<figure><img alt="" src="https://cdn-images-1.medium.com/max/1024/1*TAwXZcZoXh4SAvJoqNYewg.png" /></figure><p>In this blog, we will look in-depth at DeFi, a decentralised financial system powered by blockchain technology. We will examine the fundamental features of DeFi networks, network fees, the coins used, key differences from centralised finance (CeFi), and the advantages and disadvantages from a technical perspective.</p><p><strong>How DeFi Works?</strong></p><p>DeFi (Decentralized Finance) is a financial system powered by blockchain technology that offers an alternative to the traditional financial system (CeFi). It enables users to transact directly with each other without relying on a central authority. To start with DeFi, you need to create a cryptocurrency wallet and purchase cryptocurrency. Then, you can connect to your chosen DeFi platform and perform various financial transactions.</p><ol><li><strong>Smart Contracts:</strong> DeFi transactions are managed by smart contracts, which are automated programs that trigger specific actions when predefined conditions are met. This allows for reliable and transparent execution of money transfers, lending, borrowing, and other financial activities.</li><li><strong>Blockchain:</strong> DeFi networks record transactions on a public ledger (blockchain), making all transactions transparent and traceable.</li><li><strong>Cryptocurrencies:</strong> Various cryptocurrencies are used in DeFi networks to conduct transactions and transfer value. The most commonly used cryptocurrencies include Ethereum (ETH), stablecoins, and governance tokens.</li></ol><p><strong>Coins Used in DeFi Networks</strong></p><p>DeFi networks utilize various cryptocurrencies. The most commonly used coins are:</p><ul><li><strong>Ethereum (ETH):</strong> The most popular token in the DeFi ecosystem. Many DeFi protocols operate on the Ethereum blockchain.</li><li><strong>Stablecoins:</strong> Cryptocurrencies pegged to a stable asset like the US Dollar. They are widely used in DeFi lending and borrowing protocols.</li><li><strong>Governance Tokens:</strong> Some DeFi protocols offer governance tokens that grant users the right to participate in the platform’s governance.</li></ul><p><strong>Key Features of DeFi Networks</strong></p><p><strong>Decentralization:</strong></p><p>The most significant feature of DeFi is its ability to execute transactions securely and transparently without relying on a central authority. In traditional financial systems, central authorities such as intermediary institutions and banks play a role, whereas in DeFi, this role is undertaken by blockchain technology. This eliminates the risk of a single point of failure and gives users more control over their funds.</p><p><strong>Transparency:</strong></p><p>All transactions in DeFi networks are public and traceable on the blockchain. This ensures that all transactions are transparent and auditable, addressing the issue of privacy and accountability that exists in traditional financial systems.</p><p><strong>Accessibility:</strong></p><p>Anyone with an internet connection anywhere in the world can access DeFi networks. This provides inclusive financial services to those who have limited access to the traditional financial system. Without the need for a geographic location or a bank account, anyone can use DeFi platforms to perform financial transactions.</p><p><strong>Security:</strong></p><p>DeFi networks are protected by cryptographic encryption and robust blockchain technology. This offers a higher level of security compared to traditional financial systems. DeFi networks are more resistant to fraud and cyber-attacks, playing a crucial role in safeguarding users’ funds.</p><p><strong>Differences Between Centralized and Decentralized Finance</strong></p><figure><img alt="" src="https://cdn-images-1.medium.com/max/1024/1*ANZlY6yBzh5iE6xzr08cBQ.png" /></figure><p><strong>Advantages of DeFi:</strong></p><ul><li><strong>Decentralization:</strong> DeFi operates without any central authority. This allows users to have more control over their funds and financial transactions.</li><li><strong>Transparency:</strong> All transactions are recorded on a public ledger, ensuring transparency and accountability in the financial system.</li><li><strong>Accessibility:</strong> Anyone with an internet connection can access DeFi networks, providing inclusive financial services to those with limited access to the traditional financial system.</li><li><strong>Security:</strong> DeFi networks offer a higher level of security through cryptographic encryption and robust blockchain technology.</li><li><strong>Low Fees:</strong> Transaction fees in DeFi networks are generally lower compared to traditional financial institutions.</li><li><strong>Rapid Innovation:</strong> DeFi’s decentralized nature allows for faster innovation compared to traditional financial systems.</li></ul><p><strong>Disadvantages of DeFi:</strong></p><ul><li><strong>Complexity:</strong> DeFi networks and smart contracts can be complex and challenging for beginners to understand.</li><li><strong>Security Risks:</strong> Like any new technology, DeFi networks have security risks. Errors or flaws in smart contracts can lead to loss of funds.</li><li><strong>Volatility:</strong> Cryptocurrencies are highly volatile, making DeFi investments risky.</li><li><strong>Regulations:</strong> DeFi is still an emerging field with uncertain legal regulations, creating uncertainty for investors.</li></ul><img src="https://medium.com/_/stat?event=post.clientViewed&referrerSource=full_rss&postId=4e3df2c9f61d" width="1" height="1" alt="">

