Week 3 of SheFi: What the Fi is DeFi - and why it might just be the future of finance
From blockchains to trading floors — and why accessibility is the whole point
Omowonuola4 min read·Just now--
Apologies for the slight delay on this one - I took a little break to go skiing in Norway 🎿 but we are back on schedule now!
Decentralized finance, trading tokens and why accessibility is the whole point
If Week 1 was about the blockchain and Week 2 was about wallets, Week 3 felt like the moment everything started connecting. Two topics this week - DeFi and trading tokens - and honestly? One theme kept coming up throughout: accessibility.
We started with affirmations as always. This week we were visioning ourselves as experts in Web3 - thinking about the next role we want to be in, the successes we would have and the skills we would need to get there. I am always here for that kind of energy.
So, what the Fi is DeFi?
DeFi stands for Decentralized Finance. Think of everything your bank does – saving, borrowing, lending, earning interest. DeFi does all of that, but without the middleman. No humans involved, just smart contracts – basically code that runs automatically when certain conditions are met.
What does that look like in practice? No waiting around for a human to approve your transaction. The smart contract handles it, and once the network validates it via consensus (remember Week 1? 😄), it is done. Unlike a bank where some transactions can take days – or sometimes get flagged – with DeFi the code just does the work.
It is also more transparent. Everything runs on the blockchain, so it is all visible and verifiable. And because DeFi runs across a whole network of computers rather than one central server, there is no single point of failure. More resilient, more robust. Not perfect – bugs and congestion can still cause issues – but significantly better than a bank going down on a Friday afternoon.
But the big one for me? Accessibility. With a bank you need an address, a credit history, you need to be in a country where that bank even operates. With DeFi? All you need is internet access. Anyone, anywhere, can save, borrow, lend, earn and trade. That is kind of huge.
Okay but how do you actually trade?
So now we know what DeFi is – but how does trading actually work in this world? That is where the second half of the lesson came in, and there was a lot to take in!
Trading happens on exchanges. In the crypto world there are CEXs (centralized exchanges, like Coinbase) and DEXs (decentralized exchanges – no middleman, peer to peer). We focused a lot on DEXs. Here is some of what we covered:
- Order books: a list of all current buy and sell offers for a token. A trade only happens when the two prices match. Same as how it works in traditional finance.
- Liquidity: How easy it is to buy or sell something. A cheap token might look like a bargain, but if not many people are trading it, you might struggle to sell it later. Liquidity matters more than the price tag.
- Slippage: The actual price that lands in your wallet ends up lower than what you expected when you made the trade.
- Gas fees: The fees paid to validators for processing your transaction on the blockchain.
- Automated Market Makers (AMMs): Instead of being matched with another person to trade, you trade directly against a liquidity pool using a formula. The more people buy, the higher the price goes. No middleman, no waiting.
With a DEX, you can buy a fraction of a token – no minimums, no barriers. Anyone can participate. That is the whole point.
We also got a live demo on the Base app and some of the apps within it – including Bankr, where you can literally just speak to it and it will make the trade for you. Wild!
Not all tokens are created equal
Because anyone can create a token on a DEX, some exchanges vet tokens before listing them - which means significantly fewer tokens but a lot more trust. Others list everything. Worth knowing before you dive in.
Maggie also shared some loose suggestions - not rules, just food for thought - on the types of tokens to consider depending on where you are in your crypto journey.
Four broad approaches:
- The Majors - BTC, ETH, SOL. The big, established ones.
- The Zeitgeist - Using USDC to buy into a movement. Something you have spotted on social media, done your research on, and believe in.
- The Culture era - Memecoins. Less about profit, more about participation and being part of something.
- The Conviction approach - Fewer trades, planned exits. One token you know inside and out.
How Week 3 felt
Still inspired, still enjoying it. I do not think anything has quite matched the energy of Week 1 yet - that first spark was something else. But every week builds on the last and it is all starting to click.
What’s next
Week 4 is all about staking - I cannot wait. As for my blockchain project, I have parked it until the course is done so I can give it the attention it deserves. But the idea is growing. Watch this space. 👀
I’ll be sharing one of these every week — follow along on X or connect with me on LinkedIn.
Happy learning! 🚀
