How to Get Started in DeFi: 4 Tips and a Practical Guide Book

Many of us have come to know about decentralized finance (DeFi) and have faced this sector with many doubts, understanding its potential, especially given the interests and the APR and APY it provides to those who interact with the various protocols.

As with any technology and protocol in the crypto and blockchain sector, you have to start from the basics, since not all protocols use the same assets, and the various protocols are located on different blockchains, allowing maximum freedom of choice.

1 - Know the reference blockchain

The first step to operate in the crypto world is obviously to know the means by which they work, and here there are really several blockchains but only some of these offer protocols dedicated to decentralized finance, and it makes no sense to start with a crypto if you don't it knows the operation to which it is linked, however I would start from one of the 3 chosen between Ethereum, EOS or Tron.

2 - Choose the asset based on the risk

Most of the protocols that we find in this sector, exploit stablecoins, i.e. assets pegged to a value that can be fiat (dollar, euro...) or other crypto because these stablecoins are generated by blocking a respective value of other crypto (DAI, sUSD, USN), and have the advantage of not fluctuating much in price and therefore in most cases are pegged 1 to 1 with the underlying.

But using these stablecoins means taking a further step in the conversion of crypto into these stablecoins, while instead there are some protocols that allow you to directly use the crypto of the blockchain and therefore take advantage of for example ETH, EOS or TRX.

And then there are the various tokens, with various functions and various protocols, which can be used such as UNI, PIZZA, BTT, and in this case there are no problems whatsoever.

3 - Choose and know how to use different wallets

To interact with these DeFi protocols, precisely because they are decentralized, they can be used through the users' personal tools, namely wallets, which keep private keys and allow you to sign the transaction relating to the interaction we are doing.

In this case there are different wallets to be able to manage cryptocurrencies but not all of them are suitable for interacting with the various platforms, since they decide which wallets to integrate or better adapt to the protocol, and this means that if we only use one wallet , it is not certain that it is also good for these platforms.

Furthermore, each blockchain has different wallets and therefore you must always use a different one, unless you use one that can manage different blockchains, but basic to interact with these protocols the best are for Ethereum, MetaMask, for the EOS blockchain is Scatter and Anchor Wallet, while for the Tron blockchain we have TronLink.

4 - Choose the type of protocol

Once we have all the material to be able to start, the next step is to understand which protocol we want to interact with, since DeFi is divided into 5 macro areas and all with different functions, and based on what we want to use, we choose the one that suits us best.

In fact, in the DeFi sector we can find almost all the elements of traditional finance and to be able to manage them independently and without intermediaries, for example a classic case is that relating to loans in which we ourselves can provide liquidity to a smart contract, in exchange for interest, or borrow liquidity, using our funds as collateral, so if by chance we have 100 of a crypto, we can borrow half and without having to pay the whole amount, and then later repay the loan that we will have carried out.

But the use cases are so many that it is not possible to list them all in one article, but as mentioned they can cover almost every aspect of traditional finance, but in a decentralized way.

These are just some of the more practical tips for starting to operate with decentralized finance, while if you want to learn more about the subject and read a book that explains the various topics in detail then I reccomend to read one of the most important books about decentralized finance (DeFi), which takes the name of "Mastering DeFi - A practical guide for beginners and the advanced", important because it not only explains the basics of this sector and the various steps of the various protocols, over 30, but it is also the only one that examines 3 different blockchains such as Ethereum (ETH), EOS and Tron (TRX).

A book that analyzes the macro-categories of decentralized finance which are:

1. Lending and Borrowing
2. Payments
3. Decentralized Exchange
4. Asset management
5. Derivatives

All organized into 8 chapters and also divided by blockchain so as to have a complete picture of what we find on the various blockchains and also make the relative comparisons to leave maximum freedom for anyone to use the blockchain they prefer without closing the door to others.

Over 30 protocols analyzed in detail and details, with relative fundamental steps, an indication of the various costs incurred to carry out the various transactions, so as to make the reader aware before he can interact with him.

Translated into 8 different languages, Italian, English, German, French, Spanish, Portuguese,
Dutch, and Japanese, so as not to exclude anyone from this revolution that is underway and will continue in the years to come.