What is DeFi?

<figure><img alt="" src="https://cdn-images-1.medium.com/max/1024/1*dIRgBsZJXrjCg9mqsCLR_g.png" /><figcaption>Tron Network</figcaption></figure><p>Established in 2017, the TRON network is a leading platform that offers decentralised applications (dApps) and high-performance blockchain solutions. Founded by Justin Sun, TRON aims to provide greater control and autonomy to content creators and users, and it has experienced significant growth and development in recent years.</p><h3>Key Features of the TRON Network</h3><ol><li><strong>High Performance</strong>: The TRON network can handle over 2000 transactions per second. This means TRON is faster than many other blockchains known for their high transaction speeds and low fees.</li><li><strong>Decentralisation</strong>: TRON operates on a decentralized structure. This means that the network is not controlled by any central authority, and users have full control over their assets.</li><li><strong>DApp Support</strong>: The TRON network is an excellent platform for developing and running decentralized applications. TRON offers developers a comprehensive toolset to easily create dApps.</li></ol><p><strong>Recent Updates on the TRON Network:</strong></p><ul><li><strong>Periander Upgrade</strong>: Released on July 11, 2024, this upgrade enhanced the Stake 2.0 mechanism, ensured compatibility with EIP-3855, optimized smart contract interface calls, and revamped the P2P network module.</li><li><strong>Bias Upgrade</strong>: Scheduled for the first quarter of 2024, this significant update aims to simplify protocol development, enhance network stability, and optimize performance.</li></ul><p><strong>Advantages of the TRON Network:</strong></p><ul><li><strong>Fast and Efficient Transactions</strong>: With the ability to handle over 2000 transactions per second, TRON is faster and more scalable than many other popular blockchains.</li><li><strong>Low Transaction Fees</strong>: User-friendly transaction fees make TRON an attractive platform for both individuals and organizations.</li><li><strong>Expanding dApp Ecosystem</strong>: TRON hosts a variety of dApps, including those for gaming, finance, and more. These dApps enable users to conduct financial transactions, play games, and much more in a decentralized manner.</li></ul><p><strong>Popular Tokens Used on the TRON Network:</strong></p><ul><li><strong>TRON (TRX)</strong>: The native token of the TRON network, used to pay transaction fees and interact with other tokens on the network.</li><li><strong>USDT-TRON</strong>: The TRON-based version of Tether, a stablecoin pegged to the US Dollar.</li><li><strong>BTT (BitTorrent Token)</strong>: Used within the BitTorrent ecosystem for file sharing and content distribution.</li></ul><h3>TRC-20 Token Standard</h3><p>Like other smart contract platforms such as Ethereum and Binance Smart Chain, TRON supports multiple token standards, including TRC-10, TRC-20, and TRC-721 (non-fungible tokens).</p><p>TRC-20 is a token standard on the TRON network. This standard is necessary for creating and managing tokens on the TRON blockchain. TRC-20 is similar to Ethereum’s ERC-20 standard but leverages the advantages of the TRON network. TRC-20 tokens enable secure and transparent transactions through smart contracts.</p><h3><strong>Differences Between TRC-20 and ERC-20</strong></h3><ol><li><strong>Blockchain and Infrastructure</strong>: TRC-20 tokens operate on the TRON network, while ERC-20 tokens run on the Ethereum network. TRON offers faster transaction times and lower fees compared to Ethereum.</li><li><strong>Transaction Speed</strong>: The TRON network can process over 2000 transactions per second, whereas the Ethereum network has a lower transaction speed. This allows TRON to offer faster transaction times.</li><li><strong>Transaction Fees</strong>: The TRON network is known for its low transaction fees, reducing costs for users and developers. In contrast, Ethereum network fees can sometimes be high.</li></ol><h3>How to Determine if Your USDT is ERC-20 or TRC-20</h3><p>Your wallet can usually indicate whether your USDT is ERC-20 or TRC-20. If you use a wallet that supports USDT, you will typically see the name and symbol of your USDT. Additionally, you can check the token’s contract address in the wallet to verify the type. If the address starts with “0x,” it is an ERC-20 token. If the address starts with “T,” it is a TRC-20 token.</p><h3>Conclusion</h3><p>TRON holds significant potential for the future of decentralized internet. Continuously evolving and updating, the platform is poised to attract more users and dApps, accelerating the adoption of blockchain technology.</p><p>TRON stands out as a robust and evolving blockchain platform, known for its fast and cheap transactions, expanding dApp ecosystem, and strong community. With its potential to play a crucial role in the adoption of a decentralized internet, TRON is expected to continue growing and offering innovative solutions in the coming years.</p><img src="https://medium.com/_/stat?event=post.clientViewed&referrerSource=full_rss&postId=b5da934d0bf5" width="1" height="1" alt="">

