Updated: 6 days ago
Defi is an acronym for Decentralized Finance, and is short for decentralized finance. DeFi plays a crucial role in Web 3, an internet that puts the user first. There’s millions of ways to use DeFi, but in this article we’re going to focus on one area in particular: cryptocurrency pegged loans.
Inspired by the efficiency of blockchain, we’ve created a decentralized peer-to-peer (P2P) lending platform without any middle men. Defi Cryptos will enable everyone to directly lend and borrow Bitcoins (BTC) and Ethereum (ETH) from each other. Unlike centralized solutions that serve only to connect borrowers with lenders, Aave aims to create a self liquidating ecosystem by connecting borrowers, lenders and service providers on our network. By using smart contracts to transfer value across different blockchains, Aave will realize the full potential of the P2P lending platform.
DeFi (Decentralized Financial Services) is a still a very new concept that has begun to make news headlines in the last 12 months. There are currently three main avenues of DeFi: 1. Stablecoins – cryptocurrencies that target price stability and aim to be the equivalent of fiat currencies; 2. Gambling & Casino – gaming platform built on blockchain technology that allows users to place wagers on sports, stocks, crypto and more; 3. Collateralized trading systems that give users exposure to DeFi without having to own the underlying cryptocurrencies (like cryptocurrency derivatives).
Aave is a P2P crypto currency lending platform. As this protocol gains traction as a decentralized lending platform it will likely be the first area of Web 3.0 to reach mainstream adoption. It allows users to lend, borrow and earn interest on cryptoassets. This is possible without a central service facilitating the loan (read: banks).