DeFi & Web3
6 guides and tools on defi & web3.
Lending protocols, decentralised exchanges, stablecoins, NFTs and layer 2 networks, with their real risks stated rather than skipped.
What Is DeFi? Decentralised Finance Explained
DeFi rebuilds lending, trading and derivatives as public software. That removes the intermediary and replaces it with code that cannot …
DeFi & Web3Stablecoins: How They Work and How They Fail
A stablecoin is a promise. The interesting question is always who is making it and what stands behind it.…
DeFi & Web3Impermanent Loss Explained
The name is badly chosen. The loss becomes permanent the moment you withdraw, and it is the main reason liquidity provision underperfor…
DeFi & Web3Layer 2 Networks Explained
Layer 2s exist because a blockchain that every participant must verify cannot also process thousands of transactions per second. The fi…
DeFi & Web3NFTs Explained Without the Hype
An NFT is a database entry proving which address controls a unique token. What that token points at, and what rights come with it, is a…
DeFi & Web3Crypto Airdrops: How They Work and What They Cost
Airdrops are marketing, not gifts. Understanding what the project is buying with them explains most of how they work.…
About this section
Decentralised finance rebuilds lending, trading and derivatives as public software that anyone can inspect and call. Removing the intermediary removes the margin it charged, and it also removes every form of recourse that intermediary provided: no chargeback, no regulator, no support desk, no reversal.
The risks here are specific and worth naming rather than generalising. Smart contract code is immutable, so a bug is permanent unless an upgrade mechanism exists — and if one exists, someone holds the key to change the rules. Price oracles can be manipulated within a single transaction using borrowed capital. Bridges between chains have produced the largest individual losses in the sector's history. Protocols build on each other, so a failure in one propagates into others in ways nobody modelled.
Advertised yields deserve particular scepticism, and the analytical question is always the same: where does this yield come from? Genuine fee revenue is sustainable and usually modest. Token emissions produce enormous headline rates paid in an asset whose price the emissions themselves undermine. Yield funded by new deposits is a Ponzi structure whatever it is called.
The guides here explain the building blocks, the mechanics of impermanent loss with the actual numbers, how stablecoins hold a peg and the specific ways each design has broken, and what layer 2 networks are genuinely doing.