What is the TRON Network?

<figure><img alt="" src="https://cdn-images-1.medium.com/max/1024/1*xEmH0dZxWYA4VtbInNs0og.png" /></figure><p>The world of cryptocurrencies has emerged in recent years as a new asset class that provides an alternative to traditional financial systems, both as a store of value and a method of payment. This transformation has highlighted the importance of the concept of tokenomics. Tokenomics refers to the economic aspects of a cryptocurrency or blockchain project, focusing particularly on the design and distribution of native digital tokens. The term is a combination of “token” and “economics” and is crucial for understanding how a token will gain value and sustain an economy.</p><h3>Key Elements of Tokenomics:</h3><p><strong>Total Supply</strong>: The maximum number of tokens that can be produced. The project’s founders determine this number and it is usually fixed.</p><p><strong>Initial Supply</strong>: The amount of tokens issued during the initial public offering. These tokens can be used for project development and marketing or sold to investors.</p><p><strong>Circulating Supply</strong>: The total number of tokens currently available in the market. This number can fluctuate over time due to factors like token burning or the creation of new tokens.</p><p><strong>Distribution</strong>: The method by which tokens are allocated. Tokens can be distributed in various ways, such as:</p><ul><li><strong>Pre-Sale</strong>: Tokens are sold to investors before the public offering.</li><li><strong>Mining</strong>: Tokens are earned by creating new blocks in the blockchain network.</li><li><strong>Airdrop</strong>: Tokens are distributed for free.</li><li><strong>Governance</strong>: Tokens are earned in exchange for participating in project governance.</li></ul><p><strong>Use Cases</strong>: The areas and functions for which tokens are used. Tokens can serve various purposes, such as:</p><ul><li><strong>Transaction Fees</strong>: Tokens can be used to pay transaction fees on the blockchain network.</li><li><strong>Governance Rights</strong>: Tokens can grant the right to participate in project governance and voting.</li><li><strong>Incentives</strong>: Tokens can be used to incentivize users to engage in certain behaviours.</li></ul><p><strong>Economic Model</strong>: The mechanisms related to how tokens will maintain and increase in value. These mechanisms can include:</p><ul><li><strong>Burning</strong>: The destruction of a portion of the circulating tokens.</li><li><strong>Staking</strong>: Locking tokens for a specified period in exchange for rewards.</li><li><strong>Inflation Rate</strong>: The rate at which new tokens are produced.</li></ul><h3>Importance of Tokenomics:</h3><ul><li><strong>For Investors</strong>: Understanding tokenomics before investing in a token is crucial for assessing the project’s potential and risks. Tokenomics helps determine how the token’s value may change over time and the likelihood of the project’s long-term success.</li><li><strong>For Developers</strong>: Tokenomics is used to create a robust economic model that ensures the value and sustainability of the tokens. Well-designed tokenomics can attract investors, reward users, and ensure the long-term success of the project.</li><li><strong>For Users</strong>: Tokenomics helps users understand how tokens will be used and what benefits they will provide. By understanding tokenomics, users can utilize their tokens more effectively and contribute more to the project.</li></ul><h3>Conclusion:</h3><p>Tokenomics is vital for the success of cryptocurrency projects. A well-designed tokenomics model is essential for attracting investors, incentivizing users, and ensuring the long-term sustainability of the project. Anyone looking to succeed in the world of cryptocurrencies must understand and evaluate the fundamental principles of tokenomics. Tokenomics shapes not only the value of a crypto asset but also the success of the project behind it.</p><img src="https://medium.com/_/stat?event=post.clientViewed&referrerSource=full_rss&postId=c5c7cab8efe2" width="1" height="1" alt="">

