Introduction to Blockchains

By
Prof. Rajhans Mishra
 The Beginning Argument
• Blockchain as a concept was there before Bitcoin as well
• Bitcoin gave the first practical use case
• Satoshi Nakamoto ( pseudonym) on October 31, 2008, that set the basic
structure of the Bitcoin network.
• Paper Titled : Bitcoin: A Peer-to-Peer Electronic Cash System
• https://bitcoin.org/bitcoin.pdf
• A set of ecosystem without relying on Trust
• Shared Public Ledger (Distributed ledger)
• There are many use cases beyond Cryptocurrencies possible for Blockchain
• Difference between Digital currency(Payments) and Bitcoins (Cryptographic
currency)
Continued…
• Motivation for anything like Bitcoin
• P2P (Payment without intervention)
• No Intermediary ( Low transaction fee)
• Quick for settlement
• Easy to pay ( like sending the emails)
• Its all on the basis of predefined system driven Algos
• Transparency on Transaction
• Central Bank Digital Currency (CBDC)
Bitcoins
• Hashing, Blockchain and Cryptography are the basic building blocks
• Permissionless (v/s Permissioned)
• Intrinsic Value ?
• Volatility / trading
• Bitcoins are fungible
• Turing incomplete
• Reward for mining (why?)
Bitcoin Volatility

Date: 31/01/2023
Bitcoin – All Time High
Bitcoin Pizza Day
• First Bitcoin Transaction for Buying something:
• 22nd May 2010 : To Buy two Pizza from a local store
• Paid : 10, 000 Bitcoins
• May 22 is called as Bitcoin Pizza Day

• https://www.ndtv.com/business/the-first-bitcoin-transaction-was-for-buying-
pizzas-more-interesting-tidbits-inside-2512643
• https://www.businesstoday.in/crypto/story/two-pizzas-for-rs-2260-crores-12-
years-of-the-bitcoin-pizza-day-334204-2022-05-19
How Blockchains Work?
 Continued..

• Block Contains the Data (Transactions) and hash of

previous block’s data (a simplified view) Hashing
• Hash of Data is equivalent to its Digital Fingerprint Data
• Blockchain starts with Genesis block (First Block) and
further blocks are added to containing new transactions
• Each Block is linked (Cryptographically with the help of
Hash Function) to the previous block.
• Thus, a chain of connected blockchains are created
What is Hashing ?
• Mapping the input data to some prespecified value with the help of
Hash Function
• Mapping is One to One
• It encode the given data to the prespecified values
• Backbone for Blockchain validation (Message Integrity)
• SHA-256 is used in Bitcoin
Hash (SHA-256)
• SHA-256 is used (in Bitcoin)
• 2256 =1077(approx.) possible values
• (24) 64 values = 64 hexadecimal characters (around 4 Billion values)
• One side blind
• One to one
• Collison Free ( practically)
• Avalanche effect
Sample Transactions to be added as Blocks

Source: https://blog.goodaudience.com/
Blockchain How does it work?

Simple explanation of Chaining : Not the complete picture

Source: https://blog.goodaudience.com/
Continued..

Source: https://blog.goodaudience.com/
Continued..

Source: https://blog.goodaudience.com/
Continued..

Source: https://blog.goodaudience.com/
Hash

Source: https://blog.goodaudience.com/
Cryptography

19
 Cryptography

Cryptography is the art and science of transforming messages to make

them secure and immune to attack.
Cryptography components

20
 Encrypt
Use key = shift down 15 to encrypt the message “HELLO.”

123456 7 8 9 10 1112
A BC DE F GHI J K L

13 14 15 16 17 18 1920 21 22 23 24 25 26
MN OP Q R ST U V W X Y Z

Solution
Each character is shifted 15 characters down.
Letter H  W. ( 8 + 15 =23)
Letter E  T. (5 + 15 =20)
Letter L  A. (12 + 15 =27-26=1)
Letter L  A. (12 +15 =27-26=1)
Letter O  D. (15+15=30-26=4)
The cipher text is WTAAD.

21
 Decrypt
decrypt the message “WTAAD.”

123456 7 8 9 10 1112
A BC DE F GHI J K L

13 14 15 16 17 18 19 20 21 22 23 24
25 26
MN OP Q R ST U V W X Y
Solution Z
Each character is shifted 15 characters up.
Letter W  H. (23-15=8)
Letter T  E. (20-15=5)
Letter A  L. (1-15= -14 +26 =12)
Letter A  L. (1-15= -14 + 26=12)
Letter D O. (4-15 = -11+ 26=15)
The plaintext is HELLO.

