Understanding DeFi : the roles, tools, risks, and rewards of decentralized finance / Alexandra Damsker.

Format:

Book

Author/Creator:

Damsker, Alexandra, author.

Language:

English

Subjects (All):

Cryptocurrencies.

NFTs (Tokens).

Smart contracts.

Blockchains (Databases).

Physical Description:

1 online resource (200 pages) : illustrations

Edition:

First edition.

Place of Publication:

Sebastopol, CA : O'Reilly Media, Inc., 2024.

Summary:

Decentralized finance (DeFi) is a rapidly growing field in fintech, having grown from $700 million to $100 billion over the past three years alone. But the lack of reliable information makes this area both risky and murky. In this practical book, experienced securities attorney Alexandra Damsker explains DeFi's role in both blockchain and finance. Ideal for developers looking to build decentralized applications (DApps), this book compares DeFi to traditional bank-led fintech and explains why DeFi is exploding in interest and popularity. You'll explore the growing array of DApps and platforms in various categories, including their benefits and drawbacks, and learn how DeFi tools work together from the perspective of both users and developers.

Contents:

Cover

Copyright

Table of Contents

Preface

How Is This Book Organized?

Who Is This Book for, and What Will You Learn?

Conventions Used in This Book

O'Reilly Online Learning

How to Contact Us

Acknowledgments

Chapter 1. Introduction to DeFi

What Is Blockchain, Anyway?

A Brief History of Accounting

Single-Entry Bookkeeping

Double-Entry Bookkeeping

Massive Fraud, or the Status Quo Officially Doesn't Work Any Longer

Triple-Entry Bookkeeping

Triple-Entry Accounting

The Bitcoin Revolution: The First Blockchain Use Case

Ethereum and the Smart Contract Revelation

Smart Contracts

Ethereum's Innovation: Self-Executing Programming → Smart Contracts

Tenets of Blockchain (According to Me)

Open

Shared

Distributed

Consensus

Permanence (or Immutability)

Anonymity

Trustless

What Does Any of This Have to Do with Finance?

What Is Finance?

How Money Flows in Banks and Economies

Banks Are Using Your Cash-and Not Paying for It

What Is Decentralized Finance, and Why Is It Important?

Conclusion

Chapter 2. The Building Blocks of DeFi

Protocols

Platforms

A Trilemma Solution

Deployment Network

Decentralized Applications

Incentivized

Decentralized

Blockchain-Based Protocol

Open Source (Maybe)

A Word on Wallets

Custodial Versus Noncustodial

Are There Any Problems?

Stablecoins

Asset Versus Currency

Enter Stablecoins

Types of Stablecoins

Governance Tokens

Lending

Derivatives and Synthetics

Insurance

Prediction and Betting

Chapter 3. The Tools of DeFi

Wallets (Again!) and Oracles

The Oracle Problem

Stablecoins Versus CBDCs

Incentivized Governance Tokens

Wallets Part III: Hosted Versus Unhosted and the Purpose of Knowing Customer Identity

True or False?

Anti-Money Laundering and Know Your Customer

AML

KYC Versus AML

What Is Required?

What Is the Impact?

US Regulation

Custodians and Intermediaries

Chapter 4. How to Build a DeFi Application or Protocol

Basic Principles of Financial Tools

Developing Your Application

Rule 1: Which Market?

Rule 2: Did You Apply Basic Business Principles and Process?

Rule 3: Where Do You Build?

Rule 4: What's Your Token, and Did You Apply Proper Tokenomics?

Applying Tokenomics

Rule 5: Did You Audit Your Tech?

Rule 6: How Do You Launch?

Chapter 5. Making Money with DeFi

Investing with a DeFi Protocol on Blockchain

Is It Really "Investing"?

DeFi Protocol Types

Protocol 1: Staking a Token

Protocol 2: Lending Protocols

Subprotocol 2A: Liquidity Provider on a Swap or Decentralized Exchange

Subprotocol 2B: Borrower-Lender Platforms

Subprotocol 2C: Borrowing Platforms

Subprotocol 2D: Yield Farming

Protocol 3: Memecoins

Notes:

OCLC-licensed vendor bibliographic record.

Includes index.

ISBN:

9781098120757

1098120752

OCLC:

1417404822