👓DeFi Basics

What is Decentralized Finance?

Decentralized Finance, or DeFi for short, encompasses financial services such as lending and borrowing on various blockchains like Ethereum and Binance Smart Chain.

A key feature of DeFi is the elimination of slow and costly (often human controlled) portions of financial services through the use of computer automated agreements known as smart contracts. DeFi's use of smart contracts allows many types of financial transactions to flow based on logic-based predefined conditions including the borrowing and lending of assets.

Smart contracts work to approve or deny transactions based purely on publicly reviewable conditions in the smart contracts rather than the outcome of a transaction being centralized and controlled by a single person or team as is typical in a traditional financial institutions.

I am new to DeFi, how to get started?

At any point during this process, please join our Telegram and Discord chat rooms. Use the chat rooms ask questions to the team and larger Dracula Protocol community or just hang out and socialize with other community members.

We are happy to help you get started or dig deep into Dracula Protocol!

FIRST

Read about fees, which are known as "gas" in DeFi slang or "gwei" for the technical term on the Ethereum network. Read the great guide from APY.Vision that explains gas fees and their function in DeFi.

A Guide to Gas Prices in DeFi |APY.vision blog

SECOND

Read about liquidity trading and Automatic Market Makers (AMM.)

Search - Cryptopedia | GeminiGemini

THIRD

Check out the function of Impermanent Loss (IL.)

Impermanent Loss & other Liquidity Mining risks explained - Dr. Julian Hosp - The Blockchain ExpertDr. Julian Hosp - The Blockchain Expert

FOURTH

Review the Dracula Protocol articles on Medium and HackerNoon.

FIFTH

Create a MetaMask wallet either by installing the MetaMask mobile app or adding the extension to your favorite browser (Chrome or Firefox).

What are the Risks?

DeFi is relatively new and there have been many instances of users losing their funds due to malicious actors or unintentional bugs in protocol and platform software.

Dracula Protocol is open-source and has completed community audits, but those qualifications alone does not make using the protocol risk-free.

Always do your own research about the underlying platform where you are depositing your assets. We cannot guarantee the security of other platforms or the safety of your assets on those platforms. Read more about the risks of swapping from CryptoPotato.

What is 'Front-Running'?

Read our explanation of front-running in the glossary and how it effects swapping tokens in DeFi.

How Do I Keep My Assets Safe?

See Avoiding Scams in the Community section.

How Does Dracula Protocol fit into DeFi?

🧛‍♂️ Dracula V2 Explained covers how Dracula Protocol interacts with the DeFi ecosystem.