The second meet up in the DeFi Primitive Series hosted on the theme of “The Core Components of DeFi” was organized on 26th August 2022 where our esteemed CEO, Dr Ravi Chamria, covered the different key components that make DeFi one of the pioneering trends in the financial technology space today. He deep dived into the key elements that form the DeFi and also helped the participants understand how they work, what their features, their significance with splendid examples, and also how they help in transforming the financial landscape today.

Dr Chamria started the session with a recap about the DEXs, smart contracts and also drew a comparison between the centralized and the decentralized exchanges as covered in the first meet up. During the second session, he dug a little deeper into the core constructs of the DeFi as these power the use cases of DeFi in the financial ecosystem. While giving the recap, he also spoke a few lines about the blockchain as a decentralized ledger technology where transactions can be done between two unknown parties without any intermediaries and stressed on the importance of various components to ensure transparency of transactions.

In the   session, Dr Chamria spoke in detail of one of the key components – transactions by giving an example of Etheruem wallet and Metamask wallet. He deep dived into how a transaction occurs in the smart contract-enabled blockchains. Another core construct of DeFi which the speaker spoke of in the session was fungible tokens. Talking of fungible tokens, he mentioned the Ethereum blockchain fungible token standard – ERC – 20. The speaker also gave a detailed insight about the three main types of the ERC – 20 tokens such as Equity token, utility tokens and also governance tokens. Post the fungible token, he elaborated on Non-fungible tokens (NFTs) as another key construct of the DeFi. He used examples to give webinar attendees a better understanding of the primary components of DeFi. While talking of NFTs, he spoke of how the concept has expanded hugely where it also encapsulates the real world tokenization.

Participants also got a chance to understand another critical component of DeFi ecosystem – custody, where the speaker highlighted what it facilitates and also provided a detailed overview of custody of tokens in a smart contract. When touching upon the supply adjustment key construct of the DeFi – speaker basically highlighted about the minting of tokens and also the burning of tokens.

During the session, Dr Chamria also spoke of incentives, swap and other core constructs. Watch the full episode about the key components of DeFi applications and their longer term implications powering some of the most popular DeFi use cases.