Introduction
All computer programs have room for improvement and upgrading. Therefore, most computer applications and software keep introducing new versions of the same program over the years. When it comes to Android, there is the latest 11th version which is also known as Red Velvet Cake.
In the same manner, cryptocurrencies, blockchains, and decentralized applications are also computer programs. It means that different developers introduce new versions and new types of decentralized apps. In this article, the readers are going to learn about the use cases and important characteristics of Cake DeFi.
What is DeFi?
Before moving on to the subject of Cake DeFi, it is important to understand what DeFi is first. DeFi is a portmanteau of two terms namely decentralized and finance. DeFi refers to all computer applications, software, and programs that enable decentralized financial options for their users.
It means that all blockchains that allow investors to trade cryptocurrencies in a decentralized manner are part of the DeFi ecosystem. DeFi ensures that the users can send and receive digital assets without the presence of any centralized financial supervisors such as governments or banks.
How does DeFi Work?
DeFi or decentralized finance can seem like a risky proposition since there are no banks or any other government authority to confirm these transactions. However, it is important to understand that all authentic DeFi platforms are completely secure and safe.
Rather than depending on any centralized or traditional payment verification channels, DeFi platforms depend on smart contracts. Smart contracts are automated algorithms that carry out a financial function when predetermined conditions are met.
Therefore, smart contracts are free from any prejudice and they do not serve the interests of a centralized financial authority. Since DeFi is independent and free from a traditional financial network, it also grants full freedom to investors over their financial history and transaction data. Another method that DeFi uses to verify transactions is consensus models. PoW blockchains allow miners to solve cryptic puzzles on every block to verify transactions on them. On the other hand, PoS blockchains select random node validators to verify the transaction by staking their cryptocurrency reserves.
What is Cake DeFi?
Cake DeFi is a decentralized finance application that is designed for allowing cryptocurrency investors to generate profits with their cryptocurrency reserves. The platform is known for setting a precedent for transparency and efficiency in the DeFi ecosystem.
The main reason that Cake DeFi has gained mainstream popularity is that it focuses on creating simple user interfaces. Therefore, it is also considered the ideal DeFi platform for uninitiated investors who are just getting started. Anyone who wishes to learn DeFi trading and staking can use the Cake DeFi application to their advantage.
Looking at Cake DeFi, it is clear that the decentralized applications for cryptocurrency investors will become more users friendly. At the same time, Cake DeFi is also a very secure network since it is a Bitcoin fork without any connection to the Ethereum network, unlike most new blockchain products. In this manner, Cake DeFi has been able to preserve and ensure its decentralized status without changing its intrinsic value.
Furthermore, the blockchain connected with Cake DeFi uses PoS consensus in contrast to PoW. It is another change that sets Cake DeFi apart from most decentralized finance platforms without compromising its security or transparency.
Origin of Cake DeFi
Cake DeFi is the brainchild of two developers namely Julian Hosp and U-Zyn Chua. The application made its public debut in 2019 and has since set a new benchmark for transparency in DeFi. Unlike traditional DeFi applications, Cake DeFi also has a native coin called DFI. It is interesting to note that Cake DeFi is powered by a dedicated blockchain called DeFi Chain.
It is also interesting to note that DeFi Chain is created from a Bitcoin blockchain fork. Therefore, it offers a massive amount of security for investors. However, unlike the Bitcoin blockchain, DeFi Chain employs the PoS (Proof-of-Stake) consensus model. Initially, DeFi Chain was a standalone project. However, later on, a Singapore-based DeFi application called Cake DeFi partnered with the project to operate as its decentralized finance operator.
How Does Cake DeFi Work?
When it comes to the technical infrastructure of Cake DeFi, it is clear that the developers have ingrained several important features. It is a portable mobile application that anyone with appropriate memory space and required processing speed can download. It allows investors to sell, purchase, stake, mine, and exchange cryptocurrencies. The most important characteristic of Cake DeFi is that it enables users to generate profits with their cryptocurrency reserves using services such as lending, staking, yield mining, and other options.
