DeFi, DEX, Open Finance

Trinidad and Tobago Decentralised Financing and Decentralised Exchanges

Economic Landscape

Trinidad and Tobago Decentralised Financing is here. The traditional finance market is centralised. Central authorities, like the government and banks, issue fiat currency that drives our economy and is used for every trade and transaction. The power to manage and regulate the flow and supply of such currencies resides in them. We also pass the control of our assets to various financial organizations like banks in expectations of getting higher returns. Those returns are diminishing, with German banks utilizing negative interest rates, the United States printing money constantly and also considering 0 to negative interest. Additionally since all the control and funds are centralized, the risk is also at the center.

What if central bodies decide to print more such currencies to tackle a financial crisis and it backfires? Like we have seen in Venezuela and are seeing in leading countries as well. Central bodies consist of humans and errors can happen in their judgment. Take the case of the Venezuelan government – their poor monetary policies, including printing huge amounts of money amid oil price drop – resulted in inflation exceeding 1,000,000% as per the IMF data. This has destroyed its economic balance.

You stack your money in banks and other financial institutions for savings and often put in fixed and recurring deposits to earn profits. These organizations invest that money in share markets as well as give loans at high-interest rates earning huge profit. But only a small fraction of that is returned to the depositors, i.e. us. With the global inflation rate vacillating around 3%, the actual value of this return becomes even less. So some of us choose to invest.

Now when it comes to investing, you put your trust in financial advisors to advise you on schemes, mutual funds, and share market in exchange for a cut in your return. The return here is more but it’s risky as the advisors can also make mistakes or fail to see market risk. So you receive just a fraction of the money from the investment. 

NYU economist Edward Wolff’s research showcases that the top 1% of households by wealth owned nearly 38% of all stocks. While the top 10% of Americans have investments in stocks over $1,000,000, the next 40% have an average of $100,000, with most of the rest having none. There are people in countries where they don’t even have access to the stock market.

Also, point to note here is we have very little to no say in where our money gets invested and how it is handled by these corporations – meaning there’s a lack of transparency present.

Building a Portfolio

Trinidad and Tobago Decentralised Financing offers you passive income from the safety of your home has long been considered a myth. Money doesn’t grow on trees and nobody will give it to you for free. The same applies to cryptocurrency and blockchain. While these concepts revolutionize the way we perceive financing, it takes hours of research, hard work, constant monitoring and keeping your eyes on all media and social channels in order to properly navigate through gains and losses, while maintaining impeccable risk management.

Years of experience, learning from bull, bear and pandemic markets, CryptoTT has emerged with >90% accuracy rates with our Weekly Pro Bulletin. We have done all the heavy lifting, so you may enjoy passive incomes from the safety of your home. All you need to know now, to access gains and even multiply your main earnings, is – who can you trust to manage your portfolio. 

First, let’s start with what a portfolio is: 

A portfolio is a grouping of financial assets such as coins and tokens. Portfolios are managed by financial professionals and crypto managers. 

A portfolio with CryptoTT gives you access to Bitcoin insights with over 90% accuracy and the ever rising in popularity Decentralised Exchanges, or DEX, which some consider to be the main reason why there is a revival of crypto and a new bull market that is expected to gain momentum in the 4th quarter of 2020 and only grow stronger throughout 2021. 

Decentralised Financing

DeFi is fulfilling the promise of Blockchain for Decentralised Financing. Trinidad and Tobago Decentralised Financing is ensured by CryptoTT. It is what crypto iusers can unite behind, since DeFi At the moment, decentralised exchanges are all based on the ETH (Etherium) blockchain. The assets which are native to the ETH blockchain are called Tokens. Decentralised exchanges, such as Uniswap, allow you to easily buy and sell tokens, which can yield daily gains, if selected and managed properly. 

What are tokens?

Tokens are similar to the money video-game players earn while playing, money they can use to buy gear or weapons. They are also like the rewards you get on a slot machine, before you cash them out. 

But with blockchains, tokens aren’t limited to only one massively multiplayer online money game or a single slot machine maker. They can be earned in one and used in lots of others. They usually represent either ownership in something (like a piece of a Uniswap liquidity pool, which we will address later) or access to some service. For example, in the Brave browser, ads can only be bought using basic attention token (BAT).

Tokens proved to be the big use case for Ethereum, the second-biggest blockchain in the world. The term that should be remembered here is “ERC-20 tokens,” which refers to a software standard that allows token creators to write rules for them. Tokens can be used a few ways. Most commonly, they are used as a form of money within a set of applications. In short – money for the internet.

