Explore the transformative world of Decentralized Finance (DeFi), where financial services operate on blockchain technology without traditional intermediaries. Understand its core properties, technology stack, and the potential impact on global finance.
This chapter delves into the foundational concepts of blockchain technology, tracing its evolution from Bitcoin's inception to modern scaling solutions and cross-chain interoperability that are shaping the future of decentralized finance.
Explore the foundations of traditional finance systems, understanding how banks, markets, and intermediaries operate. Learn about the structure, mechanisms, and limitations of conventional financial services that DeFi aims to transform.
Dive into smart contracts, the foundational technology powering DeFi. Learn how programmable contracts execute automatically on blockchains, enabling trustless financial applications and decentralized protocols.
Understand the evolution from traditional order book exchanges to automated market makers. Learn how DEXs revolutionize trading through smart contracts and liquidity pools.
Deep dive into the constant product formula (x*y=k) that powers Uniswap. Learn the mathematics behind automated market makers, price determination, and how liquidity pools work.
Understand the economics of being a liquidity provider. Learn about impermanent loss, fee generation, risk-return tradeoffs, and strategies for profitable liquidity provision in DeFi.
Learn how arbitrageurs keep AMM prices aligned with markets. Understand arbitrage mechanics, flash loans, multi-hop strategies, and why arbitrage is essential for AMM functionality.
Explore advanced AMM designs beyond the constant product formula. Learn about Curve's StableSwap, Balancer's weighted pools, Uniswap v3's concentrated liquidity, and how different invariant curves optimize for specific use cases.
Deep dive into Curve Finance's StableSwap algorithm. Learn how combining constant sum and constant product formulas creates the most efficient AMM for stablecoins and pegged assets.
Master Uniswap V3's concentrated liquidity innovation. Learn how price ranges, virtual reserves, and NFT positions enable unprecedented capital efficiency and active liquidity management strategies.
Explore DODO's innovative Proactive Market Maker (PMM) algorithm that uses external oracles to set prices. Learn how oracle-based pricing enables superior capital efficiency and single-sided liquidity provision.
Master the fundamentals of Decentralized Finance (DeFi) and learn how blockchain technology is revolutionizing traditional financial services through permissionless protocols and smart contracts.