Demystifying DeFi

What is Decentralized Finance (DeFi)?

DeFi or Decentralized Finance refers to a host of financial applications built on top of blockchain networks. It is a step towards truly creating an open-source, permission-less and transparent financial service ecosystem that anyone and everyone can use without a central authority. The end users would have full authority and control over their assets and interact using DAPPS (Decentralized applications). DeFi’s biggest allure is the true democratization of financial services, especially for the unbanked.

Its main tenets are that it is:

  • permissionless
  • censorship-resistant
  • final and fluid
  • programmable

DeFi apps rely on stable coins and digital assets, like DAI or USDC and Ethereum. DeFi’s main improvement on FinTech is that it brings the same concept of Lego blocks to financial applications, giving them the moniker of Money Legos. In other words, the DeFi ecosystem makes it possible to take out a loan on one platform, perform a leveraged trade on another, and exchange it back to the base asset through a decentralized, blockchain-enabled exchange. As a result, composability enables DeFi to have a wide range of use-cases where it outperforms its traditional counterparts. The composability feature enables stacked functioning, and refers to the ability to re-connect different applications built on blockchains, like Ethereum.

Advantages of DeFi

Traditional finance relies on institutions such as banks to act as intermediaries, and courts to provide arbitration. 

“The biggest advantages of DeFi is that its permissionless to participate (no KYC, credit score, etc.), same rules apply to everyone, liquidity is ’borderless’ (you can access the market from anywhere & anytime as long as you have internet), and it’s non-custodial so you have full control over your money and you can use it however you want.”

  1. Smart contracts specifies how the platform functions and manages disputes. The use of smart contracts ensures that DeFi solutions are low cost and easy to use.
  2. Built on blockchain, it embodies all the benefits of blockchain networks including elimination of a centralized point of failure.
  3. Because DeFi is an open ecosystem, it’s access is easy for individuals such as low income communities, who under normal situations would not have access to financial services because it doesn’t benefit the intermediaries.

Risks involved in DeFi

The greatest security risks which DeFi industry must deal with are:

  • Lack of data – Data collection methods in DeFi are still being developed, but the nature and complexity of available data has increased significantly in recent years.
  • Requirement for monitoring transactions – DeFi applications need more comprehensive checks to ensure transfers to the right addresses.
  • Compliance issues – The DeFi ecosystem needs regulatory bodies to provide greater support in case of price slippages and regulatory scrutiny. Organizations are emerging to provide better earlier support and one click regulatory solutions.
  • System Failure – Since the DeFi ecosystem is not fully established, users need to minimize the risk of potential failure. The last step towards this goal is the financialization of risks through insurances and verified smart contracts.
  • Hacking – Since DeFi projects have proven to be successful hacking targets, the DeFi industry is developing sandboxes and clear frameworks for dispute resolution.
  • Asset price information – By auditing smart contracts, the DeFi industry is trying to provide ways to detect and solve bugs quickly.

Difference between DeFi and open banking

Open banking refers to a banking system where third-party financial service providers are given secure access to financial data through APIs. This enables the networking of accounts and data between banks and non-bank financial institutions. Essentially, it allows new types of products and services within the traditional financial system. 

DeFi, however, proposes an entirely new financial system that is independent of the current infrastructure. DeFi is sometimes also referred to as open finance. For example, open banking could allow the management of all traditional financial instruments in one application by drawing data from several banks and institutions securely. Decentralized Finance, on the other hand, could allow the management of entirely new financial instruments and new ways of interacting with them.

Decentralization is not a universal answer to all problems. It is important to identify use-cases that would benefit from the tenets of blockchain.

Potential use cases for DeFi

1. Trading

Decentralized exchanges are variations of traditional exchanges. The difference is that decentralized exchanges do not require complete custody of an asset – the original owner can maintain custody. Orders are settled directly between wallets in a matter of minutes which means the traded cryptocurrency will be in the user’s wallet without the need to first transfer the assets to the exchange. The upside of this is that unlike certain centralized exchanges, decentralized exchange users are less vulnerable to losing their funds due to a hack or the exchange vanishing with their money. However, that does not mean they are entirely fool proof, as faulty pricing data have caused losses for users.

2. Lending & Borrowing

DeFi allows users to lend and borrow directly, removing a banking intermediary from the entire chain. Balance verifications are based on a blockchain, assets are transferred to a smart contract, and interest rates are deducted without human intervention once the conditions are set.

Loans in DeFi are typically used by margin traders, who give their cryptocurrencies as a collateral. As long as they are able to pay the interest rate and maintain the collateral requirements of a loan, they do not have to rely on a third party to have access to a lending facility.

Non custodial lending has now been made available through collaborations with wallet providers. Over time, other digital assets like IP rights or digital art, could also be used as a lending instrument. The high demand for digital lending today makes the yield or return on investment for individuals leaving their deposits in DeFi platforms – considerably higher than the interest offered by traditional banks, but not without some extra risks

3. International Remittance

Stablecoin based payments have handled over $220 billion worth of assets on blockchain. According to the World Bank, global remittance volume for 2018 was around 620 billion. Stablecoin based payment adoption will enable businesses and individuals alike to receive money from anywhere in the world in under ten minutes for a fraction of the cost of traditional payment relays.

