What are other Oracle tokens with lower market caps? Examples would be $TDR (Tellor) and $BAND
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Strong team and experienced advisers. An actively developing market with great prospects. If the team succeeds in implementing the road map, the project has every chance to occupy its niche and achieve success.
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In traditional finance, if you want to take out a loan, the bank will ask you to put down 10% and put up your purchase whether a car or house as collateral. For the average joe, loans are a way of obtaining money that they don't have. While nothing stops millionaires from taking out loans as a cheap of leveraging, most Americans participate in the finance system because they don't have money.
In the defi space, instead of 10%, platforms ask borrowers to put up 150%. This is where I question who the beneficiaries of defi are. If the average joe wants a loan for a $100k house, he's not going to put down $150k worth of ETH. I could try to rationalize a person who doesn't want to let go of their ETH, so they put up their ETH as a collateral to take out a loan to buy a house. But I just don't find this very sensible. This borrowing interest rate is too high and the volatility risk is too great. You are more likely to just sell a portion of your ETH and buy a house.
This leaves the only type of person who would take this loan is a speculator. They would put down $150k worth of ETH and then go buy another $100k of ETH. For this scenario, defi is mainly used for leverage, and the borrower hopes the price of ETH goes up faster than the interest rate.
If this is how defi works, it doesn't seem defi has done anything to revolutionize traditional finance, or benefit everyday working people. Is this accurate?
Let's say a borrower puts up $1500 of ETH at $1000/ETH and gets $1000 DAI. If the price of ETH flash crashes down to $100/ETH, can the borrower just say "fuck it, I don't want my ETH back, I'll just keep my DAI because its worth more."
What protocols stop this from happening? If all the money leaves the lending pool and never returns, are the lenders completely out of luck?
via DeFi https://www.reddit.com/r/defi/comments/i5p95e/why_would_someone_use_defi_over_traditional/
I've been trying to learn as much as I can about DeFi lately, and all the different services that exist in this space. One thing I can't seem to wrap my head around is the liquidity pools. Every "yield farming explanation" I've come across falls pretty short on this fundamental detail.
They explain how to set things up, pushing an asset into one of these services and getting stable coins back, and then dumping those into a larger pool of assets to earn rewards. Each tutorial and article explains that the rewards come from providing liquidity to the pool. But I'm wondering who's the beneficiary or consumer of the liquidity?
Maybe I'm missing something obvious here, but lets say one of these pools have $100,000,000 sitting in them. What does it do? Who uses it? For what benefit? Where do the rewards come from? I guess I'm just not understanding the point of having this liquidity if it just sits in the pool. I assume it's being used by exchanges in some form, but that part is still confusing me.
via DeFi https://www.reddit.com/r/defi/comments/i5mm08/whos_using_liquidity_from_these_pools/