22
Categories of cryptography

23
Symmetric-key cryptography

The same key is used by the sender

(for encryption)
and the receiver (for decryption).
The key is shared.
24
Asymmetric-key cryptography

Key : Pvt + Public

Sender

Use public key Use pvt key

of Bob of Bob
25
Keys used in cryptography

shared

26
Comparison between two categories of cryptography

27
Key Management
• Private keys are password-protected.
• If someone want your private key:
• They need the file contains the key
• They need the passphrase for that key
• If you have never written down your passphrase or told anyone
• Very hard to crack
• Brute-force attack won’t work

28
Message Integrity

29
 MESSAGE INTEGRITY

Encryption and decryption provide secrecy, or confidentiality, but

not integrity.

we may not even need secrecy, but instead must have integrity !!.

30
Message and message digest

To preserve the integrity of a document, we need:

•the document and
•the fingerprint

The message digest needs to be kept secret.

31
Checking integrity

Message

Message Message

message digest has been encrypted while sending

32
Digital signatures
• A digital signature
• Allows the receiver to authenticate the identity of the sender

• Prevents the sender from later claiming that he did not sent the message

• Prevents the receiver from constructing the message on behalf of sender.

33
 Hand VS Digital Signature

Hand Signature Digital signature

1) Inclusion With doc separate from doc

2) Verification Manual inspection hashing

3) Relationship 1-n 1-1

4) Timestamp No Yes

34
Digital Signature Generation and Verification
Message Sender Message Receiver

Message Message

Hash function Hash function

Public
Key
Digest

Private
Encryption Decryption
Key

Signature Expected Digest Digest

35
How does it work
• Hashing
• Digital Signature
• Solving Cryptographic Puzzle
• Merkel Tree
What is Mining ?
• Mining – Adding new Block to the Blockchain
• Requires solving a cryptography puzzle
• Computationally difficult
• Reward for Mining
Which puzzle to be solved ?
• Guess the Value of Nonce (number only used once) to make the
resultant Hash a valid one
• Valid resultant Hash means – Mining is performed
• Requires very high computational power
• How does it work?
• Hash of Data (Transactions) and Nonce combined should be less than
the specified value
• Miner who gets that required Nonce will add the block to the existing
blockchain
Pictorial representation
• HV- Highest value (FF......FFF) 16 times HV
• LV-Lowest value (00…..000) 16 times
HN1
• AT- Arbitrary Threshold
• Hash Nonce1-HN1 Invalid Range

• Hash with Nonce2-HN2

AT
HN2
Valid Range

LV
How a block looks like :
Block

Block Number

Previous Block Hash

Time stamp

Data

Nonce

Hash

Simplified view : Conceptual Representation

Blockchain Demo
• https://andersbrownworth.com/blockchain/hash

• Courtesy : Blockchain Demo - Anders Brownworth

Merkle Tree

Courtesy : Draft NISTIR

Market Tree
• It’s a binary hash tree .
• A Data structure to store the Hash of Transactions (multilayered hash)
• Instead of storing Hashed of each transaction in the Block header
• Hash root of Markle Tree is used
• Efficient mechanism to summarize the transactions
• Eases the verification (just need to match the digest of transactions
with the root hash of Markle Tree)
• For nodes : No need to have the complete copy of all transactions
rather Hash of root of Markle tree is enough for verification
Markle Tree
• A Data structure used in computer science
• Bitcoin uses Merkle Tree to encode / store the hash values
• Efficient storage
• Higher level of Security (Multiple layer of Hashing)
• Each transaction is converted to Hash and then Tree Structure is
created
• Root Hash will be stored as data
Blockchain and Merkle Tree