Governance tokens are different. They are not like a token at a video-game arcade, or a slot machine, as so many tokens were described in the past. They work more like certificates to serve in an ever-changing legislature in that they give holders the right to vote on changes to a protocol.

So on the platform that proved DeFi could fly, MakerDAO, holders of its governance token, MKR, vote almost every week on small changes to parameters that govern how much it costs to borrow, how much savers earn, and so on.

Open Finance

The Decentralized Finance (DeFi) or Open Finance movement takes that promise a step further. Trinidad and Tobago Decentralised Financing through CryptoTT allows you to imagine a global, open alternative to every financial service you use today — savings, loans, trading, insurance and more — accessible to anyone in the world with a smartphone and internet connection.

This is possible on smart contract blockchains, like Ethereum. “Smart contracts” are programs running on the blockchain that can execute automatically when certain conditions are met. These smart contracts enable developers to build far more sophisticated functionality than simply sending and receiving cryptocurrency. These programs are called decentralized apps, or dapps.

Dapp

A dapp as an app that is built on decentralized technology, rather than being built and controlled by a single, centralized entity or company. 

Automated loans negotiated directly between two strangers in different parts of the world, without a bank in the middle might sound futuristic, however many of these dapps are already live today and are being used by thousands of people. There are DeFi dapps that allow you to create stablecoins (cryptocurrency whose value is pegged to the US dollar), lend out money and earn interest on your crypto, take out a loan, exchange one asset for another, go long or short assets, and implement automated, advanced investment strategies.

How are DeFi dapps different from a traditional bank or Wall Street counterparts?

  • The operations of these businesses are not managed by an institution and its employees — instead the rules are written in code (or smart contract). Once the smart contract is deployed to the blockchain, DeFi dapps can run themselves with little to no human intervention (although in practice developers often do maintain the dapps with upgrades or bug fixes).
  • The code is transparent on the blockchain for anyone to audit. This builds a different kind of trust with users, because anyone has the opportunity to understand the contract’s functionality or find bugs. All transaction activity is also public for anyone to view. While this may raise privacy questions, transactions are pseudonymous by default – not tied directly to your real-life identity.
  • Dapps are designed to be global from day one — Whether you’re in Trinidad or in New York, you have access to the same DeFi services and networks. Of course, local regulations may apply but, technically speaking, most DeFi apps are available to anyone with an internet connection.
  • “Permissionless” to create, “permissionless” to participate — anyone can create DeFi apps, and anyone can use them. Unlike finance today, there are no gatekeepers or accounts with lengthy forms. Users interact directly with the smart contracts from their crypto wallets.
  • Flexible user experience — you can use a third party interface, or build your own. Smart contracts are like an open API that anyone can build an app for.
  • Interoperable — new DeFi applications can be built or composed by combining other DeFi products like Lego pieces — e.g. stablecoins, decentralized exchanges, and prediction markets can be combined to form entirely new products.

DeFi is currently one of the fastest growing sectors in crypto. Industry observers measure traction with a unique new metric — “ETH locked in DeFi”. At the time of writing, users have deposited over $4.3 Billion worth of crypto into these smart contracts.

The DeFi Ecosystem and Its Products

Trinidad and Tobago Decentralised Financing gives you access to the various products involved in DeFi are also collectively referred to as open finance since it’s an ecosystem where blockchains, digital assets, open protocols are integrated with conventional financial structures.

DeFi - What in the world is Decentralized Finance? The Most Comprehensive Guide

Image credit https://www.theblockcrypto.com/

Exchanges and Marketplaces

Though many DEXs claim to be decentralized and non-custodial, that may not be the case. So it’s always better to do your own research before using them.

IDEX is the most popular DEX – a dapp on Ethereum blockchain. Other DEXs include Binance DEX, Radar Relay, and EtherDelta. Uniswap, Kyber Network and 0x are other decentralized exchange examples.

Other types of open marketplaces focus on non-fungible tokens (NFTs) exchange. These tokens are often referred to as crypto-collectibles. OpenSea and Rarebits are two such platforms that help the exploration, discovery and buying or selling of such crypto-assets. 

There are also some marketplaces like District0X which even let you create your own marketplaces and vote on governance procedures. 

Ethereum-based P2P marketplaces have outstanding long-term potential. They may cover markets for native digital assets and tokenized real-world assets in the near future.

Ranking by level of Decentralisation

Degree 0 Defi aka CeFi: Centralized Finance (CeFi) products are custodial in nature, use centralized price feeds, and initiate margin calls, provide liquidity for their margin calls, and centrally determine interest rates centrally. 

Examples – BlockFi, SALT, Celsius, Nexo.