All the yield income created on Cake DeFi is distributed among the investors in the form of its native token called DFI Coin. Therefore, it also supports the DeFi Chain to maintain the demand and value of its native token. Considering its simplified user interface, aspiring cryptocurrency investors can adopt this application with a working knowledge of finance and investment. Furthermore, another important feature of Cake DeFi is that the application allows investors to purchase and access a wide array of DeFi tokens from different sources.
How to Use Cake DeFi?
Anyone who has already downloaded the Cake DeFi application and does not know how to use it should read this portion of the article. The first step to getting started is to create an account and learn how to connect a digital wallet address to transfer cryptocurrencies on the platform. Here are three main areas where the users can use some guidance and information:
Making Payments
Without depositing cryptocurrencies in the user account of Cake DeFi, it is not possible to make any transactions. Therefore, the first step for all users is to learn all the available options for making payments for acquiring cryptocurrencies on their Cake DeFi account. There are three different options available for the users for adding new DeFi tokens to their Cake DeFi wallets:
Fiat Purchases
Fiat purchases are the simplest and most prevalent method of purchasing new cryptocurrencies for user accounts. Anyone who has been making purchases online and possesses a VISA or MasterCard debit or credit is going to be very familiar with this process.
The users who are willing to add cryptocurrencies like Bitcoin, Ethereum, and DFI tokens can use money wire channels such as SEPA, bank transfer, Sofort, and iDEAL input for purchasing these cryptocurrencies from their Cake DeFi accounts.
Swap Exchanges
Swap exchange is also one of the most popular trading methods among experienced Cake DeFi users. Cryptocurrency investors who wish to generate an extra income stream have the option to swap or exchange one type of cryptocurrency for acquiring others. For allowing this crypto acquisition option, Cake DeFi has liquidity pools that users can access by the way of liquidity mining feature. However, it is ideal that the users first get familiar with the art of swapping tokens by Blockchain Council to get the best returns on their reserves.
Blockchain Transfer
Transferring cryptocurrencies using a track of different blockchains is also one of the available options for Cake DeFi users. The Cake DeFi users can choose a suitable track of digital wallet address on different blockchains based on the type of cryptocurrency. However, the users need to take the total gas fee into consideration first required to move cryptocurrencies from one blockchain to another.
Making Withdrawals
Once the cryptocurrency investors have added their preferred DeFi tokens to the Cake wallet, they can start generating income. However, the users need to learn about the method, terms, and conditions for making withdrawals beforehand. It is important to note that for different options such as staking, pool mining, and yield generation the withdrawal rules differ. Here are a few simple steps for making a withdrawal from the Cake DeFi account:
- For making a withdrawal, locate the baker hat button on the Cake DeFi application present on the upper right side.
- After clicking on the baker hat button, users can select the Balance option from the dropdown.
- In the same manner, the users can now see the option of Withdrawal available parallel to the total coins selection.
- Before making the withdrawal, users will get an option to fill in the correct address of the digital wallet first.
- Select the required amount of withdrawal cryptocurrencies next and hit Withdraw.
Pooling Assets
In addition to just holding cryptocurrencies, Cake DeFi goes a step further and allows investors generate income from their reserves. Here are two ways that anyone can start creating a yield from their cryptocurrency reserves on Cake DeFi:
Cryptocurrency Aggregation
The design of Cake DeFi enables investors to accumulate a massive amount of cryptocurrencies. It means that there is plenty of storage for cryptocurrencies for an individual basic account holder. Therefore, the users have the option to lend their massive cryptocurrency reserves to commercial and big enterprises. At the same time, there is also an alternate option for lending these cryptocurrency reserves to professional brokers and creating interest income in return.
Staking and Liquidity Mining
One of the most popular ways to generate an income with Cake DeFi is to use its Liquidity mining option. The platform also charges a small percentage of the yield income created from liquidity mining or staking.
On the other hand, the investors can also enroll in DeFi trading courses that grant them a DeFi certification upon graduation in exchange for a fee. Eventually, the techniques and skills learned from these courses allow the investors to increase their DeFi trading profits exponentially.