Understanding Tokenomics: The Economics Behind Cryptocurrencies

<figure><img alt="" src="https://cdn-images-1.medium.com/max/1024/1*C1EMDWsWq5vJdk0jMrh4JA.png" /></figure><h3>What is Liquidity?</h3><p>Liquidity refers to the ability of an asset to be quickly and easily bought or sold in the market. In financial markets, liquidity is crucial for stability and confidence. A highly liquid asset is more attractive to investors because it can be readily exchanged for cash or other assets at any given time.</p><h3>What is Crypto Liquidity?</h3><p>Crypto liquidity refers to the ability of a cryptocurrency to be quickly and easily exchanged for fiat currency or other cryptocurrencies. Liquidity in crypto markets is influenced by various factors such as trading volume, market depth, and the number of active investors.</p><h3>Differences Between Liquidity in Traditional Currencies and Cryptocurrencies:</h3><ul><li><strong>Decentralisation:</strong> Traditional currencies are controlled by central banks, while cryptocurrencies are decentralised and not governed by any authority. This decentralisation can impact crypto liquidity.</li><li><strong>Volatility:</strong> Cryptocurrencies are more volatile compared to traditional currencies. This means higher price fluctuations, which can negatively affect liquidity.</li><li><strong>Accessibility:</strong> Cryptocurrencies may be less accessible than traditional currencies, potentially limiting the number of investors and negatively impacting liquidity.</li></ul><h3>Factors Affecting Crypto Liquidity:</h3><ul><li><strong>Trading Volume:</strong> The higher the trading volume of a cryptocurrency, the higher its liquidity.</li><li><strong>Market Depth:</strong> Market depth shows the number of buyers and sellers at different price levels. A cryptocurrency with high market depth has high liquidity.</li><li><strong>Number of Active Investors:</strong> The more active investors a cryptocurrency has, the higher its liquidity.</li><li><strong>Volatility:</strong> Cryptocurrencies with high volatility tend to have lower liquidity.</li><li><strong>Regulations:</strong> Regulations governing the crypto market can affect liquidity.</li><li><strong>Technology:</strong> The development of crypto exchanges and infrastructure can positively impact liquidity.</li></ul><h3>Crypto Liquidity Data:</h3><p>According to CoinMarketCap data:</p><ul><li><strong>Bitcoin (BTC)</strong> is the most liquid cryptocurrency in terms of 24-hour trading volume.</li><li><strong>Ethereum (ETH)</strong> is the second most liquid cryptocurrency.</li><li><strong>Tether (USDT)</strong> is the third most liquid cryptocurrency.</li></ul><p>Crypto liquidity is crucial for the development and adoption of cryptocurrency markets. Investors prefer to trade in a liquid market. Therefore, efforts should be made to increase crypto liquidity. Technological advancements, clear regulations, and increased investor interest will contribute to the rise in crypto liquidity.</p><img src="https://medium.com/_/stat?event=post.clientViewed&referrerSource=full_rss&postId=cc9e5b17e28d" width="1" height="1" alt="">