Courtesy : Draft NISTIR

The overall picture of block addition

Source: Blockchain for Dummies by Tiana Laurence

Consensus Mechanisms
• Many mining nodes compete with each other to solve the puzzle
• Consensus mechanisms (set of predefined rules) are required to
resolve any kind of issue for adding a new block-
• Identification of winner
• Proof of Work consensus mechanism (Bitcoin, Ethereum)
• Proof of Stake consensus mechanism ( Cardano (ADA), Nxt, Blackcoin
Ethereum2.0 may use it)
Proof of Work Consensus Model (PoW)
• Proof of Solving the puzzle by mentioning the Nonce
• Verification is computationally easy
• (Solving the puzzle is highly computationally intensive)
• Its hard to solve the problem but easy to verify
• Require massive resources for adding new block
• High computation cost disincentivize cheating
• High computing power : High probability of success
Courtesy : Georgios Konstantopoulos
https://medium.com/loom-network/understanding-blockchain-fundamentals-part-2-proof-of-work-proof-of-stake-
b6ae907c7edb
Proof of Stake Consensus Model (PoS)
• Stake has been given the preference
• Miners / Nodes with higher stakes will have higher chance of winning
(mining the block)
• Requires less energy and computational power compared to PoW.
• The existing chains as Nxt , Blackcoin, Cardano use PoS
• Stake is referred to as an amount of currency that an actor is willing to lock
up for a certain amount of time
• Challenges: nothing at stake problem
• Hybrid consensus models are also suggested
• New version of Ethereum is looking to develop / implement a variant of
PoS
Question
• Why miner will be interested to propagate a block created by another
miner ??
• Prevalence of longest chain
Fault Tolerance
• It is important to have fault tolerance capability in the Blockchains
• To protect it from the Bad users (malicious users)
• To provide higher level of reliability
• Many Blockchains use Byzantine fault tolerant consensus mechanism
 Byzantine Generals problem (BGP)
• Described by Lamport, Shostak and Pease (1982) Byzantine Generals
problem is used to describe the fault tolerance
• Fours Generals including one leader (Commander)
• Out of four one is traitor
• The decision is to whether to attack or retreat
• Success will be achieved (or will be saved) if majority follows the
same decision
• As per the solution : Majority consensus (success) can be reached till
2/3 generals (actors) are honest (or traitors are not more than 1/3)

https://medium.com/loom-network/understanding-blockchain-fundamentals-part-1-byzantine-fault-tolerance-245f46fe8419
Byzantine Fault Tolerance(BGT)

• Byzantine Fault Tolerance is the characteristic which defines a system that

tolerates the class of failures that belong to the Byzantine Generals’
Problem.
• Byzantine Fault Tolerance has been needed in airplane engine systems,
nuclear power plants and pretty much any system whose actions depend
on the results of a large amount of sensors
• Blockchains are decentralized ledgers. Bad actors have huge economic
incentives to try and cause faults.
• Byzantine Fault Tolerance is a desired Phenomena
• Satoshi Nakamoto described PoW solves BGP hence it is BFT
https://www.mailarchive.com/[email protected]/msg09997.ht
ml
 Continued..
• Transaction Fee
• Proof of Work
• 51% Hack
• Double spending ?
• Prevalence of Longest Chain
Bitcoin - Controlled Supply

https://en.bitcoin.it/wiki/Controlled_supply
Bitcoin Monetary Policy
• Halving
• Every 210000 blocks (or about every 4 years) number of bitcoins per block
reduced to half
• 2009 – 50 BTC / Block
• 2012 -25 BTC/ Block
• 2016 – 12.5 BTC / Block
• 2020- 6.25 BTC / Block
• 2024 – 3.125 BTC / Block
• Total 21 Millions – by 2040 will be mined
• Controlled by Software / algorithm / preprogrammed
Bitcoin As A State Transition System

Courtesy - https://ethereum.org/en/whitepaper/
Continued…
• Ledger of a cryptocurrency such as Bitcoin can be thought of as a
state transition system
• "state" consisting of the ownership status of all existing bitcoins
• "state transition function" that takes a state and a transaction and
outputs a new state which is the result.
• APPLY(S,TX) -> S' or ERROR
• APPLY({ Alice: $50, Bob: $50 },"send $20 from Alice to Bob") = { Alice:
$30, Bob: $70 }
• “State" = Unspent transaction outputs (UTXO)
Continued..
• UTXO having a denomination and an owner (defined by a 20-byte
address which is essentially a cryptographic public key)
• A transaction contains one or more inputs. Each input
• containing a reference to an existing UTXO
• and a cryptographic signature produced by the private key associated with
the owner's address,
• one or more outputs,
• with each output containing a new UTXO to be added to the state.
Continued..
• The state transition function APPLY(S,TX) -> S' can be defined roughly
as follows:
• For each input in TX:
• If the referenced UTXO is not in S, return an error.
• If the provided signature does not match the owner of the UTXO,
return an error.
• If the sum of the denominations of all input UTXO is less than the sum
of the denominations of all output UTXO, return an error.
• Return S with all input UTXO removed and all output UTXO added.
Bitcoin operational issues (Scalability)
• Scalability Problem restricts the usage of Bitcoin
• Restricted capability for huge Transactional data
• Limited size of the Blocks (1MB ) and Frequency
(10 minutes to mine per block)
Average Block time / Block frequency
• Bitcoin- 10 Minutes
• Ethereum – 15 Sec
• Ripple – 3.5 sec
• Litecoin- 2.5 Minutes
The Rigs Look like

Business Insider - Olga Maltseva/Getty Images

 Hash rate units
Hashrate Unit/s Hash Hashes Per Second

GH/s (GigaHash) 1,000,000,000 One Billion (109)