4. Provenance & Ownership

Verifying the source of a document or ensuring a claim of ownership over a digital asset is hard in legacy markets, largely due to their centralized systems. The mutable nature, which means they can be retrospectively changed, of traditional documents, make them easy to forge and, more importantly, difficult to verify. Blockchains offer an alternative to this with Non-Fungible Tokens (NFT) and fractional ownership. Non-fungible tokens are tokens that cannot be divided into smaller fractions or reproduced. They. are used to represent tickets, gaming passes, or even in-game art. The token itself represents ownership of the asset. Fractional ownership makes it possible for individuals to own a smaller portion of very costly assets. This is common in the case of vintage cars, highly prized real estate, and artwork. The asset ownership is proven by individuals or agencies through regional attestation bodies, then issue tokens that represent part-ownership of the asset. Individuals can then trade the fractional tokens with one another os the perceived value of the asset changes. Regulations around this are not entirely clear yet.

What is the difference between 7D, 6D, 5D, 4D and 3D Holography / Holograms?


The simple answer – MARKETING!

It has no realistic meaning. It is simply meant to get the attention of the soon-to-be-perplexed. All marketing, little to no substance.

Each dimension is a way of seeing or sensing something.

1D  (one dimensional) is mostly a theoretical idea or the domain of the very small world of quantum mechanics.  Everything we can see has 2 dimensions. Even a very very thin long line has at least some width.

2D a flat representation of a scene or object.  its size can be described as height and width. Like a square, picture  or image on a standard TV.

3D a recreation of an object or scene in three dimensions.  So height, width and depth like a cube or sphere. We have two eyes so we have great depth perception and experience the world in 3D

4D is basically 3D plus movement over time. So Time is the fourth dimension

5D and above are not viewable or detectable by us in our Universe. These extra dimensions are the playground of fiction authors and theoretical physicists.

String theory predicts our block of 4 dimensions are only a small group of a much larger group of dimensions.  This does not mean that there are perfectly formed replicas of the universe we can detect with alternate versions of us and different histories played out.  If there are multiple dimensions outside of our own and we could never interact with them in any way then they might as well be not there as far as we are concerned on a daily basis.  Of course we are a curious lot and we can’t stand being told no, so lots of theoretical scientists, authors and BS artisans are actively exploring the possibilities of the extra D’s. Each dimension is a way of seeing or sensing something.

4D , 5D, 6D are mostly marketing terms for tech that cannot sell on its own merits.

So the next time you go looking around for 7D holograms, please read this first.

With Places (and your help), Waze mapping gets smarter on Android and iOS


Taking the same crowd-sourcing approach it applied to traffic, the Waze mobile app is going to improve the quality of information about local businesses and residences. It will need help from its users, though, and that’s where the new Places feature comes into play.

The latest version of Waze, which is owned by [company]Google[/company], lets people update or add information about the places they visit. The company did much the same when it debuted, sharing user-submitted data about traffic on the roads. With Places, it’s the same recipe, only applied to locations. The idea is that if everyone adds details about the places they visit, the whole community benefits. Of course, that user-submitted data will also make a fine addition to Google Maps as Google bought Waze last year for a reported $1 billion.

The Places feature supports user-submitted photos of places and editing or addition of details including…

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Dropbox vs A Detailed Product Review

Copy is a new cloud backup service that is at start looks like a Dropbox clone but once you compare its offering you come to realize it is actually better in many ways. It was recently launched by Barracuda Networks, a large provider of security, data protection and backup solutions and is starting to spread among geeks and early adopters.

The idea of both services is the same – once you install their app for PC or Mac, you get a folder on your computer that is always synced to the cloud. Any folder or file that you move into that folder gets automatically synced to the cloud. This allows you to backup files, sync files between computers (your personal & home computer for example), between your computer & smartphone and also share files with others which is extremely useful when working as a team and having a need to constantly share files with each other without the hassle of emailing files as attachment.

Dropbox has been around for a while, it has millions of users and has created a fantastic service that I have been using for several years. So how can Copy succeed in such a competitive space? The answer is very simple – Copy is giving away plenty of free storage space for new signups – 15GB (vs. 2GB you get in Dropbox). In addition, for anyone that you refer to the service, both of you will earn an extra 5 GBs for completed referrals and there is no limit to the number of people you can refer.

Interested? Click this link to signup & get 20GB free space – 15GB plus 5GB since I will be your referrer.

After you are done signing up, make sure to:

  1. Verify your email address
  2. Download and install the Copy app (for PC/Mac)

Only after completing these two steps you wil get the 5GB bonus.

By the way, you can also signup as a regular user without a referrer and not get any bonus.

Although the services are very similar, there are still some pros and cons for Copy compared to Dropbox.