Liquidity in the Crypto World: A Detailed Analysis

<figure><img alt="" src="https://cdn-images-1.medium.com/max/1024/1*lPAZms2FP6KwoyyozC9H1A.png" /></figure><p>May has consistently been a pivotal month for the crypto and blockchain industry, marked by significant events and developments that have shaped the landscape of this ever-evolving field. From groundbreaking transactions and technological advancements to regulatory milestones, each year in May has brought crucial moments for the crypto community.</p><h4>2010:</h4><ul><li>Bitcoin’s First Pizza Purchase: In May 2010, Laszlo Hanyecz purchased two Papa John’s pizzas for 10,000 Bitcoin, marking the first real-world transaction using Bitcoin. This event is considered a significant milestone demonstrating Bitcoin’s use and potential.</li></ul><h4>2011:</h4><ul><li>Bitcoin Surpasses $1: In May 2011, Bitcoin’s price exceeded the $1 mark for the first time, signifying increased interest and confidence in Bitcoin.</li></ul><h4>2013:</h4><ul><li>Silk Road Shutdown: In May 2013, the FBI shut down Silk Road, an online marketplace used for money laundering and drug trafficking. This event raised concerns about Bitcoin’s use in illegal activities and caused a downturn in the crypto markets.</li></ul><h4>2015:</h4><ul><li>Ethereum Mainnet Launch: In May 2015, the Ethereum mainnet was launched, enabling the development of smart contracts and decentralized applications. This development expanded the use cases of blockchain technology and paved the way for innovative applications in the crypto space.</li></ul><h4>2017:</h4><ul><li>Bitcoin Surpasses $2,000: In May 2017, Bitcoin’s price surged past the $2,000 mark, signalling the beginning of a bull run in the crypto markets.</li></ul><h4>2018:</h4><ul><li>Bitcoin Drops to $7,000: In May 2018, Bitcoin’s price fell to $7,000 following the significant rise in 2017, marking the start of a bear market in the crypto space.</li></ul><h4>2019:</h4><ul><li>Facebook Announces Libra: In May 2019, Facebook announced its cryptocurrency project, Libra. The project aimed to create a global payment system and reach Facebook’s over 2 billion users. However, regulatory pushback led to the project’s cancellation in 2020, stalling Facebook’s foray into cryptocurrency.</li></ul><h4>2020:</h4><ul><li>DeFi Sector Development: In May 2020, the decentralized finance (DeFi) sector began to gain traction. DeFi platforms offer financial services like lending, borrowing, and investing without the need for a central authority, challenging the traditional financial system.</li></ul><h4>2021:</h4><ul><li>Tesla Starts Accepting Bitcoin: In May 2021, Tesla, led by Elon Musk, started accepting Bitcoin as a payment method, marking a significant milestone for Bitcoin’s adoption by institutional investors.</li></ul><h4>2022:</h4><ul><li>TerraUSD (UST) Collapse: In May 2022, the TerraUSD stablecoin, pegged to the US dollar, collapsed, raising concerns about the security of stablecoins and triggering a crisis of confidence in the crypto markets.</li></ul><h4>2023:</h4><ul><li>Bitcoin Falls to $30,000: Factors such as Federal Reserve rate hikes and the TerraUSD collapse caused Bitcoin’s price to drop to $30,000 in May 2023.</li><li>First Bitcoin Spot ETF Launched: VanEck launched the Bitcoin Strategy ETF (XBTF), the first spot ETF for Bitcoin in the US, signaling growing institutional interest in Bitcoin.</li></ul><h4>2024:</h4><ul><li>Crypto Markets Surge: In May 2024, the crypto markets experienced a significant surge, with Bitcoin surpassing $70,000 and other cryptocurrencies like Ethereum and Solana also gaining value.</li><li>EU Adopts MiCA Regulation: The European Union adopted the Markets in Crypto-Assets (MiCA) regulation to govern and supervise crypto assets, marking a significant step for the development of crypto markets in Europe.</li><li>El Salvador Drops Bitcoin as Legal Tender: Despite adopting Bitcoin as legal tender in 2023, El Salvador decided to discontinue this practice in 2024, raising concerns about Bitcoin’s use as an official currency.</li><li>Continued Development of CBDCs: Many central banks continued to develop their digital currencies (CBDCs), and their impact on the crypto markets remains a topic of interest.</li><li>Ethereum ETF Approved: In May 2024, the US Securities and Exchange Commission (SEC) approved the first spot Ethereum ETF, making it easier for both institutional and individual investors to gain exposure to Ethereum, potentially increasing its adoption and market liquidity.</li></ul><p><em>Note: These updates are current as of May 2024.</em></p><img src="https://medium.com/_/stat?event=post.clientViewed&referrerSource=full_rss&postId=ae97487d109d" width="1" height="1" alt="">

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Blogues

What is DeFi?

What is the TRON Network?

Understanding Tokenomics: The Economics Behind Cryptocurrencies

Liquidity in the Crypto World: A Detailed Analysis

Important Events and Developments in the Crypto and Blockchain Field in May Since 2010