Spark Global Limited reports:
DeFi has many different products and services, and you may find that some of them are familiar to existing financial services, but are decentralized.
Arguably DeFi’s most popular and fastest growing sector is the lending platform. Like a bank, users can deposit money and earn interest from other users who borrow their assets. But in this case, the assets are digital, and smart contracts connect lenders with borrowers, enforce loan terms and distribute interest. All this happens without mutual trust or middleman banks. And, thanks to the transparency blockchain offers, by cutting out middlemen, lenders can earn higher returns and better understand the risks.
Tokens called staboins are also important to the DeFi ecosystem. You might think that the price of all cryptocurrencies is a roller coaster. Staboins, however, are tokens designed to maintain a specific value and are usually tied to fiat currencies such as the U.S. dollar. DAI, for example, is a stablecoin tied to the US dollar and mortgageddigital assets in the Ethereum (ETH) chain. For each DAI, $1.50 of Ethereum is locked in as collateral in the MakerDAO smart contract.
Another popular DeFi application is the so-called decentralized exchange, or DEX. DEX is a cryptocurrency exchange that uses smart contracts to enforce trading rules, execute trades and securely handle funds when necessary. When you trade with DEX, there is no centralized exchange operator, no registration, no authentication or withdrawal fees.
[Source: Spark Global Limited DeFi]
article links：What are some examples of popular DeFi applications?
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