Over the past three classes, we’ve learned what blockchain is, how to invest in it and how to use a hardware wallet. Now, we’re ready to take all that knowledge and put it to use in the most innovative and ground-breaking financial applications that crypto offers. “Decentralized finance” or “defi” is an entire ecosystem of financial applications that replace everything in the centralized world of finance.
Using just your hardware wallet, you can trade on token for another, earn interest for lending your crypto, buy NFTs and more. The unique feature of decentralized finance is that there is no gatekeeper. Exchanges like Coinbase and Gemini restrict you in how much you can trade at once, what you can trade, and how much you can withdraw in a specific time period. In DeFi, you can do whatever you want and you retain custody of your own funds 100% of the time.
Once you get into DeFi, you can buy all sorts of tokens that are simply not available on centralized exchanges, like the $BED Index token, which is an index comprised of 1/3rd BTC, 1/3rd ETH and 1/3rd of the top defi tokens. Think of it as an index fund that gives you broad exposure to the crypto market without having to do all work of portfolio management.
In this fourth class, we will dive deep into:
How to use decentralized exchanges like Uniswap to swap one token for another.
How to avoid scams and pitfalls to make sure you’re actually getting the correct token.
How to use a special tool to avoid getting ripped off by pesky frontrunning bots.
How to use Aave to earn interest on your crypto by lending assets.