The term “defi” originated in 2018 during a telegram chat between Ethereum developers and entrepreneurs, Inje Yeo of Set Protocol, Blake Henderson and Brendon Forster who were brainstorming to come up with a name for the concept.
Avalanche seems to be the fastest smart contracts platform according to time-to-finality.
Thank you for your summarized answer. Cannot add anything extra, except Pancakeswap which “jak” has mentioned below.
This blog post https://medium.com/wtf-dao/story-of-defi-how-it-started-where-it-stands-now-defi-definition-revisited-628fc3bab308
suggests that DeFi originated from a group of startups in San Francisco (Set Protocol, DyDx, Dharma and 0x) who were working on common topics and decided to create an open community to exchange ideas. Team members of those startups brainstormed on a telegram channel and eventually agreed on the term ‘DeFi’.
One platform that could be mentioned is Shapeshift by Erik Voorhees. From a user experience point of view, you could say it was an ancestor of DEXes. It was available as early as 2017. While not decentralised, the user experience of “doing a swap” (connecting to a website without login, send for instance BTC to an address and receive DASH on another one) was a primitive version of what is now done on decentralised exchanges.
1.Where did the term DeFi originate? Be as detailed in your explanation as you’d like
The term “DeFi” is often credited to a telegram chat between Ethereum developers in 2018 where it became a common term to refer to the industry.
A lot of “DeFi” history only focused on 2008/2009 and beyond with the launch of Bitcoin, but there were several key events dating back to 1983 where theories were published and eventually led to today’s blockchain and cryptographic implementation. However, one major topic I am a bit surprised wasn’t captured in the video was the L2 release of Bitcoins Lightning Network. After attending a conference and playing with Sats, it really is trying to aim to transact like common fiat, especially like credit cards and allow people to use bitcoin like real money, just with SATS.
So a key event might be to add that Bitcoin’s lightning network was proposed in 2016 and entered into Bitcoin’s Mainnet in 2018, steadily increasing speed of transactions and increasing Bitcoins utility as a common currency for everyday purchases.
While it is difficult to pinpoint the exact origin of the term “DeFi,” it is likely that it emerged as a shorthand way to refer to the growing ecosystem of decentralized financial services and applications that were being developed on blockchain technology. As the DeFi ecosystem has grown and evolved over the years, the term “DeFi” has become widely used and recognized within the blockchain and cryptocurrency communities.
- Where did the term Defi originate? Be as detailed in your explanation as you’d like
It’s believed that Ethereum developers first coined the term during a Telegram chat in August 2018.
Find an important event or protocol that I didn’t mention, but that you think is important to be recorded in the history of Defi. Then explain why it should be included and check out what other community members have added. None of us are as smart as all of us so let’s work together on this.
I recently came across a protocol called Hashflow, launched probably in early 2022. Hashflow is an exchange for market makers, more than just users.
I find this protocol pretty interesting. How do you guys feel about it? 
Created by eth developers and entrepreneurs who wanted to open up the financial system
Essentially with the creation of BTC we got DeFi. But not the term itself. That came later from Ethereum devs.
Obviously AAVE is huge with 6,3 billion dollars of locked liquidity at time of writing.
1 It was Maker DAO that coined the term DeFi. The company described DeFi as a emerging decentralized financial ecosystem that was built on the Ethereum Blockchain. The goal was to create a platform that would enable users to access financial services without relying on middlemen.Some ot these services are lending, borrowing and trading without a central authority.
2 So it early 2023 and one thing that comes to mind is in 2022. Alot of centralized exchanges and businesses went insolvent where many crypto adopters were affected. This lost the trust of a majority of retail and vcs. In my opinion I think that a good majority will move to DeFi becasue code seems to be more trustworthy than centralized companies from what happend last year in 2022.
Where did the term DeFi originate? Be as detailed in your explanation as you’d like
Launch of bitcoin in 2009 the first p2p digital asset built on top of the blockchain network. Bitcoin made it possible to envision a transformation in the traditional financial world. But Ethereum launched in 2015 second generation blockchain with smart contracts and let developers create token on top of Ethereum ecosystem to help build Defi products.
Find an important event or protocol that I didn’t mention, but you think is important to be recorded in the history of DeFi. Then explain why it should be included and check out what other community members have added. None of us are as smart as all of us so let’s work together on this.
In November 8 a potential rescue deal with binance fell apart. FTX/ Alameda declared bankruptcy. After 8 billion of customers funds mysteriously went missing. Customer started to withdraw from FTX, after SBF admitted the company didn’t have sufficient assets in reserve to meet customer demand. SBF frauded customer/ lenders and financial institutions, used the money for midterm elections other personal investments and loans. Reason why we should learn from this. CEFI hold your private key/ wallet that you don’t have control assets. This is called a host wallet.
Defi is short form for decentralised finance. Defi was made possible by peer to peer tools on smart contract blockchains like Ethereum where digital tokens can be collateralised for loans in other tokens or fiat. This led to further innovation in NFT applications for tokenisaiton of assets. Derivative contracts are another application that emerged on Defi. At the heart of Defi is the management of liquidity pools and automated market making. All of these tools make for the decentralisation and disintermediation of centralised financial services (Cefi).
The antelope ecosystem and in particular the Telos blockchain offers sophisticated smart contract capacity and robust build capability for native applications and both Defi and EVM applications.
1.DeFi is a shortening of the term Decentralized Finance
An important protocol was Luna, before it collapsed in 2022.
