Have you ever heard the term "DeFi" thrown around in conversations about cryptocurrencies and blockchain technology? If you've felt a little lost or confused by this new buzzword, you're not alone!

In this blog post, we'll demystify DeFi and explain why it's becoming increasingly popular in the world of next-gen finance.

DeFi, short for Decentralised Finance, is a movement that aims to revolutionise the traditional financial system by leveraging the power of blockchain technology. DeFi allows people to access financial products like lending, borrowing, and trading without the need for intermediaries such as banks or financial institutions.

At its core, DeFi is built on smart contracts – self-executing agreements that run on blockchain networks like Ethereum. These smart contracts enable the creation of decentralised applications (dApps) that provide a wide range of financial services, such as decentralised exchanges (DEXs), lending platforms, and stablecoins (cryptocurrencies with a value pegged to a stable asset like the US dollar).

So why is DeFi gaining traction? There are a number of reasons:

**Accessibility:** DeFi platforms are open to anyone with an internet connection, which means that people in developing countries or those with limited access to traditional banking can now participate in the global financial system.

**Transparency:** With all transactions recorded on a public blockchain, users can easily audit the platform's operations and ensure their funds are being handled responsibly.

**Control:** DeFi users maintain full control over their assets and can interact directly with smart contracts, eliminating the need for middlemen and reducing fees.

**Customisation:** Users can create their own financial products or services by combining various DeFi building blocks, opening the door for innovative solutions that cater to individual needs.

In short, DeFi is transforming the way we interact with financial services by offering a decentralised, transparent, and inclusive alternative to the traditional system.

As the technology continues to develop and mature, we can expect to see even more exciting innovations in the world of decentralised finance, we’re looking at you NFTs!

Are you ready to [Access DeFi](https://blockearner.com.au/products/defi-access/)?

large_Frame 1597877696.png

medium_Frame 1597877696.png

small_Frame 1597877696.png

thumbnail_Frame 1597877696.png

Frame 1597877696.png

DeFi allows people to access financial products like lending, borrowing, and trading without the need for intermediaries such as banks or financial institutions.

What is DeFi?

# What is AAVE?

Aave is a way for users to be connected to a worldwide network of lenders and borrowers in the cryptocurrency field. It’s all automated and works on a non-custodial basis, meaning you are in total control of your own wallet and where you choose to direct your cryptocurrency digital assets. 

The group take their name from the Finnish word for ‘phantom’ or ‘something unseen’. Rather than relying on traditional banking systems and brick and mortar (or maybe marble and gold) buildings, the Aave protocol is fully automated allowing individual lenders and borrowers to connect with ghost-like efficiency via the liquidity pool. As of December 2021, the total value of this pool has the cash equivalent of more than $27 billion. 

The protocol is built on the premise of lending and borrowing digital assets with in-built safety nets. This is done by employing smart contracts that automatically facilitate loan activity as well as innovative concepts such as **collateral liquidations** and **staker slashing**. Ultimately, this simply means it is very difficult to default on your payments.

In other words, join the global pool of lenders and borrowers, follow the rates as they change and watch your percent yield grow!

***Working Example***

Let’s say you want to use Block Earner to borrow or lend USDC, the digital stablecoin pegged to the United States dollar. When this transaction is opened, you receive a **tokenised** version of that loan in return. This takes the form of aUSDC, aka AAVE USDC.

When buying 1000 USDC worth of aUSDC, this is equivalent to 1000 aUSDC. The rate stays at exactly 8% all year. The final standings would be at 1080 aUSDC, which can be sold back for 1,080 USDC and then finally back to AUD. 

Anyone holding aUSDC will find their balance constantly increasing proportional with the yield rates at the time. For Block Earner users, this is updated daily. Notably, this value is guaranteed to never go negative, meaning your USDC value will never go down.

The exact details of this workflow are all handled by Block Earner’s backend, leaving the technical challenges out of your hands. All you need to do is choose your assets and let the code handle the dirty work!

large_Frame 1597877694.png

medium_Frame 1597877694.png

small_Frame 1597877694.png

thumbnail_Frame 1597877694.png

Frame 1597877694.png

Aave is a way for users to be connected to a worldwide network of lenders and borrowers in the cryptocurrency field...