Key Features of Cake DeFi
When it comes to the success and usability of any DeFi application, it all depends on its features and characteristics. Here are some of the most important features and trading options on Cake DeFi that make it unique and useful for investors:
Cake DeFi platform is a place that fills so many purposes for cryptocurrency investors. The platform has partnered with services like BANXA and Transat. Through these partnerships, consumers can purchase coins like Bitcoin and Ethereum from their Cake DeFi accounts. There is also an option for using a credit card for making all cryptocurrency purchases on account of the presence of services like SEPA on Cake DeFi. Here are the steps to purchasing any cryptocurrency on the platform:
- Create an account on Cake DeFi and log in using your credentials and password.
- From the top right corner of the Cake, the app selects Buy Bitcoin or other cryptocurrency option.
- Choose the number of required Bitcoins or any other cryptocurrencies.
- Select the preferred payment method and transfer the newly purchased Bitcoin into the Cake DeFi wallet.
Lending and Borrowing
Another major feature of Cake DeFi is the presence of lending and borrowing services. Users who wish to do more than just purchase and hold cryptocurrencies can generate an additional income using this option. The lending service options become active for individual investors every week. The minimum lending period allowed is 28 days. Additionally, the lending capabilities on the network are secure and guaranteed.
There is also an option for locking the cryptocurrency asses into options contracts for a month. The advantage for lenders is that they should not pay any fees on lending assets. After the lending period for the options contract is done the lender has the following 3 options at their disposal:
- Starting another batch of lending for getting the benefits of compound interest income.
- Withdrawing the interest income generated from the first cryptocurrency asset returns.
- Withdrawing the whole cryptocurrency batch and interest income in the first lending batch.
Staking Options
Staking on Cake DeFi has many other options. The platform can provide support for some other cryptocurrency tokens such as DASH in addition to its native coin DFI. Important to note that DeFi Chain uses the PoS consensus model which means that it can allow node validators to stake their cryptocurrencies for transaction verification.
The users who are staking their tokens for node validators automatically qualify for rewards like miners in the PoW blockchain. The interesting feature of Cake DeFi is that there is no minimum limit for staking. Additionally, the investors can opt in or out of a staking position at any time they want and are free from any pledging period.
Liquidity Mining
Another way to generate income from cryptocurrency reserves present on Cake DeFi is by contributing to the liquidity pool. The process is called liquidity mining, and the users on Cake DeFi can commit their DeFi coins on several DEX.
Rather than going through several difficult steps and changing many blockchains, the Cake DeFi application has a one-click option for an investor who wishes to seek different liquidity pools. The users can pick on the decentralized liquidity pools listed on the Cake DeFi application and start creating income without delay or hassle.
Cake Freezer
A freezer is a program that automatically checks the number of times users have pledged their cryptocurrency reserves on the Cake DeFi application. In addition to holding cryptocurrencies in the Cake DeFi wallet, the investors can also qualify for freezer rewards while participating in staking and liquidity mining. The main objective of this smart contract is to encourage the investors to increase loyalty and increase their commitment durations.
When a user can create enough Freezer income, they are not paid at first. On the contrary, investors can enjoy perks like getting an 85% discount on all transaction fees. The users can also commit their token for a specified duration of 5 to 10 years on Cake DeFi. When users pick a specified duration for committing their tokens, their cryptocurrency reserves are locked on the DeFi Chain. The users are unable to access their crypto reserves but for the specified duration, they can generate double staking rewards by pledging their savings.
DeFi Tokens on Cake
One of the most important features for trained cryptocurrency investors on Cake DeFi is access to a wide array of decentralized tokens. Investors who are trying to create a diversified DeFi portfolio can also gain access to currencies like dTSLA for staking and liquidity mining.
It is worth noting that several decentralized tokens are created by the blockchain DeFi Chain. Interested investors can find the best-decentralized tokens to invest in based on the supply and demand readings at the time. At the same time, many decentralized tokens are also mirroring the spot prices of their counterparts in the real world.
Conclusion
Cake DeFi is a good example of how cryptocurrency and DeFi platforms are evolving. The highlight of this platform is that it takes all the good features from its predecessors and generates a platform that is useful and offers massive security for users.
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