In 2008, a pseudonymous user under the name Satoshi Nakamoto released a paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” on small Internet forums. The paper outlined a novel peer-to-peer protocol that would later constitute the world’s first digital asset which promised to rewire the finance industry. The revolutionary

For a while there was no decentralized finance (DeFi) or crypto per se, but just Bitcoin. Acknowledged as the first blockchain protocol, Bitcoin allowed for the permissionless transfer of BTC without the need for any middlemen. That in itself was revolutionary, and soon inspired a Cambrian explosion of projects that

Introduction Fractional reserve banking is a system whereby banks are required to keep only a portion of the money deposited with them as reserves, that is, available for immediate withdrawals. Banks use the rest of the funds for lending new loans, paying interest on inter-bank loans and awarding existing deposits

A central part of the design of any crypto project is its token economics. Tokenomics (short for “token economics”) outline the logic of distribution and future supply of the token. Notably, tokenomics can be altered and voted upon by means of decentralized community governance. For instance, the community might decide

Introduction Until recently most projects in decentralized finance (DeFi) have focused on implementing conventional financial processes on the blockchain, whether that be lending, borrowing or saving. Projects such as Compound and Maker Protocol have for example established the logic of decentralized credits. Indeed, since credit scores are not yet available

Money is an economic unit that has taken on various forms throughout history but has generally served three main functions: store of value, unit of account, and medium of exchange. When nations established the right to issue money, a unified system of value exchange became possible using a government-issued currency.