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 Building Full Stack DeFi Applications

Building Full Stack DeFi Applications

By : Zhou
4.6 (5)
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 Building Full Stack DeFi Applications

Building Full Stack DeFi Applications

4.6 (5)
By: Zhou

Overview of this book

Enter the world of Decentralized Finance (DeFi) with Building Full Stack DeFi Applications. Understand how this blockchain-based financial technology, designed to manage crypto assets, runs independently without centralized financial institutions like banks and brokerages, eliminating the fees that banks and other financial companies charge for using their services. This book will show you how DeFi solutions are built with smart contracts running on blockchains and how they allow users to gain and earn crypto assets based on the trust of the smart contracts. This book uncovers the inner workings of DeFi by guiding you through the mathematical foundations and teaching you how to build real-world DeFi products with Solidity and JavaScript. As you progress through the chapters, you’ll learn how to implement smart contracts of liquidity pools to trade cryptocurrencies and implement staking, including farming features that allow users to earn. You’ll also find out how to create asset pools that allow users to lend and borrow cryptocurrencies and generate interest. Additionally, you’ll discover how to use Web3 libraries to build the frontend of DeFi products. By the end of this book, you’ll will be well acquainted with popular tools, libraries, and design patterns for implementing a full-stack DeFi application with Web3 and Solidity.
Table of Contents (21 chapters)
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1
Part 1: Introduction to DeFi Application Development
5
Part 2: Design and Implementation of a DeFi Application for Trading Cryptos
11
Part 3: Building a DeFi Application for Staking and Yield Farming
14
Part 4: Building a Crypto Loan App for Lending and Borrowing

The mathematics of AMMs

AMMs are a type of DEX that rely on mathematical formulas to set the price of a token. The trading process and determination of the price are done automatically without depending on other traders.

As we discussed previously, the concept of liquidity pool plays the most important role for AMMs. An liquidity pool typically consists of two or more types of crypto assets. Here, we want to introduce the term relation function of a liquidity pool. We will walk through the concept to understand how liquidity pools work.

Relation functions

A liquidity pool usually has a formula to define the relations and constraints of assets (there could be two or more assets in the liquidity pool). Here, we relation functions come into scope.

A relation function of the types of assets in liquidity pools defines how the specific AMM works. A relation function defines the conditions the reserves of all types of assets in a liquidity pool must satisfy. The market makers...

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