Video

New Use Cases of DeFi Tokens | Uniswap, Gitcoin, DAI

DeFi - July 14, 2021

Video Overview

In order to use DeFi tokens are essential. Some of these tokens have specific but revolutionary use cases. Tokens like $UNI, $SUSHI, $GITCOIN, and more are creating new use cases. In this video, we break down how DeFi is changing the way tokens are being used in the new age of finance and technology.

Bitcoin contains just one use case. It is a peer-to-peer electronic cash system. With Ethereum, this use-case was expanded. This is because Ethereum allowed the creation of a world of potential using blockchain technology. A product of this is decentralized finance or DeFi.

DeFi is unlocking so much potential in the finance world. This is governed because of tokens. But each token has a different use case. Some are pure governance tokens. These are used to maintain treasuries, keep up operations, and more. Some are utility tokens. These are meant to perform functions like back assets, take loans, and more.

DeFi: Uniswap

Each token has its own use case. From governance to utility, even rewarding developers. Protocols like Uniswap create automated liquidity through constant market makers on Ethereum. This decreases the need for intermediaries because it allows for quick transfer of value between cryptocurrencies. All of this is managed by the UNI token.

DeFi: Uniswap

In the video, we also talk about Gitcoin. Gitcoin is a grant protocol that encourages and even funds open-source product and service development. Gitcoin connects programmers and projects that are in demand. The demand here is measured by how many people want a project to be sold, not the few big hands behind it. 

All projects are open-source solution (OSS) projects. Gitcoin also has a matching function, sot that funds given by the public are matched through Gitcoin Grants. This is governed by the Gitcoin DAO, using the governance token GTC. The DAO consists of Gitcoin community members who decide which public goods (OSS projects) receive the funds.

GTC has no direct financial value or claim. This is because it is a governance token to oversee Gitcoin DAO and the Gitcoin protocol.

Like UNI and GITCOIN, there are several tokens each with a specific use case. This is what we’ll see more of in DeFi. No longer will we have tokens with a limited scope. Only meant for arbitrary value with no utility or governance feature. Tokens can be designed for anything. Using blockchain, it can be made more composable and usable. That is the power of DeFi.

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