STON.fi Blog

DeFi (Decentralized finance) is a general term denoting various financial applications based on the blockchain and cryptocurrencies that are aimed at creating an alternative financial system that works without intermediaries. When any such DeFi applications are created, equal participants of the community have access to copies of their transaction histories. Consequently, the transactions are not controlled by any centralized body, which means that they cannot be altered or falsified. In terms of functional potential, DeFi applications offer the full range of traditional financial instruments, but often provide a higher income due to th

A liquidity pool is a basis for DeFi that does not have an exact equivalent in the classical financial system. In simple terms, a liquidity pool is a smart contract where a certain number of tokens is blocked so that any DeFi participants can use them for exchanges, crediting, blockchain games, profitable yield farming, and other operations. Decentralized exchanges (DEX) that use automated market making (AMM) work on liquidity pools. The providers who bring liquidity to the pool receive compensation when traders use their funds. Liquidity pool users get immediate access to the tokens they exchange. There are no intermediaries in this proce

You can learn about the differences between Decentralized (DEX) and Centralized (CEX) Exchanges here . Now we’ll briefly cover how to trade on a DEX. The exchange process itself is extremely simple. You do not need to register on the exchange, make a deposit to trade, or submit your personal data to the exchange operator. You just connect your crypto wallet and immediately see all the tokens available to exchange. Then you choose what you want to exchange and confirm the transaction – and the tokens you acquired are instantly transferred to your wallet. There are no centralized intermediary companies involved in this transaction; the ex

IDO (Initial DEX Offering) is the initial offer of tokens on a decentralized exchange (DEX) and, at the same time, is currently the most popular method of crypto crowdfunding. This method is beneficial to both startups and investors. Unlike ICO (Initial Coin Offering) and IEO (Initial Exchange Offering), the requirements for investors and developers are minimal, and the token is listed on the DEX immediately after token minting, IDO, and creation of the liquidity pool. Typical IDO procedure goes as follows: 1. Preparation – working on the website, white paper, yellow paper, and social networking to create a community. 2. Presale – th

It is well-known that decentralized exchanges do not have a central node or server, and work without administrators or any particular management body. All transactions are conducted without intermediaries. However, this does not mean that cryptocurrency traders are the only DEX participants, even though the exchange itself was created specifically for them. Key participants of DEXes: Traders – participants who exchange one kind of token for another. Liquidity providers – cryptocurrency owners ready to deposit their cryptocurrency in liquidity pools, which serve as the base of the entire DeFi system. To put it simply, liquidity provid

Front-running is a kind of insider trading with financial assets that long predates cryptocurrencies and cryptocurrency exchanges. If you are a broker, the idea is self-evident. Knowing that your client is going to make a large purchase on the exchange, which will naturally increase the asset value, you simply buy some for yourself first, then sell it at the higher price. Profit! Front-running is even simpler on decentralized exchanges, where information about transactions (i.e. purchase and sale offers before they occur) is absolutely transparent. There is no need to possess any insider information; it is there, on the blockchain. This