Similar to the offers you get from traditional financial institutions, deentralized finance (DeFi) has quite a number of products and services. From peer-to-peer exchange to lending and borrowing, insurance, and deriavatives, this lesson introduces you to some of the most popular DeFi products and services.

Decentralized Exchanges (DEXs) 

Forget about Coinbase and Binance. DEXs like Uniswap, SushiSwap, and PancakeSwap allow you to trade cryptocurrencies directly with other users, without needing a centralized exchange to hold your funds. They use Automated Market Makers (AMMs) to facilitate seamless, instant swaps. The best part of DEXs is that you retain custody of your assets throughout the entire process.

Lending & Borrowing Protocols 

Borrowing money from banks is hard. But crypto platforms like Aave and Compound allow you to lend out your crypto assets to earn interest, or borrow crypto by putting up collateral. There are no credit checks, no lengthy applications, and interest rates are often determined by supply and demand, updated in real-time. It's permissionless banking, available 24/7.

Stablecoins

While many cryptocurrencies swing wildly in value, stablecoins are designed to maintain a stable price, usually pegged to a fiat currency like the US dollar. Stablecoins like USDT, USDC, and DAI are the bedrock of DeFi, providing a safe haven for value. They make it easier to transact and earn yields without constant price risk.

Yield Farming & Staking

Yield farming and staking are similar to putting your money in fixed deposit or high-interest accounts. It’s putting your money to work in crypto. Users provide liquidity to DEXs or stake their tokens to secure a Proof-of-Stake blockchain, earning rewards in return. Yield farmers move their assets between different protocols to chase the highest returns, creating a dynamic and competitive landscape for liquidity.

DeFi Insurance

With innovation comes risk. DeFi insurance protocols like Nexus Mutual offer decentralized coverage against smart contract exploits or protocol failures. Users contribute to a pool, and if a verified hack occurs, claims are assessed and paid out by the community, not a traditional insurance company.

Decentralized Derivatives & Synthetic Assets 

Advanced DeFi platforms are now creating synthetic assets that mirror the value of real-world assets like stocks, commodities, fiat currencies, and traditional financial derivatives. This allows users to gain exposure to these markets on the blockchain, without actually holding the underlying asset or going through traditional brokers.