How can you use DeFi protocols to create financial services in Ethereum?

1 Lending and borrowing

One of the most common DeFi services is lending and borrowing, which allows you to earn interest on your crypto assets or borrow them for other purposes. Lending and borrowing protocols use smart contracts to pool funds from lenders and allocate them to borrowers based on supply and demand. Some of the most popular lending and borrowing protocols are Compound, Aave, and Maker. To use these protocols, you need to connect your Ethereum wallet, such as Metamask, to their web interfaces and approve the transactions. You can then deposit your assets as collateral, borrow other assets, or withdraw your funds at any time.

2 Trading and swapping

Another common DeFi service is trading and swapping, which allows you to exchange one crypto asset for another without intermediaries or centralized exchanges. Trading and swapping protocols use smart contracts to create liquidity pools, which are collections of assets that users can trade with each other. Some of the most popular trading and swapping protocols are Uniswap, Sushiswap, and Balancer. To use these protocols, you need to connect your Ethereum wallet to their web interfaces and approve the transactions. You can then select the assets you want to trade, specify the amount and the price, and execute the swap. You can also provide liquidity to the pools and earn fees from the trades.

3 Investing and earning

Another common DeFi service is investing and earning, which allows you to grow your crypto assets by participating in various strategies and opportunities. Investing and earning protocols use smart contracts to automate the process of finding the best yields, optimizing the risks and rewards, and compounding the returns. Some of the most popular investing and earning protocols are Yearn, Curve, and Harvest. To use these protocols, you need to connect your Ethereum wallet to their web interfaces and approve the transactions. You can then choose the asset you want to invest, select the strategy you want to follow, and deposit your funds. You can also withdraw your funds at any time.

4 Creating and governing

Another common DeFi service is creating and governing, which allows you to launch your own financial applications and protocols and manage them with the community. Creating and governing protocols use smart contracts to enable anyone to create their own tokens, platforms, and rules, and to vote on proposals and decisions. Some of the most popular creating and governing protocols are Aragon, DAOstack, and Moloch. To use these protocols, you need to connect your Ethereum wallet to their web interfaces and approve the transactions. You can then create your own organization, define its purpose and parameters, and invite members. You can also join existing organizations and participate in their governance.

5 Exploring and learning

The last DeFi service is exploring and learning, which allows you to discover new projects and concepts and learn more about them. Exploring and learning protocols use smart contracts to provide information, education, and analysis on the DeFi ecosystem and its components. Some of the most popular exploring and learning protocols are Zapper, DeFi Pulse, and EthHub. To use these protocols, you do not need to connect your Ethereum wallet, but you can use it to track your portfolio and activity. You can then browse the different categories, metrics, and resources, and learn more about the DeFi space and its opportunities.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?