Today's keywords:
1. Liquidity
👉Liquidity is the ability to buy or sell an asset without significantly changing its value.
For example:
High liquidity: You can easily buy and sell Bitcoin without significantly affecting its price, as Bitcoin has many traders and is easily convertible to cash.
Low liquidity: If you want to buy a coin that is traded by very few people, like a new altcoin, then when buying in large quantities, the price of that coin will increase because there are few sellers, so the market cannot meet your demand.
2. DeFi (Decentralized Finance)
👉DeFi is a financial ecosystem operating on the blockchain, allowing you to borrow, lend, and trade without needing banks or intermediaries.
For example:
Borrowing money from DeFi: You can deposit crypto into a smart contract on DeFi to borrow money without needing a bank. The automated system will manage and execute transactions without a third party.
Compared to banks: Instead of having to go to a bank, open an account, and wait a long time, DeFi allows you to borrow money instantly and from anywhere in the world.
3. Token
👉Tokens are units of currency or assets created on the blockchain, which can be used to represent different values such as access to services, shares in a project, or even physical assets.
For example:
In-game tokens: A blockchain game may issue its own tokens (e.g., AXS in Axie Infinity). You can use these tokens to purchase in-game items or exchange them with others.
Voting rights tokens: A project may issue tokens that allow holders to participate in important decisions of the project. For example, each token you own allows you to vote on the direction of the project's development.
4. Staking
👉Staking is the process of holding a certain amount of cryptocurrency in your wallet to support the blockchain network and earn rewards.
For example:
Staking Ethereum: You deposit 10 ETH into a staking wallet and help validate transactions on the Ethereum 2.0 network. In return, you receive a small amount of ETH as a reward over time.
Rewards from staking: When you stake, you not only hold money but also help make the network more secure. In return, you receive tokens or profits from staking, similar to depositing money into savings and earning interest.
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