DeFi on Ethereum Explained - Decentralized Finance (Ultimate Beginners' Guide)

This is a beginner's guide about DeFi, or decentralized finance, products and services being build on the Ethereum ecosystem.

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00:00 - Introduction
01:42 - What is DeFi?
03:47 - DeFi’s Foundation - Blockchain
10:40 - DeFi’s Ecosystem - Ethereum
16:10 - DeFi’s Financial Stack
24:03 - DeFi’s Architecture - Money Legos

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DeFi is the trendy shortened version of the term “decentralized finance.”

So the word “finance” in these concepts simply refers to the financial industry at large, while “decentralized” and “centralized” describe the nature of its foundation and how it works.

Currently, the entire traditional finance industry is “centralized.”

So, although DeFi stands for the term “decentralized finance,” the word DeFi is used colloquially to describe the movement or crusade towards a low-cost, fast, efficient, trustworthy, and completely transparent global financial ecosystem.

The new financial era will operate on the very place from which numbers, mathematics, physics, and computer science were derived: the ever-enduring fabric of the universe.

in the coming years, DeFi will allow the entire financial foundation to operate purely from principles of mathematics and computer science using what’s known as blockchain technology.

Blockchain technology is the cornerstone of decentralized finance, as it's what makes the decentralization aspect of DeFi possible.

The idea of, and desire for, a crusade towards decentralized finance, or DeFi, emerged back in November of 2018.

There are 5 components to the DeFi stack: Stablecoins, Exchanges, Money Markets, Synthetics, and Insurance.

The simplest way to describe and understand DeFi’s architecture, or the relationship between all of these components and decentralized financial applications on Ethereum is by comparing them to Legos.

One of the main principles of the DeFi ecosystem is to achieve interoperability.

That way, each new project doesn’t just exist as an individual product or service, but rather serves as a new lego piece, or building block developers can leverage for other projects.

So instead of choosing from a pile of random legos to start assembling something, they can actually take an existing lego structure to run with in a new direction.

You can see how DeFi’s lego-like architecture allows for efficient, limitless creation and expansion of a whole new global financial universe.

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[allensmith]

Crypto Casey is the smartest clearest teacher on the web. Thank you for helping us understand the DeFi world.

[davidterrie]

When I was in college, a professor recommended reading Henry James' The Ambassadors only 5 pages at a time because it was so dense. Listening to you is like this. I find I have to pause your videos at times to give my brain a chance to breath. This is a good thing. Learning does not come without effort.

[JonathanGonzalez-iiwc]

Finally someone who can explain Defi clear enough for everyone!!

[cryptoneon]

Plenty of questions about Defi answered here. Very informative as always Casey 👌🏽

[caseyfer]

I stumbled upon your videos while looking for NFT Gaming Videos. After watching one of your videos, I Subscribed right away then continued to watch for about 6 hours straight while at work. You opened my mind.
Thank you.
You Are Gold.

[gentcfr]

Best video have seen with good diction, explanatory, clear and informative enough to learn basis of DEFI.

[jonathanstewart]

Very good video for beginners and anyone who needs clarification! Also, like your new background. Blue screen with a live computer patch-in? Very professional!

[jadams]

Loved this briefing Casey!!! I will definitely pass this on to my people/friends!

[meriljayasinghe]

You are great teacher, everything had a perfect flow

[lovelovevon]

This lady is good asf! I don't know how she has so much knowledge and is willing to share and teach. She's amazing!

[Bunty-Rai]

Beautiful Casey explains every complex thing beautifully....

[rickgowen]

Of the countless videos I've watched on this subject, this one is the best. I know this topic pretty well and could not explain any better. Great work!! Thanks.

[whatsthedealoneill]

Again a super clear, interesting and informative video. I feel like I could pass this video on to anyone wanting to understand DeFi. I really appreciate your channel.

[Georgelikestodesign]

Honestly, this is the clearest anyone has ever explained defi, and I'm grateful I stumbled upon this . thank you

[hopesingh]

Just starting my blockchain journey and your content is simply amazing. Thank you for all your hard work in putting this content in "an easy to understand fomat" and educating me and other like me.

[evolutionnotrevolution]

Wow. A complex paradigm made simple by your education. Thanks so much Casey!! You truly are an industry leader! This of course leads into the political governance aspect of this emerging paradigm. The banking cartel vs the people. The power and regulation of centralization will not so easily be surrendered. I'm sure we would all love to hear your thoughts on how Govts are likely to wrest control of this unregulated DeFi platform and whether (read almost certainly) they will force us to use only Govt issued digital currencies for trade.

[jrenthegrey]

Hey Casey, thanks for this awesome introduction to DeFi. 🙃 Well structured, with great, fitting visuals. You're honestly the only Crypto YouTuber I've stumbled across so far who seems honest and trustworthy. And most importantly, you're clearly - unlike most other CC YouTubers - not in the Cryptocurrency space for profit's sake, but because of genuine interest in the underlying technology and its possibilities.
I would be very interested to hear your thoughts on the Cardano project. 😉
Greetings from Switzerland 🇨🇭

[elguaje]

We are only a third of the way through your Expectancy Investing course and our investment performance has already improved by $120, 000 compared to what our old portfolio would have done over the same time period

[klabfoundation]

Oh dear ceasy good to see u back again 😘😘😘😘😘😘😘😘😘

[ricardoalonsot]

Thnaks for the explanation, i would love to see more videos, maybe 3 or 4 a week, and some news, we love the way you explain things. keep the grate work.