Decentralized Finance (DeFi) is a hot topic in the cryptocurrency world right now. Even though we hear more and more about the potential of this technological breakthrough to alter the world of traditional finance, many people are still confused about what DeFi entails.

CoinGecko has published its book “How to DeFi.” This book seeks to give a simple starting point for people interested in learning more about the subject.

There are already over $1 billion in assets in the DeFi ecosystem, making it one of the fastest-growing markets in the bitcoin industry. One of the most significant alterations it proposes is decentralizing the financial system from previously required centralized organizations.

Cost and speed of remittance payments, delivering financial services without censorship (even to the 1.7 billion worldwide unbanked), and governance transparency are three areas where DeFi hopes to outperform traditional banking systems.

Walking through the book

After defining DeFi, the book enumerates the many types of financial services that can be accessed at the moment. Every part of the present DeFi ecosystem is discussed, including stablecoins, lending, borrowing, exchanges, derivatives, fund management, lotteries, payments, and insurance.

Part Two of the book describes the workings of the Ethereum network, the leading platform for DeFi applications. The advantages and disadvantages of distributed applications are discussed after briefly introducing Smart Contracts, Ether, and Gas (Dapps).

Finally, we evaluate the features of the available wallets and show how to set up and use Argent, a mobile wallet and Metamask, a desktop wallet.

Now that we have covered the surface, we can dive deeper into Part Three. A whole chapter is devoted to each of the types mentioned above of DeFi services, emphasizing one or two prominent providers. We study Maker DAO to comprehend stablecoins, Compound to comprehend loans, Uniswap and dYdX to comprehend DEx, and so forth.

Each chapter provides an overview of the services accessible, with pictures assisting in the explanation of some of the more complex ideas.

It then describes how the service operates on the specified example platform and provides step-by-step instructions for those who feel forced to dive right in.

Because the book's intended audience is DeFi beginners, some of the finer details of the selected platforms are neglected, but the level is generally tuned about right. Is it necessary for a DeFi newcomer to understand the complexities of the Maker Protocol's incentive scheme?

Conclusion

While the initial chapters do an excellent job of introducing a beginner to the world of DeFi by providing many explanations and pictures, the latter chapters assume some prior knowledge of the subject.

Here we provide a high-level introduction to decentralized financial systems' fundamental concepts and services. It is unclear whether the book's stated goal is to explain DeFi or to sell the services discussed in each chapter, given the extensive coverage of each service.

It could be a good read if you know nothing about the blockchain or cryptocurrencies.