DeFi 101

Time to learn some basics!

What is decentralized finance?

Decentralized Finance (or "DeFi"), refers to a new type of financial system that is decentralized and operates on blockchain technology. It is an umbrella term for financial services on public blockchains, such as Ethereum and Polygon. With DeFi, you can do most of the things that banks support — earn interest, borrow, lend, buy insurance, trade derivatives, trade assets, and more — but it’s faster and doesn’t require paperwork or a third party. As with crypto generally, DeFi is global, peer-to-peer (meaning directly between two people, not routed through a centralized system), pseudonymous, and open to all. This has the potential to create more open, free, and fair financial markets that are accessible to anyone with an internet connection.

What is a digital wallet and why do I need it?

To access our service, make sure that you have a Web3-enabled wallet installed on either a computer or smartphone. For instance the MetaMask wallet which can be easily added to your browser, or the Coinbase wallet on your phone. This gives you access to the next generation of financial apps. We provide detailed instructions on how to connect - so all it takes is 5 minutes from start to finish. No technical experience needed!

What are stablecoins?

Stablecoins are a type of digital currency that are designed to keep their value stable, usually by being tied to a specific asset like the US dollar. They offer the benefits of fast and cheap transactions, but without the price swings that other cryptocurrencies like Bitcoin can experience. This makes them useful for people who want to store their money in a stable currency but still use blockchain technology for things like lending, borrowing, and trading.

HaloFi supports stablecoins pegged to various currencies, including the US dollar, Euro, and Brazilian Real. Some of the stablecoins HaloFi supports include DAI, USDC, USDT, cUSD, agEUR, cEUR, and jEUR. For a complete list you can check out:

Does HaloFi have a negative environmental impact?

HaloFi is committed to sustainability and responsible use of technology. When it comes to its environmental impact, HaloFi uses carbon-negative blockchains Celo and Polygon, which are known for their efficiency and sustainability. Compared to Bitcoin, which requires a lot of energy due to its Proof-of-Work consensus mechanism, they utilize more efficient Proof-of-Stake consensus mechanisms, meaning they require less energy and produce fewer carbon emissions.

Moreover, both Polygon and Celo offset their carbon footprint and have committed to having a net positive impact on the environment. This means that they not only reduce their carbon emissions but also work towards improving the environment. As such, using HaloFi is a responsible choice for those who care about the sustainability of their digital activities.

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