The emergence of Bitcoin in 2009 opened the door to opportunities for the development of businesses, applications and services in the world of cryptocurrencies. Since then, more and more people are getting involved in trading, mining or decentralized finance (DeFi) platforms as an example of the new landscape that exists in terms of money management.
In the midst of this global financial reconfiguration, decentralized financial platforms are making inroads with the goal of furthering what Bitcoin started more than 10 years ago.
DeFi are services or financial products that take advantage of public blockchainssuch as Ethereum, to interact with their smart contracts and generate other proposals such as cryptocurrency loans or generating their own tokens.
That’s why we offer three video tutorials to get you started using YouHodler or Compound services, to make deposits and request funding for your projects, or to create your own pegged tokens with Maker.
Credits on YouHodler
The service provided by YouHodler is a clear example of how decentralized financial platforms work. The company offers fiat currency loans to cryptocurrency holders in exchange for a security deposit. The aim is that owners of bitcoin, litecoin, ethereum, XRP (ripple), Bitcoin Cash, Bitcoin SV, Stellar, Dash or EOS, they don’t have to sell their property to get the funds.
Loans range from 100 to 30,000 US dollars, although the user can choose whether to receive the money in euros or in tether stablecoin. There are three established deadlines for the payment of capital and associated interest: 8 days, 50 days or 120 days. There is also the possibility of setting personalized deadlines for each user.
The established interest rate ranges from 5% to 13%, which depends on the duration of the job and the available loan-to-value ratio (maximum 85%). Loan release comes immediately Because the company has its own reserves in fiat currencies, which means that the waiting time for approval is very short.
It should be noted that YouHodler uses Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols. It is also important to note that in the event that the cryptocurrency market experiences an upward trend, the platform will return the funds, once fully paid out, with a corresponding profit.
You can learn how the YouHodler lending platform works in the following guide.
Deposits and loans in Compound
The Compound platform is another alternative when it comes to looking for loans in the cryptocurrency ecosystem, although it works differently than YouHodler. This is a system where users can earn interest through their deposits in ether (ETH), 0x (ZRK), dai (DAI), basic attention token (BAT) and augur (REP), while others can request loans, in ether or in another one of these tokens.
Compound runs on the ethereum blockchain with no defined interest rate, depending on what info company. The protocol is “full of liquidity” in which there is a the market into which funds are injected and other people borrow from it, without running directly from user to user.
The rate is determined algorithmically based on supply and demand. In addition, interest accrues on each ethereum block. It is important to note that in Compound there are no pre-defined periods such as 60 or 90 days for payment. The user is free to honor his commitment as much as he wants.
An interested party can request a loan with 1.5x collateral. That is, for every $100 in credit, you must have a minimum deposit of $150. It is also necessary to use a wallet that allows you to interact with the Ethereum network, such as Metamask.
The following video explains how to make a deposit and apply for a loan in Compound.
Create tokens in Maker
In the world of decentralized financial platforms, the user is at the center of planning, and services revolve around him. Just as there are options to request credits, there are options like Maker so anyone can create their own tokens.
Maker is a decentralized service in which the DAI token is created, which works under the ERC-20 protocol of the Ethereum network and which uses the concept of collateralization relationship. Although DAI maintains a 1:1 link to the US dollar, its price is determined via an ether deposit on a smart contract called a CDP or Collateralized Debt Position.
To create a token, a CDP must be generated taking into account the deposited amount of collateral. This balance remains as collateral, which will enable the issuance of DAI. User will be able to make new deposits after creating CDP to increase DAI amount. To close a CDP, a person has to pay the DAI equivalent and the annual interest rate.
In this guide you will learn step by step how to create your own anchor token or stablecoin.