b><span style=\"font-weight: 400;\"> The ledger of transactions is private which can lend its hand to money laundering or other financial crimes<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Financial Crash:<\/b><span style=\"font-weight: 400;\"> Users have less control over money (In a financial crash your bank may stop you withdrawing all your cash)<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Some benefits of a centralised financial (CeFi) system:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Support:<\/b><span style=\"font-weight: 400;\"> Customers can get support if they make a wrong transaction<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Hacks:<\/b><span style=\"font-weight: 400;\"> Payments can be blocked if you were hacked<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Ring Fenced:<\/b><span style=\"font-weight: 400;\"> Some protections if a bank\/financial institution fails<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The main premise of Decentralised Finance is to cut out the man in the middle to allow the public to participate in peer-to-peer financial services such as:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Lending<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Borrowing<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Asset Management\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Much more<\/span><\/li>\n<\/ul>\n[\/vc_column_text][vc_column_text css=&#8221;.vc_custom_1627415788140{padding-top: 2% !important;}&#8221;]\n<h2><b>What Role Do Decentralized Applications (dApps) Play?<\/b><\/h2>\n<p><a href=\"https:\/\/www.investopedia.com\/terms\/d\/decentralized-applications-dapps.asp\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Decentralized applications<\/span><\/a><span style=\"font-weight: 400;\">, dApps for short, is an application which does not rely on a centralized server to function. Companies like Facebook or Amazon run their apps from a centralised servers they control, whereas a dApp is run on multiple servers\/computers (nodes) etc controlled by individuals.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Some of the key benefits of dApps in DeFi are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">dApps will be able to control user validation and transaction monitoring without depending on any third party services.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">dApps can have their own blockchain like Bitcoin or exist as a smart contract inside another cryptocurrency&#8217;s block chain.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Free from control of any third party, information cannot be changed once published.<\/span><\/li>\n<\/ul>\n[\/vc_column_text][vc_column_text css=&#8221;.vc_custom_1627415800600{padding-top: 2% !important;}&#8221;]<span style=\"font-weight: 400;\">Decentralized applications (dApps) and\/or Protocols are used for making transactions in Bitcoin and Ethereum. Most dApps are built using the Ethereum network due to its ease of use compared to making dApps on the Bitcoin network.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">One of the other key benefits for using Ethereum is the built in <\/span><a href=\"https:\/\/www.coindesk.com\/learn\/ethereum-101\/ethereum-smart-contracts-work\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">smart contract features<\/span><\/a><span style=\"font-weight: 400;\"> that are programmed with a set of conditions which will automatically execute when met. Smart contracts negate the need for any third party (Banks or Brokers etc) to be involved with financial transactions as they are all automated with smart contracts. Essentially the human element is replaced by a <\/span><a href=\"https:\/\/ethereum.org\/en\/developers\/docs\/smart-contracts\/languages\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">smart contract that has a set of rules written in code (Solidity or Vyper)<\/span><\/a><span style=\"font-weight: 400;\"> that need to be met for a transaction to take place.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A good example of a smart contract has been quoted below from Coindesk.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">\u201c<\/span><\/i><i><span style=\"font-weight: 400;\">For example, say a user wants his or her money to be sent to a friend next Tuesday, but only if the temperature climbs above 90 degrees Fahrenheit according to weather.com. Such rules can be written in a smart contract.