Degree 1 DeFi: These categories of DeFi products are non-custodial but use centralized price feeds, initiate margin calls centrally, provide liquidity centrally, centrally determine interest rates, as well as centrally administer updates and platform developments. 

Examples – Dharma.

Degree 2 DeFi: These level 2 DeFi products are non-custodial but have one additional decentralized component from the list while rest are centrally operated. 

Examples – Expo, Nuo, ETHLend.

Degree 3 DeFi: Degree 3 DeFi products are also non-custodial and have permissionless initiation of margin calls and provision of margin call liquidity, while the rest are centrally administered.

Examples – MakerDAO, Compound.

Degree 4 DeFi: What’s different in these types of DeFi products are in addition to being non-custodial, having permissionless margin calls and provision of margin call liquidity, its price feeds are decentralized, while the rest two are centralized.

Examples – dYdX,  Fulcrum.

Degree 5 DeFi: Here, the interest rate determination is decentralized along with the first three components in Degree 4 DeFi, but the control for the platform developments and updates is centralized. 

Examples – bZx.

Degree 6 DeFi: In the last category every component of DeFi should be decentralized. But as of now no DeFi protocol is completely decentralized.

Except for a few like DAI, not all stablecoins are decentralized. They are simply tokens that represent fiat currency deposits held in a bank somewhere. That’s why you can tokenize your asset and move around the blockchain, but the need to redeem and manage the money physically exists. 

Until the law completely adapts to DeFi services, there will always be some form of centralization. For example, take the case of buying a property on the blockchain. Though you can tokenize the deed, the law and the court of that country should recognize that. 

Credit for the Rankings goes to (https://blockgeeks.com)

Uniswap Explained

The most popular decentralised exchange at the moment is Uniswap. Uniswap is an exchange protocol that allows users to trustlessly swap ERC20 tokens. Instead of using the traditional order book model, Uniswap pools tokens into smart contracts and users trade against these liquidity pools. Anyone can swap tokens, add tokens to a pool to earn fees, or list a token on Uniswap.

Trinidad and Tobago Decentralised Financing through CryptoTT can open the door to Uniswap, which is unique in that it doesn’t use an order book to derive the price of an asset. In a centralized exchange the price listed on the exchange is determined by where the highest price someone is willing to pay and the lowest price someone is willing to sell meet. Uniswap uses the Exchange contracts to pool both Ether and an ERC20. When trading Ether for a token, Ether is sent to the contract’s pool and the token is given back to you. As a user, you don’t need to wait for a counterparty in order to exchange or worry about specifying a price. 

The amount that is returned from swapping is based on an automated market maker formula. No matter the size of a swap, the user is guaranteed to have their trade executed.

Liquidity 

When an Exchange contract is first created for a token, both the token and Ether pools are empty. The first user that deposits into the contract is the one that determines the ratio between the token and Ether. If they deposit a ratio that is different from what the current market rate is, then an arbitrage opportunity is available. 

If you want to become a liquidity provider by adding to an established pool, they should add a proportional amount of token and Ether to the pool. If you don’t, the liquidity you added is at risk of being arbitraged as well.

In addition, larger liquidity pools are beneficial to users because they allow for larger swaps to happen without skewing the token to ETH ratio too far. Uniswap incentives users to add liquidity to pools by rewarding providers with fees that are collected by the protocol. A 0.3% fee is taken for swapping between Ether and a token and roughly a 0.6% is token to token swaps.

Special ERC20 tokens known as liquidity tokens are minted to the provider’s address in proportion to how much liquidity they have contributed. 

The tokens are burned when the user wants to receive the liquidity they contributed plus the fees that we accumulated while their liquidity was locked.

Personal Coaching at CryptoTT

If you need help through the steps you can book a 2 hour personal coaching session for 1ETH. CryptoTT offers individual Trinidad and Tobago Decentralised Financing, one-on-one coaching. These private sessions can cover anything from doing your first trade, to managing your corporate transactions entirely through Blockchain, hence lowering your expenses and opening up entirely new horizons for your business purchases and payments from any country in the world. 

DeFi also gives you access to tools such as borrowing, lending and gaining passive income on tokens which are staked or used for adding liquidity. Tokens are used for currency, rewards points, debt slips, interest accruing bonds, and much more. 

We are here to introduce you to the future of financing, and in case you are already seasoned in the ever growing crypto community, enhance your knowledge and help you grow your skills and knowledge. 
Apart of taking care of your passive income, CryptoTT has agents spread all over the world that are willing to provide you with group courses, entirely depending on your level of knowledge – even if you have never owner crypto before or have been in the industry for years, there is always more to learn.