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<p>Introduction 1</p> <p>About This Book 1</p> <p>Foolish Assumptions 2</p> <p>Icons Used in This Book 3</p> <p>Beyond the Book 4</p> <p>Where to Go from Here 4</p> <p><b>Part 1: Getting Started With DEFI 5</b></p> <p><b>Chapter 1: Introducing Decentralized Finance 7</b></p> <p>Demystifying DeFi 8</p> <p>From autonomous collectives to trillion-dollar DAOs 9</p> <p>Transacting in DeFi versus CeFi 10</p> <p>Dispelling harmful DeFi myths 11</p> <p>Going Full Circle: The DeFi-CeFi Infinity Loop 12</p> <p>Safeguarding wealth 12</p> <p>Transferring funds 13</p> <p>Continuing the cycle 13</p> <p>Deciding to DeFi or Not to DeFi 14</p> <p>Acknowledging inherent deficiencies in DeFi 14</p> <p>Recognizing CeFi problems that migrate into DeFi 15</p> <p>Identifying hurdles to adoption 16</p> <p>Contemplating the Future of DeFi 17</p> <p>The potential amazingness of seemingly unimportant applications 17</p> <p>Can we completely replace CeFi? 18</p> <p>Proceeding on Your DeFi Journey 19</p> <p><b>Chapter 2: Discovering the DeFi Lingo 21</b></p> <p>Introducing Key DeFi Terms 21</p> <p>Moving into the Web3 era 22</p> <p>Going the way of a DAO 22</p> <p>Characterizing blockchains and consensus protocols 23</p> <p>Describing cryptocurrencies and NFTs 23</p> <p>Defining smart contracts and dApps 24</p> <p>Getting acquainted with L1, L2, and the EVM 24</p> <p>Grasping important metrics: Market cap, volume, and TVL 25</p> <p>Knowing Important Distinctions 27</p> <p>Custodial versus noncustodial 27</p> <p>On-chain versus off-chain 28</p> <p><b>Chapter 3: Dabbling in DeFi: Getting Your Hands Dirty 29</b></p> <p>Setting Up Your Wallet 30</p> <p>Unmasking MetaMask 30</p> <p>Installing MetaMask 30</p> <p>Setting up MetaMask 35</p> <p>Renaming your account 39</p> <p>Working with MetaMask on your mobile device 41</p> <p>Funding Your Account 45</p> <p>Getting (Real) ETH 46</p> <p>Getting test ETH 47</p> <p><b>Chapter 4: Making Your First DeFi Transactions 55</b></p> <p>Decentralized Lending 56</p> <p>Decentralized Borrowing 61</p> <p>Executing a Trade on a Decentralized Exchange 63</p> <p>Unwinding and Closing Out 70</p> <p><b>Part 2: Diving Into The Burgeoning DEFI Space 75</b></p> <p><b>Chapter 5: Decentralized Assets 77</b></p> <p>Understanding Native Tokens 78</p> <p>Exploring Non-Native Tokens 80</p> <p>Stablecoins 81</p> <p>Wrapped tokens 82</p> <p>Governance tokens 82</p> <p>Security tokens 83</p> <p>Meme coins 83</p> <p>Differentiating Non-Fungible Tokens (NFTs) 85</p> <p><b>Chapter 6: Decentralized Exchanges and Marketplaces 87</b></p> <p>Understanding Liquidity Providers and Order Books 88</p> <p>Distinguishing between Custodial and Noncustodial Exchanges 92</p> <p>Exploring DEXs 93</p> <p>Decentralized order books 94</p> <p>Automated market makers 95</p> <p>Hybrid liquidity and aggregators 101</p> <p>Navigating Marketplaces for Non-Fungible Goods 101</p> <p><b>Chapter 7: Decentralized Lending and Borrowing 103</b></p> <p>Making a Collateralized Loan 104</p> <p>Understanding the Compound lending protocol 105</p> <p>Revisiting DAI: A collateralized loan turned stablecoin 109</p> <p>Using price feeds: What is the collateral worth? 111</p> <p>Implementing a Flash Loan 112</p> <p>A tale of two CEXs: Arbitraging without flash loans 112</p> <p>A tale of two DEXs: Arbitraging with flash loans 114</p> <p>Noting the caveats: The steep price of failure 115</p> <p>Manipulating markets (the dark side of flash loans) 116</p> <p><b>Chapter 8: Decentralized Metaverses 119</b></p> <p>Introducing Decentralized Virtual Economies 120</p> <p>Paving the way for real-world possibilities 120</p> <p>Discovering decentralized metaverses 122</p> <p>Experiencing Decentraland 123</p> <p>Exploring the Metaverse 125</p> <p><b>Part 3: Developing Your Own Dapp: A Step-By-Step Guide 129</b></p> <p><b>Chapter 9: DeFi Building Blocks 131</b></p> <p>Introducing Public Blockchains 132</p> <p>Grasping the importance of a native token 135</p> <p>Understanding key pairs and digital signatures 136</p> <p>Touching on other types of distributed ledgers 142</p> <p>Explaining Consensus Mechanisms 143</p> <p>Proof of Work (PoW) 144</p> <p>Proof of Stake (PoS) 146</p> <p>Proof of XYZ 146</p> <p>Following a Day (or a Second) in the Life of a Transaction 147</p> <p>Determining transaction fees 148</p> <p>Understanding transaction times 154</p> <p>Tracing the journey of a transaction 158</p> <p>Streamlining the Development Process 161</p> <p>Leveraging smart-contract libraries 161</p> <p>Oracles: A Blockchain’s Divine Access to the Outside World 162</p> <p><b>Chapter 10: Smart-Contract Platforms 163</b></p> <p>Diving into Layer 1: Comparing Base Protocols 164</p> <p>Bitcoin 165</p> <p>Ethereum 166</p> <p>Ethereum Classic 168</p> <p>Binance Smart Chain 170</p> <p>Other EVM-Compatible Networks 171</p> <p>TRON 172</p> <p>Flow 173</p> <p>Cardano 175</p> <p>Solana 177</p> <p>Floating Up to Layer 2: Off-Chain Scaling Solutions 178</p> <p>State channels 179</p> <p>Plasma chains and sidechains 180</p> <p>Rollups 180</p> <p>Fraud proofs versus validity proofs 181</p> <p>Crossing Cross-Chain Bridges 182</p> <p><b>Chapter 11: Launching a Smart Contract on Ethereum 183</b></p> <p>Understanding Smart Contracts 184</p> <p>The birth of a smart contract 184</p> <p>Contract accounts versus “regular” (externally owned) accounts 185</p> <p>Smart-contract languages 187</p> <p>Anatomy of a smart contract 189</p> <p>Multiple inheritance: Can you have three or more parents? 191</p> <p>Launching Your Smart Contract 192</p> <p>Using the Remix IDE 192</p> <p>Entering your code 194</p> <p>Compiling your code 199</p> <p>Pre-launch preparations 200</p> <p>Deploying your code 204</p> <p>Accessing Your Smart Contract 209</p> <p>Following your smart contract on a block explorer 209</p> <p>Interacting with your smart contract 212</p> <p>Allowing others to interact with your smart contract 220</p> <p><b>Chapter 12: Launching a Smart Contract on the Binance Smart Chain 229</b></p> <p>Testing the Waters: How to Navigate the BSC Testnet 230</p> <p>Configuring MetaMask 230</p> <p>Launching your smart contract 234</p> <p>Accessing your smart contract 238</p> <p>Feeling Ready for Mainnet? 247</p> <p>Deploying onto Other EVM-Compatible Platforms 248</p> <p>Avalanche 249</p> <p>Polygon 250</p> <p>Cronos 250</p> <p>Fantom 251</p> <p>Arbitrum 252</p> <p>Huobi ECO (HECO) 253</p> <p>Celo 253</p> <p><b>Chapter 13: Launching Your First DeFi Product 255</b></p> <p>Proving Your Proof of Concept 256</p> <p>Identifying the market pain 257</p> <p>Assessing the competition 257</p> <p>Solidifying the value proposition 258</p> <p>Preparing Your Development Stack 258</p> <p>Setting up necessary accounts 259</p> <p>Setting up necessary IDEs 263</p> <p>Implementing the Back End of Your DApp 263</p> <p>Entering your code 263</p> <p>Deploying your Crowdfund contract 269</p> <p>Following your Crowdfund contract 272</p> <p>Funding Crowdfund 274</p> <p>Verifying your Crowdfund contract 280</p> <p>Creating the Front-End User Interface 287</p> <p>Integrating the friendlier front end with the (less friendly) back end 288</p> <p>Nurturing your dApp 294</p> <p><b>Part 4: The Part Of Tens 297</b></p> <p><b>Chapter 14: Top Ten DeFi Applications 299</b></p> <p>Instadapp (INST) 300</p> <p>Compound (COMP) 301</p> <p>PancakeSwap (CAKE) 301</p> <p>JustLend (JST) 301</p> <p>Convex Finance (CVX) 302</p> <p>Curve (CRV) 302</p> <p>Uniswap (UNI) 303</p> <p>Aave (AAVE) 303</p> <p>Lido (LDO) 304</p> <p>Maker (MKR) 304</p> <p><b>Chapter 15: Top Ten Smart-Contract Platforms 305</b></p> <p>Optimism (OP) 306</p> <p>Arbitrum (N/A) 307</p> <p>Fantom (FTM) 307</p> <p>Cronos (CRO) 308</p> <p>Polygon (MATIC) 308</p> <p>Solana (SOL) 309</p> <p>Avalanche (AVAX) 309</p> <p>TRON (TRON) 310</p> <p>Binance Smart Chain (BNB) 310</p> <p>Ethereum (ETH) 311</p> <p>Index 313</p>

