What is Defi？

DeFi, short for Decentralized Finance, is an innovative financial system offering a wide range of services on public blockchains, primarily Ethereum. It allows individuals to engage in activities such as earning interest, borrowing, lending, trading derivatives and assets, buying insurance, and more, all without the need for traditional financial intermediaries like banks or brokers. This system is notable for its speed, openness, and lack of paperwork, essentially serving as a digital alternative to Wall Street but more accessible and cost-efficient.

Why is Defi important？

The importance of DeFi lies in its potential to democratize financial services, making them more accessible, open, and equitable. It operates on a peer-to-peer basis, is global, pseudonymous, and open to anyone with an internet connection, which contrasts sharply with the traditional financial system's centralized and often restrictive nature.

What are the currently well-known head Defi projects?

• AAVE: A leading multi-chain money-market platform that enables users to lend and borrow a variety of cryptocurrencies in a non-custodial manner.

• GMX: A multi-chain derivatives platform available on Avalanche, Arbitrum, and BNB Chain. It allows for the trading of futures, perpetual contracts, and options with up to 25x leverage.

• Curve Finance: Specializes in stablecoin trading and is known for its low slippage and high liquidity, achieved through a unique liquidity provision mechanism. Curve Finance has emerged as a significant player in the DeFi market, specializing in stablecoin swaps.

• Lido Finance: The largest DeFi protocol by TVL, offering liquid staking derivatives for Ethereum, Solana, and Polygon. Lido allows users to earn yield on staked assets without committing their capital for long periods.

What are the important indicators for evaluating Defi?

When evaluating DeFi projects, important indicators include:

• Total Value Locked (TVL): Reflects the amount of capital deposited in DeFi protocols, indicating the project's size and health.

• Security and Audit Reports: Assessing a project's security measures and the results of any audits can help gauge its safety.

• User Adoption and Activity: High levels of engagement and transaction volume can indicate a project's popularity and reliability.

• Governance and Community Involvement: Projects with active, decentralized governance tend to be more resilient and aligned with users' interests.