UST was an algorithmic stablecoin. To create UST you had to burn Luna, and for UST to retain its peg, one UST could be changed for $1 worth of Luna at any time. On May 7, over $2 billion worth of UST was unstaked, and hundreds of millions of it were quickly liquidated. The huge sell-offs brought down the price of UST to $0.91, from $1. As a result, traders started to change 90 cents worth of UST for $1 of Luna. This was a huge arbitrage opportunity, after all. More and more people sold off UST for Luna, which led to the minting of more Luna and an increase in the circulating supply of Luna, driving down the price of Luna itself.
The Luna collapse was a massive event in 2022. When the Luna ecosystem collapsed, it’s estimated that $60 billion got wiped out of the digital currency space.
Open finance—or decentralized finance—refers to the paradigm shift from today’s closed financial system towards an open financial economy based on open protocols that are interoperable, programmable, and composable.
One could point to the launch of Bitcoin in 2009 as the beginning of the DeFi movement.
Bitcoin popularized the idea of decentralized tokens and related services like exchanges. However, the Bitcoin ecosystem is not built to enable DeFi protocols. Those rely instead on Ethereum (which is of course also indebted to Bitcoin for its own existence).
Therefor DeFi (which is defined as an eco-system compromised of decentral applications called dapps on top of blockchain systems) owes its existence to the launch of the Ethereum blockchain in 2015 and the rise of smart contracts.
A well-known DeFi protocol, such as MakerDAO was in development as early as 2014 however required the Ethereum blockchain to launch first to allow it to function correctly.
Decentralized exchanges like EtherDelta emerged in 2017 alongside ICOs. In contrast to EtherDelta. Uniswap was published to the Ethereum main net in 2018 and is one of the most important projects in the DeFi space to have been launched to date, Uniswap was built on the concept of liquidity pools and automated market makers.
Protocol developers began to adapt the peer-to-peer focus of the DeFi movement to one relying more on pooled funds. This might be thought of as a “user-to-contract” approach, since users would no longer directly interact with other users but rather would engage with smart contracts themselves.
In July 2019, another important event happened. Synthetix launched the first liquidity incentive program – a mechanism that later became one of the key catalysts for the DeFi Summer of 2020.
Compound launched setting the stage for new approaches to protocol governance and new incentive systems with the release of the COMP token in 2020 and ever since DeFi 2020 summer and subsequent winter that ensued, new protocols have continued to launch, particularly on non-Ethereum blockchains.
The majority of DeFi projects are open-source, meaning that code is easily accessible via GitHub for inspection both by well-intentioned and malicious users. If wrongdoers find bugs first, they can steal other users’ funds.
Besides bugs in code, DeFi applications are vulnerable to external exploits as well. DeFi’s efficiency mostly depends on composability, meaning that the more projects that are interconnected, the more value they can provide. Hence, exploiters can game the system and cause protocols to behave in ways not intended by developers.
The irreversibility of blockchain transactions exacerbates the situation. If hacks occur, funds are likely lost for good, though some projects will reimburse users from their pockets.
There are over a dozen hacks and exploits within the DeFi space ever since the DeFi summer of 2020 and beyond. A very notable hack as of very recent in 2022 is the; Binance-linked blockchain hack which was hit by a $570 million crypto hack
The tokens were stolen from a blockchain “bridge” used in the BNB Chain, known as the Binance Smart Chain.
Blockchain bridges are tools used to transfer cryptocurrencies between different applications. Criminals have increasingly targeted them, with over $2 billion stolen in more than 13 different hacks, since 2022.
BNB Chain supports BNB Coin, which is the world’s fourth-largest token with a market value of over $32 billion.
The hacker had minted 2 million new BNB tokens before transferring most of the funds to other cryptocurrencies including Tether and USD Coin.
BNB Chain suspended its blockchain for several hours and was “able to stop the incident from spreading” by contacting the blockchain’s “validators,” – whom are entities or individuals who verify blockchain transactions. Binance stated there were 44 validators across several different time zones.
BNB Chain, described by Binance as a “community-driven, open-sourced and decentralized ecosystem,” said it would introduce a new “governance mechanism” to counter future hacks, as well as expand the number of validators.
In March 2022, hackers stole around $615 million from a blockchain bridge called Ronin Bridge, in one of the largest crypto heists on record, linked by the United States to North Korean hackers.
I believe these hack-events amongst other well-known hacks such as the Harvest-Hack where the attacker used flash loans to manipulate stable coin prices. Should be included and be well known about within the DeFi space in order to not only learn from present mistakes already made, but also to ensure these new protocols launched go through various rigorous auditing of their code; even though, security audits don’t guarantee that a project is infallible, rather instead, they are utilized to guarantee that the security of the given codebase is of high standard. Along with increased auditing requirements with the knowledge of these hacks, new “governance mechanisms” can also be created to counter future hacks,
August 2018 Telegram chat between Ethereum developers and entrepreneurs including Inje Yeo of Set Protocol, Blake Henderson of 0x and Brendan Forster of Dharma
Curve or Uniswap V3 on polygon could be somthing to add or tals about
Where did the term DeFi originate? From ZeroX team.
DeFi as a term was coined by the 0x team.
The creation of the Ethereum blockchain made DeFi possible.
More recently, history was made when Richard Heart copied the Ethereum blockchain ~and~ its states, to create PulseChain. PulseChain is a mirror image of Ethereum, including all coins/tokens (except ETH) you have on the Ethereum blockchain. They are duplicated on PulseChain and many of the projects are beginning to be migrated to Pulsechain. Comparing Gas fees to the Ethereum chain, PulseChain makes every transaction much more affordable.
Term DeFi originated from Decentralized finance. It can be traced to Bitcoin whitepaper in 2009 which talks about Protocols taking over money control. There was a contest with the term open finance, but Decentralized prevailed. The term evolved with more protocols like Ethereum reinforcing this concept of no single authority.
Not sure whether it was there in 2022 but there were memecoins like dodgecoins. they added color to the market with some celebrity effect.