<p><b>Seoyoung Kim, PhD, </b>is an Associate Professor of Finance and Business Analytics at Santa Clara University and bestselling co-author of <i>NFTs For Dummies</i>. Seoyoung’s expertise lies in innovative financial instruments, crypto-assets, and blockchain-based ventures, on which she has consulted and written extensively. She regularly gives workshops and talks to academic, legal, and financial institutions, both domestically and internationally.

<p><b>Sit down and enjoy a cup of decentralized finance</b> <p>The new economy is here, and DeFi is at its hub. Wait, there is no hub—that’s the point. This easy-to-understand guide will help you figure it out, with beginner-friendly explanations and examples. Set up your first Web3 wallet to make a decentralized loan, trade tokens on a decentralized exchange, and dabble in the metaverse. You can also take a deep dive into the underlying technology of DeFi to understand what fuels and secures decentralized activity. Looking to demystify decentralized assets, funds, loans, and markets? With the help of this clear <i>For Dummies</i> guide, you’ll learn how to launch your own smart contracts and DeFi solutions. <p><b>Inside… <ul><li>Centralized finance vs. DeFi</li> <li>Crypto, noncustodial wallets, and smart contracts explained</li> <li>Flash loans and automated market makers</li> <li>Blockchain and ledger basics</li> <li>Top DeFi platforms and apps</li> <li>How to code and deploy your own smart contracts and dApps</li></b></ul>

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