https://twitter.com/puntium/status/1493417236660318208
0/ I'm often asked: how do you keep up with DeFi when it moves so fast?
My response: if you focus on learning a handful of core concepts, you'll be 80% there with 20% of the effort.
🧵The first 5 concepts you should learn in DeFi
veKen Deeter@puntium·7hReplying to @puntium1/ Standardized Tokens
The ERC20 standard defines how shadowy super coders can invent new types of tokens that are compatible with DeFi apps.
Read the original Ethereum Improvement Proposal from 2015: https://eips.ethereum.org/EIPS/eip-20
This API standard powers the entire token ecosystem.
2/ Synthetic stablecoins
@MakerDAO showed how to create stable, dollar-pegged, synthetic tokens using volatile assets as backing collateral.
The original whitepaper from 2017:
3/ Automated markets
@Uniswap showed how to create always-on, 24/7 trading markets based on a simple pricing algorithm and user-provided market-making capital.
The original Uniswap whitepaper:
3.1/ @CurveFinance showed that if you focus on automated market making for like-priced assets, then you can realize both pricing and capital efficiency.
Curve's whitepaper from 2019, describing "StableSwaps":
4/ Automated Lending
@compoundfinance and @AaveAave show how similar automated markets can let anyone be a borrower or lender.
Compound whitepaper from 2019:
Aave whitepaper from 2020:
5/ Automated Investment Strategies
@yearn showed how to create automated investment strategies that simplify DeFi investing down to a simple deposit
@AndreCronjeTech's medium post describing yearn v2 "vaults"
I love reading original whitepapers because they describe groundbreaking ideas in a world where there were no easy comparisons. True first principles thinking.
Understand these 5 concepts and you'll see most of DeFi is forking, remixing, and iterating on these ideas.
Like threads like this? Follow me at @puntium to keep learning about DeFi and web3.
In a future installment, I'll go through newer projects that are building a new set of essential money legos.