It allows users to borrow DAI, a token pegged to the US dollar. MakerDAO is a prominent lending DeFi platform based on a stablecoin that was established in 2017. Other blockchains have since implemented smart contracts. The Ethereum blockchain popularized smart contracts, which are the basis of DeFi, in 2017. While they share common components of the first four layers, such as Settlement layer, Asset layer, Protocol layer and Application layer, DEX aggregators have an additional component or Aggregator layer, which allows them to connect and interact with other DEXs via smart contracts. ( See Figure: Multi-layered Architecture of the DeFi Stack). CEXs, DEXs and DEX aggregators are all built on the multi-layered DeFi architecture or components, where each layer serves a well-defined purpose. DEX aggregators form user-centric hubs that compose to several applications and protocols, also providing tools to compare and rate services, which allow users to perform otherwise complex tasks by connecting to several protocols simultaneously. Most recently, DEX aggregators have begun to play a more distinctive part in the DEX segment. Unlike centralized cryptocurrency exchanges (CEXs), such as Coinbase, Huobi or Binance, which use order books to match buyers and sellers on the open market and keep crypto assets in an exchange-based wallet, DEXs are non-custodial and leverage the functionality of self-executing smart contracts for peer-to-peer trading, while users retain control of their private keys and funds. Multi-layered Architecture of the DeFi StackÄecentralized exchanges (abbreviated DEXs) as alternative payment ecosystems with new protocols for financial transactions emerged within the framework of decentralized finance, which is part of blockchain technology and FinTech.
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