– Free account size: 15GB vs. 2GB in the case of Dropbox. Initially Copy started with 5GB but as soon as Google announced that Google Drive free space will be 15GB, Copy rushed to match it.
– Referral program: Copy gives 5GB for both you and the friend you refer with no limit. Dropbox however, gives 500MB to you but nothing to your friend and it limits the bonus amount to 16GB (32 friends).
– Fair Storage for all – instead of counting data in shared folders against all members’ individual storage quotas so everyone pays for the same data over and over, Copy allows users to “split the bill” and control which files count against their storage capacity.
– Sharing a folder over the internet is more secured. In dropbox, when you share a link, you have no control if the link is being emailed to someone else. With copy, you can enter a specific user’s Copy username (an email address) and that would restrict access to the shared folder.
– Beautiful web interface that is much easier for viewing files on the web
– For mobile designers Copy is better for viewing a screenshot on an iPad. The image quality is better since Copy does not compress it like Dropbox and it also displays the screenshot in full view (without the iPad’s status bar)
– Quicker sharing – you can share a link to a file from the app rather than being redirected to the website and sharing from there like Dropbox does
– Caching – Copy allows caching of whole folders on mobile devices
– Copy allows easy access to old versions of a file straight from a file’s contextual menu


– Upload speed – Dropbox seems to provide a faster upload time than Copy

– There is no live preview of video files in the web interface

Bottom line – Copy has done a fantastic job in launching a well designed, feature rich product that supports all platforms (Win, Mac, Linux) and Smartphones (iOS, Android). I’ve been using it for several weeks not and have not experienced any glitches or outages. Highly recommended!

Click here to signup for free and get your 20GB free space.

Is an MVP necessary?

Most often the list of features and capabilities that your product needs to satisfy the needs of your target market and it is huge. When the number of hours to implement everything is well beyond your financial runway or your market opportunity window, how do you pick which features to do first?






Let’s first define a Minimum Viable Product. An MVP is simply the minimum set of features that provide the initial value to the user of your product. It is crucial that this first incarnation of your product must show your value differentiation. In other words, not only must it provide that initial functionality for your first users, it also needs to show off why your product is different or unique in the market place.

For example, a smartphone application may show off the integration between the phone’s native features and your application in such a way that the value of your application is extended through the phone. This is a crucial time in the development of a brand new product. Generally speaking, this early version of the product dictates whether the company succeeds or fails.

a. Validation of market assumptions is critical. Even though some market research has been done, at some point one or more assumptions about the needs of the target market were made. In some cases these assumptions are pivotal – i.e. your business rests on whether these assumptions are correct or incorrect. Getting the MVP into the hands of users as well as demonstrating it to experts in the target market, helps to validate some of the assumptions. Course correction at this stage is easier and less costly than when the product is nearly complete.

b. As these early users work with the MVP, they help you to refine the product in such areas as the flow of a specific feature or the user interface. Early users have a tendency to love new technology. They love the fact that they can influence a product’s direction as well as the look and feel in the early stages – at any stage actually, but especially early on. Regular meetings with early users (even if it is in a coffee shop) are crucial in refining the product but also have a side benefit of building a solid relationship. Word of caution: evaluate each suggestion to make sure that it has wide market applicability; creating a product solely based on the feedback of a handful of users is dangerous.

c. The quest to seek funding for your new venture is a continuous event. The days of receiving funding for an idea jotted down on a napkin are long gone. Having the MVP shows investors what value real users will find in the product. It also helps to get the point of your venture across that a slide presentation cannot do. People respond far better to a real product than to a large slide presentation.

But which features do you select? Which market needs do your satisfy first? This debate will be a constant occurrence within your team. Here are a few key points to remember as you go through the process of deciding what features to build.

a. In the end, your target users will use your product to perform one or more specific tasks. The MVP cannot be a set of random disjointed features, but instead must be a set of features that work seamlessly together and allows the user to accomplish the tasks they need. Imagine the team that developed the first bank machine. They probably implemented the ability for a user to withdraw money first. They in all likelihood recognized that this use case was the most important use case – ahead of transferring money, printing account information, etc. The first implementation of this use case most likely had the ability to insert card and enter the PIN, select the amount to withdraw and from which account, and dispense cash. The key here is to understand how your target users perform their primary task today and make sure that they can perform the same task with your MVP.

b. As mentioned earlier, building in your differentiating value is key. Without this your product will be perceived as simply a “me too” product and will not end up getting the interest of your target users and investors. Continuing with the bank machine example. A key differentiator is convenience – the ability to do banking anywhere and anytime replacing the need to go into the bank and wait in line to get money. One can imagine that early machines were placed in the lobby of the bank or in the nearby convenience store. Had the machines been placed inside the bank, making them accessible only during banking hours, they would not have garnered the enthusiasm of the target users.

In summary, the MVP is crucial from an investor-pitch perspective as well as from a product-refinement perspective. Both these activities are crucial in the early stages of a new venture. The trick is to choose the right set of features for the MVP. Make sure that the user can perform one or more or their end-to-end tasks. In other words, make sure that the use case is implemented enough to provide value to the user. The implication here is that you have to know your target users rather intimately.

And lastly, the MVP must have one or more of your key differentiators. The MVP needs to set what you are doing apart from other potentially competitive offerings.

Image: Jon Radoff’s Internet Wonderland

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