What is DeFi (Decentralized Finance) | Yield Farming Part 1
Beginners guide to DeFi Yield Farming. This is a three part series on DeFi yield farming and how to get into liquidity pools. At the end of this series, you're going to understand what all these terms mean.
Watch Part 2: Liquidity Pools and Liquidity Providers vimeo.com/beessocial/liquiditypools
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In this yield farming video series you will understand what those terms so that you'll be able to use them to profitably grow your capital either with us at B's dot social or on your own. Our goal is to help you understand how to take control of your own life.
If you want to hang out with us and do it, you're welcome to, but if you want to do it on your own and take this as a kickstart to start your own learning about decentralized finance, cryptocurrency, and other things, please do.
When we come back, we'll jump right into understanding some of these terms. Let's first take the term DeFi yield farming. Let's take a part that term and let's take apart the term DeFi. DeFi really refers to something called decentralized finance.
Decentralized finance can better be defined by defining its opposite, centralized finance. That's something that we're all used to today.
Centralized finance means that there is a powerful company or institution at the center of the whole financial transaction. A bank is a central financial institution. You want a loan from the bank? You go to the bank. If the people at the bank don't like you, if they don't like your credit, they don't like anything about you.
They don't like your color, where you're from, where you live. You may not get that loan.
All these things have to do with a centralized organization, controlling access to capital, and the rules are subject on all the rules they've written and the interpretation of those rules and whether or not you fit those interpretations.
Based upon the time that the person interpreting them is looking at them. Yeah. We're not in complete contrast, the complete opposite, like on opposite day, what these centralized finance in essence is a complete blowing apart of that de-centralized finance is best looked by the elements, these little primitive parts about saving lending banking, holding your money, moving your money.
In de-centralized finance, these elements, these things are all programs. Self-executing programs that exist on something called the Ethereum blockchain. That's just another fancy name for the network that all these programs run on. They're not hosted on Amazon. They're not hosted on Google. They are hosted in essence, on this network of nodes in no centralized place where no one can control them or stop or start what they're doing.
What does that mean for you? You can go and get your lending decision based upon not anyone's interpretation, but whether or not you meet the rules that have set been set up by this program. If it says that you have to do X things and do Y things on Thursday, if you do both of those things, you'll be able to get what you need from this decentralized app.
One of the things that exist on the DeFi. In the framework, a type of program, the program's really called a smart contract. A type of smart contract that exists is called a liquidity pool. And with liquidity pools, people can execute yield farming, and that puts together the first part DeFi yield farming.
We're going to go through two more videos where we're going to walk through a lot of these concepts in more detail. We're going to take a look at where liquidity pools can be found. We're going to take a look at some yield farming strategies. We're going to take a look at the different automated market makers that make this all available. Stay tuned and tune in for our next video.
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Learn more about Bitcoin, Ethereum, Decentralized Finance, and ERC Tokens. You'll also learn about yield farming and staking your tokens to make gains with your cryptocurrency.