1. DeFi liquidity mining: "miners" who earn interest while lying down
Simply put, liquidity mining is like you deposit money into the bank to earn interest, but what you deposit here is cryptocurrency, which has higher interest rates and can withdraw cash at any time. For example, if you deposit ETH and USDT in a decentralized exchange (DEX) like Uniswap, the system will send you a "deposit voucher" (LP token) to prove how much money you invested. The more you save, the more transaction fee sharing and platform rewards will be.
But be aware that currency price fluctuations may affect returns. For example, if you save ETH and USDT, if ETH plummets, the system will automatically adjust the pool ratio. You may get more ETH but less USDT when you redeem it (and vice versa). Developing such a system requires writing smart contracts, such as using Solidity to define the logic of "save money", "withdraw money" and "calculate interest", and also a user-friendly front-end page for novice to operate.
2. Uniswap V2: "Unmanned Supermarket" that automatically sells goods
Uniswap V2 is like an unmanned supermarket open 24 hours a day, and there are no middlemen to make a difference. At its core, it is liquidity pools, such as ETH and USDT pools. When you deposit two kinds of coins, the system will automatically calculate the price according to the amount of coins in the pool.
For example, a chestnut: There are 100 ETH and 100,000 USDT in the pool, and the price of 1 ETH is 1,000 USDT. If someone buys ETH with USDT, the ETH in the pool will decrease and USDT will increase, and the ETH price will rise - this is the logic of automatic market makers (AMM).
The key code for developing this kind of DEX is in the addLiquidity() function: it will check whether the pool exists, help you calculate how many coins you should save, and then issue LP tokens to you. There is also a trick operation in the code called create2. You can calculate the contract address of the pool in advance, and you don’t have to spend Gas fees every time you deploy a new pool.
3. Compound loan: mortgage cryptocurrency "swipe credit card"
Compound is equivalent to a decentralized bank. If you deposit ETH in, you can get cETH (similar to passbook), and the interest will automatically increase every day. If you want to borrow money, you can use cETH to borrow USDT, but you must over-collateralize (for example, ETH with a mortgage of $100 can only borrow $60).
Interest rates are dynamic: the more people borrow, the higher the interest rate. For example, when the capital utilization rate (borrowing ratio) exceeds 80%, the interest rate will suddenly jump, forcing everyone to pay back the money as soon as possible. This logic depends entirely on smart contracts, such as Comptroller contracts to control risk, CToken contracts to calculate interest, and even liquidation is automatically triggered - when there is insufficient mortgage, the robot will come to "pick out cheap" and buy your collateral at a low price
Summary: DeFi's "three horses"
Liquidity mining: high returns but high risks, suitable for players who dare to take risks.
DEX (such as Uniswap): Trading is transparent, but the price fluctuates greatly, suitable for high-frequency traders.
Lending and Loan Agreement (such as Compound): Make sure to earn interest, but be careful when borrowing money.
The core of DeFi is to replace banks with code and use smart contracts to ensure transparency of rules. However, code loopholes and currency price fluctuations are still big pits, so you must do your homework before entering the pit!
Simply put, liquidity mining is like you deposit money into the bank to earn interest, but what you deposit here is cryptocurrency, which has higher interest rates and can withdraw cash at any time. For example, if you deposit ETH and USDT in a decentralized exchange (DEX) like Uniswap, the system will send you a "deposit voucher" (LP token) to prove how much money you invested. The more you save, the more transaction fee sharing and platform rewards will be.
But be aware that currency price fluctuations may affect returns. For example, if you save ETH and USDT, if ETH plummets, the system will automatically adjust the pool ratio. You may get more ETH but less USDT when you redeem it (and vice versa). Developing such a system requires writing smart contracts, such as using Solidity to define the logic of "save money", "withdraw money" and "calculate interest", and also a user-friendly front-end page for novice to operate.
2. Uniswap V2: "Unmanned Supermarket" that automatically sells goods
Uniswap V2 is like an unmanned supermarket open 24 hours a day, and there are no middlemen to make a difference. At its core, it is liquidity pools, such as ETH and USDT pools. When you deposit two kinds of coins, the system will automatically calculate the price according to the amount of coins in the pool.
For example, a chestnut: There are 100 ETH and 100,000 USDT in the pool, and the price of 1 ETH is 1,000 USDT. If someone buys ETH with USDT, the ETH in the pool will decrease and USDT will increase, and the ETH price will rise - this is the logic of automatic market makers (AMM).
The key code for developing this kind of DEX is in the addLiquidity() function: it will check whether the pool exists, help you calculate how many coins you should save, and then issue LP tokens to you. There is also a trick operation in the code called create2. You can calculate the contract address of the pool in advance, and you don’t have to spend Gas fees every time you deploy a new pool.
3. Compound loan: mortgage cryptocurrency "swipe credit card"
Compound is equivalent to a decentralized bank. If you deposit ETH in, you can get cETH (similar to passbook), and the interest will automatically increase every day. If you want to borrow money, you can use cETH to borrow USDT, but you must over-collateralize (for example, ETH with a mortgage of $100 can only borrow $60).
Interest rates are dynamic: the more people borrow, the higher the interest rate. For example, when the capital utilization rate (borrowing ratio) exceeds 80%, the interest rate will suddenly jump, forcing everyone to pay back the money as soon as possible. This logic depends entirely on smart contracts, such as Comptroller contracts to control risk, CToken contracts to calculate interest, and even liquidation is automatically triggered - when there is insufficient mortgage, the robot will come to "pick out cheap" and buy your collateral at a low price
Summary: DeFi's "three horses"
Liquidity mining: high returns but high risks, suitable for players who dare to take risks.
DEX (such as Uniswap): Trading is transparent, but the price fluctuates greatly, suitable for high-frequency traders.
Lending and Loan Agreement (such as Compound): Make sure to earn interest, but be careful when borrowing money.
The core of DeFi is to replace banks with code and use smart contracts to ensure transparency of rules. However, code loopholes and currency price fluctuations are still big pits, so you must do your homework before entering the pit!