TH/s (TeraHash) 1,000,000,000,000 One Trillion(1012)

PH/s (PetaHash) 1,000,000,000,000,000 One Quadrillion(1015)

EH/s (ExaHash) 1,000,000,000,000,000,000 One Quintillion(1018)

(16 Jan 2022)
Mining Pools
• Group of cryptocurrency miners
• Combine their computing power to increase the probability of solving
the puzzle
• Block rewards are shared based on the Hashing power
• Prominent mining pools
• AntPool
• F2Pool
• Slush Pool
• Binance Pool
MemPool
• Short form of memory pool
• Unconfirmed / pending transactions maintained by the nodes
• Once the transaction is included in the block , will be removed from
the MemPool
Bitcoins : Impact on Environment
• High Electricity usage
• Increasing the carbon footprint

• https://www.nytimes.com/interactive/2021/09/03/climate/bitcoin-
carbon-footprint-electricity.html
• https://www.businessinsider.in/cryptocurrency/news/watch-
malaysian-police-use-a-steamroller-to-crush-1069-bitcoin-mining-
rigs-worth-1-3-million/articleshow/84549421.cms
• https://www.theguardian.com/world/2022/jan/06/kazakhstan-
bitcoin-internet-shutdown
Ethereum
• Most popular Cryptocurrency after Bitcoin
• Launched in 2015 ( Vitalik Buterin, one of the co-founder)
• Ether as (native) Cryptocurrency
• Supports development of tokens
• It is Programmable (Turing complete)
• Ethereum is a platform to develop any application on the top
• DAO, Dapps, DeFi , NFT
• Extended the legacy of Cryptocurrency with additional features
like Smart Contracts
Continued..
• Open source , decentralized , reward for mining
• (The current mining reward is 2 ether per block plus all transaction and
gas fees contained in the block)
• Triggered the development of blockchain based ecosystem
• Ethereum Virtual Machine
• Gas : Amount of fee to be paid to miner for doing the
computation.
• To be included with the proposed transaction (controlling mechanism
to avoid infinite loop)
• Predefined computation rate wrt Gas.
• Gas v/s Ether conversion also exist
Ethereum :

Source-https://ethereum.org/en/what-is-ethereum/
Transaction Processing Speed

• Bitcoin : 4TPS (Block time 10 Minutes)

• Ethereum (PoW) : 30 TPS (Block time 14
seconds)
• Ethereum 2.0 (PoS): can scale up to 100,000
• Visa Network : 65,000 TPS
Forking
• A phenomena when a blockchain is divided into two parallel chains.
• This happens due to new set of rules (new technology
implementation) are developed.
• Hard fork and Soft Fork
• Hard Fork : When the two chains completely derecognize each other
• Those who not adopt the changed blockchain they will be prevented to use
the new one and vice-versa
• Ethereum Hard Fork in 2016: Majority of the users shifted to new one
(known as Ethereum currently) and some still with the old one renamed as
Ethereum Classic
Soft Fork
• Soft Fork: A scenario when the new rules (technology upgrade) are
not strictly forced on the nodes . Both types of nodes will be
recognized . It is backward compatible
• Example: Soft fork of Bitcoin in 2014 – Both kind of Clients (those
support as well as not support the change) can participate .
Bitcoin Cash (BCC)
• Bitcoin Cash was forked from the original Bitcoin (kind of Hard Fork
in 2017) , to make an entirely different cryptocurrency with some
functional differences
• Incorporate Segregated Witness (SegWit, where transactions are split
into two segments: transactional data, and signature data)
• Reduced the amount of data being verified in each block.
• Signature data can account for up to 65 percent of a transaction block
• Block size Bitcoin Cash - 32MB and Bitcoin- 1MB.
• BCC more scalable and higher transaction rate
Altcoins
• Tokens, cryptocurrencies, and other types of digital assets that
are not bitcoin are collectively known as alternative
cryptocurrencies
• Litecoin and Dogecoin are prominent altcoins
Litecoin
• Litecoin was an early bitcoin spinoff from Bitcoin (October,
2011)
• Kind of spin off from Bitcoin
• Faster confirmation than Bitcoin
• Implemented with SegWit (Segregated Witness) : Removing
the signature data from transactions
• Effectively increasing the block size for transactions
Continued..
• Bitcoin and Litecoin use different cryptographic algorithms: Bitcoin
uses SHA-256 encryption algorithm, and Litecoin uses Scrypt
• The Bitcoin network can never exceed 21 million coins, whereas
Litecoin can accommodate 84 million coins
Dogecoin
• Cryptocurrency started as a joke to payment system
• Satire to the cryptocurrency valuation
• Dogecoin takes only 1 minute to confirm, while BTC takes 10
minutes.
• Has become a prominent Cryptocoin
Ripple
• Blockchain based solution for Fast Cross Border payments
and settlements
• Well accepted payment ecosystem (based on Blockchain)
• Settles the cross-border payment in around 3 seconds
• Ripplenet as platform and XRP as currency
• Working with following motivation
(https://ripple.com/company)
• Unlocking the Power of Blockchain
• Creating an Inclusive Financial System
• Accelerating the Internet of Value
Stablecoins
• Cryptocurrencies like Bitcoin and Ethereum are highly
volatile
• Stable coins are mapped to the underlying currency (say
USD) to restrict the price variation
• Prominent Stable coins
 Tether (USDT) -operates on Ethereum Blockchain)
 USD Coin (Operates through Ethereum and other public blockchains )
 Binance USD
 Dai (implemented through Smart Contract on Ethereum Blockchain
maintained and regulated by MakerDAO )
•

