Financial Technology DeFi Protocol: A Review

Abstract

DeFi or Decentralized Finance is a new type of financial application that does not require an intermediary. Banks or financial institutions. DeFi is built on Blockchain technology that stores DeFi transaction data or 'decentralized finance' and aims to create financial services that are open to all. The DeFi platform can operate by itself without any control and is called 'Smart Contract.' It is widely used as an infrastructure for developers. Decentralized Applications (Dapps), which is the purpose of this research aims to study the operating system and capabilities of each platform. The creators of Etheruem, in addition to Vitalik Bulletin, are also other founding members who co-founded Ethereum, some of them have branched out to create their own networks, such as Gavin Woord who spun off to create Polkadot (DOT), or Charles Hoskinson who spun out to create Cardano (ADA), and Fabian Vogelsteller who spun out to create Lukso (LYXe), etc. All three networks are proof-of-stake blockchains, unlike Ethereum, which is Proof-of-Work and Proof-of-Stake system which can do higher processing speed Proof-of-Work. It saves a lot of energy, and instead of having each computer compete with each other to solve the equation in exchange for permission to verify transactions, Proof-of-Stake. The reviewers are randomly selected by the system with higher processing speeds than Ethereum. These networks are called third-generation Blockchain Ethereum. It is about to have a major update called 'Ethereum 2.0' that will change the network to Proof-of-Stake including modifying various systems to make it easier to use for the general public. This update is expected to take effect in the year 2022.