Summary

In this chapter, we learned about the different characteristics of DeFi and understood that decentralization is the key difference between DeFi and traditional financial solutions. We also went through the terminologies that will be mentioned frequently throughout the DeFi application development process. We learned that ERC-20 is the standard of fungible tokens on the Ethereum blockchain; we will build DeFi smart contracts that support ERC-20 tokens in this book. We also went through the various DeFi applications we will implement and briefly introduced the main use cases and how they work for these applications. This information will help you build a high-level view of DeFi applications.

Then, we explored some technical topics that will help us to build a DeFi application. We learned about the architecture of DeFi applications and went through various components, such as DeFi wallets, RPC endpoints, blockchain networks, and Oracle networks, and how they work together. Finally, this chapter explored a few popular vulnerabilities of DeFi applications and how to solve them.

In the next chapter, we will explore more techniques, tools, and libraries that will help us build DeFi applications. We will create a project for these applications and start to write code and learn how to use these tools to debug and test DeFi applications.