🫧 Ethereum (ETH) is currently the second largest cryptocurrency by market capitalization. Vitalik publicly unveiled the idea of Ethereum in 2014 and completed the genesis block of Ethereum in 2015. To some extent, Ethereum is a logical extension of Bitcoin applications. This is because Ethereum supports smart contracts, which are codes on the blockchain that can not only control assets and data but also define the interactions of assets, data, and network participants. Due to the existence of smart contracts, Ethereum has become a smart contract platform.
✨ Ethereum and other smart contract platforms have facilitated the birth of decentralized applications (dApps). These applications are written using interoperable and transparent smart contracts, and as long as the blockchain exists, the smart contracts will not change. dApps allow participants to communicate directly without a company acting as a settlement center for application interactions. The development of dApps is very rapid, with the first batch of "killer" dApps emerging in the financial sector.
🫧 The evolution of financial dApps has become the DeFi movement. The goal of DeFi is to combine open-source financial tools to build more complex products, providing a smoother experience and maximizing value for users. Overall, whether a user has $100 or $100 million, the cost of consumption has not increased. DeFi supporters believe that all financial infrastructure should be replaced with smart contracts, which can provide more value to more people. Anyone who pays a small fee can benefit from DeFi innovations.
🍀 DeFi is essentially a competitive market for financial dApps, which play different financial roles such as exchanges, lenders, and tokenization. The combination and reorganization of DeFi products can continuously expand the trading network, attracting more participants to the DeFi network. As the traditional financial system gradually shrinks, the DeFi network becomes broader, creating a flywheel effect.