What is AAVE?

Ethereum is the world's first programmable blockchain with smart contracts, that features its very own cryptocurrency Ethereum. At its core, Ethereum is a decentralised global software platform powered by blockchain technology.  

Ethereum is the second-largest cryptocurrency by market capitalisation. However, unlike Bitcoin, Ethereum was designed to be more than just a medium of exchange and store of value. Instead, Ethereum was to be a decentralised blockchain platform that could be used by developers to create and run decentralised applications ([dApps](https://ethereum.org/en/developers/docs/dapps/)) and [smart contracts](https://ethereum.org/en/developers/docs/smart-contracts/).

# What are decentralised applications and smart contracts?

Think of the Ethereum blockchain like a decentralised app store. A platform that hosts applications that provide unique tools and experiences for customers. The Ethereum blockchain works in a similar way, software developers can build and release new products via the Ethereum blockchain network.

Launched in 2015 by programmer Vitalik Buterin. The introduction of the programmable blockchain has made Ethereum the home to thousands of decentralised applications including Decentralised Finance ([DeFi](https://blockearner.com.au/blog/what-is-defi/)), NFTs, Gaming, and the Metaverse, for millions of people.

The Ethereum market cap is over $208 billion AUD, and the [current price](https://coinmarketcap.com/currencies/ethereum/) per Ethereum sits at over $4,440 AUD as of August 8th 2022*.

![ETH Chart (8:2022).png](https://strapi-service-execution-strapibucketc6c2af7f-xqyd4w1cm74e.s3.ap-southeast-2.amazonaws.com/ETH_Chart_8_2022_fe2fa07a62.png)
*Ethereum (ETH) [Market Cap](https://coinmarketcap.com/currencies/ethereum/) 8/8/2022

# Benefits of Ethereum (ETH)

**Global finance for everyone**

Traditional finance is exclusionary. In 2017, the World Bank [reported](https://openknowledge.worldbank.org/handle/10986/29510) 1.7 billion people were “unbanked” meaning these individuals did not have adequate access to accounts or financial tools.

Decentralised finance, powered by Ethereum, is driving an alternative financial and technological infrastructure. One that is global, open source, and accessible to all who have access to the internet, regardless of nationality, ethnicity, gender, or socioeconomic class.

**The internet of assets**

Ethereum is more than just a digital currency. Today, essentially any asset can be represented, traded, and owned as non-fungible tokens (NFTs). These tokens are called [ERC-20 tokens](https://ethereum.org/en/developers/docs/standards/tokens/erc-20/) and they are minted onto the Ethereum Blockchain.

You can also program these tokens thanks to Ethereum smart contracts, and receive royalties automatically when the asset is resold. The blockchain works as an open accounting system, and enables new possibilities that are always expanding.

# How do I buy Ethereum?

Ethereum is divisible up to 18 decimal places, so you don't have to buy 1 whole ETH. You can buy fractions at a time – as little as 0.000000000000000001 ETH.

The introduction of Crypto Earner provides Australians with the simplest way to buy and earn 4% fixed annual yield on any amount (even fractional) of Ethereum and earn a daily compounding yield on their Ethereum holdings, in Ethereum. With no lock-in periods, no minimum deposit amounts, and low fees — watch your balance grow live in the app or withdraw your holdings at anytime, anywhere.

large_Block Earner What is Ethereum? (ETH).jpg

medium_Block Earner What is Ethereum? (ETH).jpg

small_Block Earner What is Ethereum? (ETH).jpg

thumbnail_Block Earner What is Ethereum? (ETH).jpg

Block Earner What is Ethereum? (ETH).jpg

Ethereum is the second-largest cryptocurrency by market capitalisation. However, unlike Bitcoin, Ethereum was designed to be more than just a medium of exchange and store of value.

What is Ethereum? (ETH)

Read the Latest Crypto Market News

Ethereum (3)

What is DeFi?

What is AAVE?

What is Ethereum? (ETH)

Company

Social Media

Memberships & Awards