How DeFi works
The mechanics behind decentralized finance, with worked examples and the risks at every step. Start with what DeFi is if you're new.
Trading
Automated market makers and liquidity pools: how x · y = k worksAn automated market maker (AMM) is a decentralized exchange that trades against a pool of two tokens instead of an order book.Impermanent loss explained, with the formulaImpermanent loss is how much worse off a liquidity provider is than someone who just held the same two tokens, caused by the pool rebalancing as prices move.Impermanent loss calculatorYour loss against holding for any price change.
Borrowing, lending and staking
Crypto lending and borrowing: collateral, health factor and liquidationsIn DeFi lending, lenders deposit tokens into a pool and borrowers take loans only against collateral worth more than the loan.Liquid staking and restaking explainedLiquid staking lets you stake ETH through a protocol such as Lido and receive a token (stETH) that earns staking rewards and can still be traded or used in DeFi.
Dollars on-chain
Decentralized stablecoins: how DAI and USDS workA decentralized stablecoin such as DAI or its successor USDS is minted by users who lock up more crypto than the stablecoins they create.Tokenized Treasuries and real-world assets (RWAs)Tokenized Treasuries are shares in funds holding US Treasury bills, recorded as tokens on a blockchain.The stablecoin marketHow big it is and who issues it.