<\/span><\/i><i><span style=\"font-weight: 400;\">\u201d<\/span><\/i>[\/vc_column_text][vc_column_text css=&#8221;.vc_custom_1627455889864{padding-top: 2% !important;}&#8221;]\n<h3><b>What are good examples of dApps?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">dApps can be used by those in the DeFi space to create more liquidity for their projects, invest into different projects or to trade cryptocurrency.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Stable Coins:<\/b><span style=\"font-weight: 400;\"> which provide price stability for investors who don&#8217;t want their funds tied up in volatile cryptocurrencies.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Decentralized Exchanges (DEXs):<\/b><span style=\"font-weight: 400;\"> where people can buy cryptocurrencies and\/or exchange without having to trust any centralized authorities with their money.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Yield Farming:<\/b><span style=\"font-weight: 400;\"> which allows crypto holders to essentially earn interest for lending their coin to other investors. Similar to how a bank would earn interest off your loan, you act as a bank and get interest from the money you lend.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Lending Protocols:<\/b><span style=\"font-weight: 400;\"> that allow users to borrow money without a centralized credit provider having any control over the loan.<\/span><\/li>\n<\/ul>\n<p>Some good DeFi platforms that are more trusted include:<\/p>\n<ul>\n<li><a href=\"https:\/\/compound.finance\/\" target=\"_blank\" rel=\"noopener\">Compound Finance<\/a><\/li>\n<li><a href=\"https:\/\/makerdao.com\/en\/\" target=\"_blank\" rel=\"noopener\">Maker Dao<\/a><\/li>\n<li><a href=\"https:\/\/uniswap.org\/\" target=\"_blank\" rel=\"noopener\">Uniswap<\/a><\/li>\n<li><a href=\"https:\/\/synthetix.io\/\" target=\"_blank\" rel=\"noopener\">Synthetix<\/a><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The defi applications are all run on decentralized, internet-based platforms where anyone can participate in decision making and maintenance of the software. Anyone is able to create DeFi apps for their own use or sell them as products; there&#8217;s no central authority controlling who gets access to these tools.<\/span>[\/vc_column_text][vc_column_text css=&#8221;.vc_custom_1627415892532{padding-top: 2% !important;}&#8221;]\n<h3><b>Pros &amp; Cons of Decentralised Finance (DeFi)<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Decentralized finance will continue to grow because there are many advantages over traditional financial systems such as:<\/span><\/p>\n<ul>\n<li><b>Transparency:<\/b><span style=\"font-weight: 400;\"> A decentralized network provides transparency into all data stored within its records and enables anyone who has access rights to view the records.<\/span><\/li>\n<li><b>Decentralized:<\/b><span style=\"font-weight: 400;\"> When a defi service is decentralized, it doesn\u2019t have to operate through any one organization or person so users can rely on their own skills and knowledge rather than trusting in somebody else who may not know what they are doing. This also means there is no single point of failure if something drastic were to happen.<\/span><\/li>\n<li><b>Earnings:<\/b><span style=\"font-weight: 400;\"> There are many projects that allow users to earn money on their crypto, many banks don&#8217;t offer high interest rates anymore so many people are turning to things such as yield farming.<\/span><\/li>\n<li aria-level=\"1\"><b>Speed: <\/b><span style=\"font-weight: 400;\">Nearly instantaneous transactions with reduced fees compared to centralised exchanges.<\/span><\/li>\n<li aria-level=\"1\"><b>Immutable: <\/b><span style=\"font-weight: 400;\">Records cannot be changed or edited once made, meaning nothing can be hidden from auditors such as financial crimes.<\/span><\/li>\n<li aria-level=\"1\"><b>Smart Contracts:<\/b><span style=\"font-weight: 400;\"> A fully automated system built on rules that cannot be bent and reduces human error.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The above list are some of the many benefits of DeFi, however that is not say there are no negatives to DeFi. We have listed a few possible situations below:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Unstable Projects:<\/b><span style=\"font-weight: 400;\"> Some projects may be hosted by a team who have little knowledge of financial management leading to bad management and potential collapses of a project with liquidity being lost.