Energi (NRG) Takes a Big Step Towards DeFi Space
Energy cryptocurrency is a fork of the Vash cryptocurrency, which appeared on April 14, 2018. She focuses on empowering to bring dApps and cryptocurrencies to her platform with a focus on trust, awareness, usability, and accessibility.
The platform has a self-financing system that will eventually turn into a profitable smart contact platform. The continuous emission of coins ensures the long-term development of the technological platform and the treasury system.
Energi plans to create an incubator program to support infrastructure blockchain startups. This program will finance high-quality projects with long-term commitment. Developers will provide advice, ensure that economic and business models are correct, and encourage these projects.
DeFi and cryptocurrency
They are not the same thing. Cryptocurrency and DeFi are separate areas of the cryptocurrency industry. DeFi applications use both the cryptocurrencies themselves and the blockchain technology on which they are based.
DeFi Apps are a tool for working with cryptocurrency. They provide new opportunities for using cryptocurrency and making money on it. Different types of decentralized finance provide different opportunities for working with cryptocurrency. For example:
- using credit applications;
- users take loans against her collateral and send cryptocurrency deposits, using exchange applications they trade her directly from the wallet.
Let’s draw an analogy with fiat currencies and banks:
- Fiat currencies are used by banks;
- Banks are expanding the use of fiat currencies;
- With their help, you can take loans, make money on deposits, exchange one currency for another;
- While banks and fiat currencies are not the same thing, they are part of the banking system.
How cryptocurrency is used in DeFI
DeFi applications use not only cryptocurrency but also tokens. With the help of cryptocurrency, users are starting to use decentralized finance. They buy tokens for it, take loans against it, and make cryptocurrency deposits.
Another important use of cryptocurrency in DeFi is paying commissions. They are debited when performing actions in the application, for example, exchanging one token for another. There is no other way to confirm actions in the blockchain. These fees are paid in the blockchain cryptocurrency. Therefore, it will be needed even if you only use tokens in the application.
Since most DeFi projects run on Ethereum, applications use ETH cryptocurrency and ERC20 tokens.
In response to actions, applications issue tokens. For example, you take a loan in tokens, exchange cryptocurrency for them, and receive in exchange for a deposit. Tokens provide more options for working with DeFi. With their help, users participate in profitable farming and application management, create derivatives. In addition to working with new elements of decentralized finance, token holders have access to deposits and loans on more diverse terms.
Let’s say you are going to another country. Before leaving, you change your native currency to foreign currency in order to pay for goods and services there. If you additionally apply for a bank card from another country, you will be able to use local online stores. So it is with DeFi. You buy cryptocurrency, for example, btc to nrg to use DeFi applications. And if you use tokens, you will get more opportunities to work with them.
