In this episode, Nick Saponaro interviews Corey Caplan, and both talk about DeFi (Decentralized Finance) and the Defi Money Market. It has become a trending and popular topic in the crypto world in 2020.
What Is DeFi?
DeFi gives you the financial resources without having to go through the process similar to traditional financing. You don’t have to ask for permission or go through borders to gain access to financial resources. Humans do not run DeFi. Instead, it’s run by automated systems and smart contracts that are responsible for making deterministic decisions.
Is DeFi Seen As A Solution Or A Way To Improve The Economy?
Absolutely. DeFi lets its client operate on a heavily borderless and permissionless platform. It also keeps a record of the essential information such as how money is kept, why it was deposited, and where the program keeps it. This traceable feature makes DeFi is 100% transparent, which, overall, is a powerful tool for everyone, be it businessmen, regulators, or everyday participants because they get to be involved. Being involved gives them more knowledge and information, and these clients become intelligent when making decisions along the way.
An Overview Of DeFi Money Market
The DeFi Money Market is a way for currency crypto holders (Etherium digital asset holders) to earn interest. In turn, the interest is backed by income-generating assets that are viewable on the chain. Clients no longer have to deposit their crypto on a black box wherein they have no idea about how interest starts generating or their funds can get locked up. With DeFi Money Market, your funds get deposited to a smart contract, and you receive transparency and traceability in everything you do.
What Are M Tokens?
Corey talks about M tokens, which are representative of your balance in a protocol. These M tokens are very similar to C tokens in Compound, and it allows you to redeem the original amount of balance plus the interest rate. These tokens can interact with the rest of the DeFi ecosystem, and you can trade them in non-decentralized exchanges as well.
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