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Scams:<\/b><span style=\"font-weight: 400;\"> There are many scams online and the crypto space has had it fair share, some projects may be able to hide their bad intentions from users leading to lost funds.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Bad Code:<\/b><span style=\"font-weight: 400;\"> If a smart contract is badly coded it could lead to a wealth of problems or funds being lost.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>No Support:<\/b><span style=\"font-weight: 400;\"> If a user accidentally transfers to the wrong address or network, the funds will be lost.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>High Fees:<\/b><span style=\"font-weight: 400;\"> When the market is trading large columns the gas fees usually go through the roof, leading to less profits or none at all.<\/span><\/li>\n<\/ul>\n[\/vc_column_text][vc_column_text css=&#8221;.vc_custom_1627417570461{padding-top: 2% !important;}&#8221;]\n<h2><b>Where to Find DeFi Projects?<\/b><\/h2>\n<p>There are many DeFi project available which you can find on the links below, remember all projects are high risk and prone to failure.<\/p>\n<ul>\n<li><a href=\"https:\/\/defipulse.com\/\" target=\"_blank\" rel=\"noopener\">https:\/\/defipulse.com\/<\/a><\/li>\n<li><a href=\"https:\/\/defillama.com\/home\" target=\"_blank\" rel=\"noopener\">https:\/\/defillama.com\/<\/a><\/li>\n<\/ul>\n[\/vc_column_text][vc_column_text css=&#8221;.vc_custom_1627473494698{padding-top: 2% !important;}&#8221;]\n<h2><strong>Sources on DeFi<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">To summarise decentralised finance is a new technology that will essentially automate the finance industry and remove the human element. DeFi is still being developed and is high risk, we advise you to do your own research from other sources such as:<\/span>[\/vc_column_text][vc_column_text css=&#8221;.vc_custom_1627417594847{padding-top: 2% !important;}&#8221;]\n<ul>\n<li><a href=\"https:\/\/www.coindesk.com\/what-is-defi\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Coin Desks &#8211; Defi Guide<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.youhodler.com\/blog\/centralized-finance-cefi-vs-decentralized-finance-defi\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">YOUHODLER &#8211; What Differentiates CeFi from DeFi?<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/crypto101.sounder.fm\/episode\/7\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">The Crypto 101 Show &#8211; What Is DeFi<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.youtube.com\/watch?v=btB__oHQ0sU\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">99Bitcoins &#8211; What is DeFi<\/span><\/a><\/li>\n<\/ul>\n[\/vc_column_text][vc_column_text css=&#8221;.vc_custom_1627416589716{padding-top: 2% !important;}&#8221;]A great video from 99 Bitcoins explains DeFi in simple terms.[\/vc_column_text][nectar_video_lightbox link_style=&#8221;play_button_2&#8243; nectar_play_button_color=&#8221;Default-Accent-Color&#8221; image_url=&#8221;7058&#8243; hover_effect=&#8221;defaut&#8221; box_shadow=&#8221;none&#8221; border_radius=&#8221;none&#8221; play_button_size=&#8221;default&#8221; video_url=&#8221;https:\/\/www.youtube.com\/watch?v=btB__oHQ0sU&#8221;][\/vc_column][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_tablet=&#8221;inherit&#8221; column_padding_phone=&#8221;inherit&#8221; column_padding_position=&#8221;all&#8221; column_element_spacing=&#8221;default&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; column_link_target=&#8221;_self&#8221; el_class=&#8221;custom-page-review&#8221; gradient_direction=&#8221;left_to_right&#8221; overlay_strength=&#8221;0.3&#8243; width=&#8221;1\/3&#8243; tablet_width_inherit=&#8221;default&#8221; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; bg_image_animation=&#8221;none&#8221; border_type=&#8221;simple&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][nectar_btn size=&#8221;large&#8221; open_new_tab=&#8221;true&#8221; button_style=&#8221;regular&#8221; button_color_2=&#8221;Accent-Color&#8221; icon_family=&#8221;none&#8221; text=&#8221;Join Coinbase&#8221; url=&#8221;https:\/\/www.coinbase.com\/join\/hickma_dg&#8221;][nectar_btn size=&#8221;large&#8221; open_new_tab=&#8221;true&#8221; button_style=&#8221;regular&#8221; button_color_2=&#8221;Accent-Color&#8221; icon_family=&#8221;none&#8221; text=&#8221;Join Binance&#8221; url=&#8221;https:\/\/accounts.binance.com\/en\/register?ref=SQU59UI8&#8243;][vc_widget_sidebar enable_sticky=&#8221;true&#8221; 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