Decentralized Finance (DeFi) Primitives (Coursera)

The mechanics of bonding curves are introduced. The course then explores the role of direct as well as indirect incentives in the DeFi system. We then analyze swaps or decentralized exchange. We begin by contrasting DEX with centralized exchange (e.g., Coinbase or Binance). The course details the mechanics of Automated Market Makers and provides a number of detailed examples. There is a discussion of impermanent loss as well as (legal) front-running. We end the course by exploring both collateralized and flash loans.

What You Will Learn

- Token design and NFTs

- Mechanics of supply adjustment

- Decentralized exchange

Syllabus

WEEK 1

Mechanics

The first module explores some key primitives such as how Ethereum transactions occur including the differences between externally owned accounts and contract accounts. We then explore fungible and non-fungible (NFT) tokens and miner extractable value.

WEEK 2

Supply and Ownership

The second module focuses on supply adjustment (minting and burning), the atomic nature of transactions in Ethereum, as well as incentives. The concept of a keeper in the Ethereum ecosystem is introduced.

WEEK 3

Loans and Swaps

The third module introduces decentralized exchange and explores in considerable detail Automated Market Makers. The module also introduces the idea of collateralized loans as well as uncollateralized flash loans.

WEEK 4

Joining the World of DeFi

The final module shows step-by-step how to set up a MetaMask wallet allowing the student to join the world of DeFi. The second part of the module conducts a deep dive into some of the key blockchain concepts such as digital signatures and consensus mechanisms (including Proof of Stake).