How does Opyn work? Opyn allows users to hedge against the risk of price fluctuations, smart contract exploits, administration/governance risks, and black swan events. For instance, Opyn allows users to buy put options on ETH and WBTC.

A wallet is a user-friendly interface to the blockchain network. It manages your private keys, which are basically keys to the lock on your cryptocurrencies’ vault. Wallets allow you to receive, store and send cryptocurrencies.

Prices of assets in the pool are algorithmically determined using the Automated Market Maker (AMM) algorithm. AMM works by maintaining a Constant Product based on the amount of liquidity on both sides of the pool. Let’s continue the ETH-DAI liquidity pool example, using 100 ETH and 20,000 DAI. To calculate the Constant Product, Uniswap will

A derivative is a contract whose value is derived from another underlying asset such as stocks, commodities, currencies, indexes, bonds, or interest rates. Each type of derivative, whether futures, options or swaps serves a different purpose, and each investor buys or sells them for various reasons.

What happens is that you will mint or ‘borrow’ DAI via the Maker platform by putting your Ether (ETH) as collateral. You will have to repay your ‘loan’ along with the ‘loan interest’ which is the stability fee when you want to redeem your ETH at the end of your loan.

Limited features Centralized exchanges include many advanced trading features such as limit orders, stop-loss orders, trailing stops, and so on. Most of these trading features are not available on DEXs.

Decentralized Finance or DeFi is the movement that allows users to utilize financial services such as borrowing, lending, and trading without the need to rely on centralized entities. These financial services are provided via Decentralized Applications (Dapps), the majority of which are deployed on the Ethereum platform

Stability Fee It is equivalent to the ‘interest rate’ which you are required to pay along with the principal debt of the vault. The stability fee for each Vault type changes as a result of the decisions of MKR token holders who govern the protocol. These decisions are based on the recommendation of Maker’s internal risk teams who perform risk

Before we push on, let’s have a quick recap on some of the things DeFi allows us to achieve: Transparency: A transparent, auditable financial ecosystem. Accessibility: Free access to DeFi applications without fear of discrimination on race, gender, beliefs, nationality, or geographical status. Efficiency: Programmable money makes it possible to