Blockchain Course 6: DeFi PancakeSwap Edition
In the ever-evolving world of decentralized finance (DeFi), groundbreaking collaborations are not just welcome – they are essential. This pivotal moment marks the integration of wROSE, the native token of the Oasis Network, into PancakeSwap, one of the leading decentralized exchanges (DEXs). Facilitated by Celer Network’s cBridge, this integration is more than just a technical feat; it’s a testament to the power of collaboration in the DeFi space. In this article, we will explore the significance of this partnership, its implications for users, and how it’s setting a new precedent for future collaborations in the DeFi ecosystem.
The integration of wROSE into PancakeSwap is not just a routine update in the DeFi world; it’s a strategic move with significant implications. wROSE, as the native token of the innovative Oasis Network, brings with it unique privacy features and a robust, scalable architecture. This integration into PancakeSwap, a platform renowned for its user-friendly interface and wide array of trading pairs, signifies a new chapter in DeFi’s accessibility and functionality. Users of PancakeSwap can now trade wROSE, broadening their investment horizons and taking advantage of the unique benefits that the Oasis Network offers.
We have talked about DeFi in the past, but we can go over it again in more simpler terms and follow up with a PancakeSwap simple to understand tutorial.
First, what is centralized finance?
Centralized Finance (CeFi):
- Central Authority: In a traditional or centralized financial system, there’s usually a central authority like a bank, government, or financial institution that oversees and controls transactions. Examples are like Bank of America, FDIC, Deutsche Bank, etc.
- Intermediaries: Transactions often involve intermediaries, such as banks or financial institutions, which play a role in facilitating and verifying transactions.
- Control: The central authority has control over the rules, policies, and access to financial services. Users typically need to trust this central entity to manage their assets and information.
- Access Restrictions: Access to financial services can be limited based on geographical location, identity, or other factors.
Imagine a clubhouse where there’s a wise clubhouse leader (central authority), and this leader is in charge of all the trades and decisions. The leader decides the rules for trading toys, snacks, and stickers. If you want to trade something, you have to ask the leader for permission, and they keep a big book (centralized database) where they record all the trades.
In this clubhouse, there are also trusted assistants (intermediaries like banks) who help facilitate trades and make sure everyone follows the rules set by the leader. If there’s a disagreement, the leader or the assistants can step in to resolve it.
While it’s a secure and organized clubhouse, everyone relies on the leader and the assistants to keep things running smoothly. However, the leader and the assistants have a lot of control over how the clubhouse operates, and some decisions may take time because they need approval from the top.
So, centralized finance (CeFi) is like having a clubhouse with a strong leader and trusted assistants who make sure everything is fair and follows the rules, but everyone depends on them to keep the clubhouse in order.
Decentralized Finance (DeFi):
- No Central Authority: DeFi operates on a decentralized network, utilizing blockchain technology. There is no single central authority controlling the entire system.
- Peer-to-Peer Transactions: Transactions are facilitated directly between users through smart contracts, eliminating the need for intermediaries. Smart contracts are self-executing contracts with the terms of the agreement directly written into code.
- User Empowerment: Users have more control over their assets and financial activities. They don’t need to rely on a central authority to manage their funds.
- Global Access: DeFi platforms are often accessible to anyone with an internet connection, providing financial services on a global scale. This can be especially beneficial for people in regions with limited access to traditional financial services.
- Transparency:All transactions are recorded on the blockchain, providing transparency and immutability. Users can verify transactions without relying on a central authority.
In essence, the key difference lies in the centralization versus decentralization of control and the use of blockchain technology to enable trustless, peer-to-peer transactions in the case of DeFi. Decentralized finance aims to create a more open, inclusive, and transparent financial system by leveraging the principles of blockchain and smart contracts.
Imagine you have a clubhouse with your friends where you trade toys, snacks, and stickers. In a regular clubhouse, there’s usually someone in charge, like the clubhouse leader, who decides the rules and keeps track of all the trades.
Now, let’s say you and your friends decide to create a magical clubhouse where everyone gets a say in how things work. No one person is in charge. Instead, you use special math rules and a big shared notebook (blockchain) to keep track of all the trades and who has what.
In this magical clubhouse, there are also special machines (smart contracts) that automatically follow the rules you and your friends agreed upon. These machines help you trade toys or snacks without needing a clubhouse leader to approve everything.
So, decentralized finance (DeFi) is like having a clubhouse where everyone has a voice, and there’s no central leader. The rules are written in a special book (blockchain), and smart machines (smart contracts) help everyone trade and play fair without relying on just one person.
It’s like a magical, community-powered clubhouse for trading and playing together!
OK Great! Now that we have refreshed our memoty regarding DeFi, let’s try it out with PancakeSwap using wRose and USDC.
Go to https://pancakeswap.finance/ and connect your wallet! We’ll use MetaMask for this example
Next we need to get some wRose so I went to celer bridge here: https://cbridge.celer.network/
Use your Rose from Sapphire
TaDa! Now you can swap your Rose directly to USDC using pancake swap! You will need some BNB for gas but that’s it!
The integration of wROSE into PancakeSwap, powered by Celer’s cBridge, is a significant milestone in the DeFi universe. It exemplifies how strategic alliances can reshape the landscape, offering enhanced opportunities and experiences to users. This collaboration marks a step forward in achieving a more interconnected, versatile, and user-friendly DeFi ecosystem. As we witness these innovations unfold, it becomes clear that the future of decentralized finance hinges on such pioneering partnerships and technological advancements. The Oasis Network, PancakeSwap, and Celer Network have set a precedent, paving the way for future collaborations that could further revolutionize the world of DeFi.