"organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government. A DAO's financial transaction record and program rules are maintained on a blockchain."When implemented well, a DAO allows for real-world experiments in decentralized democratic organization and control, with more freedom of action and less regulatory oversight for DAO controlled projects and products when compared to legacy corporate structures and organizations.
Derivatives can be used to hedge a position, speculate on the directional movement of an underlying asset, or give leverage to holdings. Their value comes from the fluctuations of the values of the underlying asset. Originally, derivatives were used to ensure balanced exchange rates for goods traded internationally.In DeFi, since 2020 there now exists a crypto derivative that is a new type of investment or asset class. This crypto derivative is a representation of an underlying digital base asset such as Ethereum, Dai, Curve.
Fiat money is a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.It usually requires fiat exchanged at a CEX or through local means such as Bitcoin ATMs to be able to purchase cryptocurrency with fiat currency.
In the context of cryptocurrencies, forced liquidation happens when the investor or trader is unable to fulfill the margin requirements for a leveraged position. The concept of liquidation applies to both futures and margin trading.
a large organization, such as a bank, pension fund, labor union, or insurance company, that makes substantial investments on the stock exchange.In CeFi & DeFi, traditional institutional investors have an easier on-ramp into cryptocurrency should they seek higher yields albeit at higher risks.