https://coinmarketcap.com/view/stablecoin/
Binance
• One of the biggest Crptocurrency exchange founded by Changpeng
Zhao ("CZ") and Yi He

• CZ Net worth was around $96 Billion (Jan 2022) , $43 Billion (2024)
• Launched two cryptocurrencies Binance Coin (BNB)-2017 launched in
June 2017 and Binance Smart Chain (BSC) -2020
• BSC operates using "Proof of Staked Authority", a combination
of proof of stake and proof of authority. It has 21 approved validators.
• As of 2021, Binance Coin was the cryptocurrency with the third
highest market capitalization
https://www.livemint.com/companies/people/richest-us-prisoner-worth-43-billion-binances-changpeng-zhao-will-see-
his-wealth-grow-even-in-jail-11714548346951.html
Blockchain versions
• Blockchain 1.0 - Currency
• Blockchain 2.0 – Contracts
• Blockchain 3.0 – Justice Applications beyond Currency,
Economics and Markets (Decentralized Governance , e-
Voting etc.)

Courtesy : Blockchain : Blueprint for a New Economy

Cryptocurrency Framework
• Blockchain Technology – Backbone
• Cryptocurrency – Protocols
• Artifacts – Token / Objects (customized)
Cryptocurrency v/s Tokens
• Used interchangeably
• Both are
• digital assets on Blockchain
• Based on decentralization
• Used as medium of exchange
• Use cryptographic signatures
• Cryptocurrency – Built in logic in Protocol of Blockchain
• Token : Programable logic in smart contract deployed on
Blockchain
Extension of Ethereum Ecosystem
• NFT (Non-Fungible Token)
• dApp (Decentralized Applications)- Example : Web 3.0
• DeFi (Decentralized Finance)
• DAO (Decentralized Autonomous Organizations)
NFT (Non-Fungible Tokens)
• A term came out with Ethereum Blockchain
• Powered by smart contracts on the Ethereum blockchain
• A way to represent anything unique as an Ethereum-based asset (Tokens for all).
• More power to content creators
• Assigning a unique token for any entity (physical or digital) on the blockchain
• Can be used to represent ownership of unique items.
• Currently primarily used for digital assets
• Can solve the problem of ownership and duplicity on the Internet
• Use cases of NFT ??
• Can be used as collateral in DeFi lending (may have illiquidity problem)
Continued..

• ERC-20 is used to create fungible tokens

• NFT can be created on any blockchain that supports Smart Contract
• ERC -721 and ERC -1155 standard of Ethereum supports the NFT
• Ethereum is most prominent blockchain platform for creating NFT
ERC-20 (Ethereum Request Comments)
(source : Coindesk)
• ERC-20 Ethereum token standard is a blueprint for creating
fungible tokens that are compatible with the broader
Ethereum network
• Ethereum platform allows to create own token that can work
without intermediary
• Each token has its own specific utility, such as granting users
the right to vote on decisions impacting the future of a
project or rewarding customers for performing certain tasks.
ERC-20 Tokens
• Many crypto projects that were built using the ERC-20
framework, including:
• Tether (USDT) – Stable coin
• Chainlink (LINK)
• Binance coin (BNB)
• USD coin (USDC)
• Wrapped bitcoin (WBTC)
• Dai (DAI)- Stable coin
• DeFis like : UNI, SNX,YFI,AAve
ERC -721
• Standard for Non-Fungible tokens
• Cryptokitties

https://www.cryptokitties.co/
ERC-1155
• Next step for creating Non fungible tokens
• Allows a contract that can contain both fungible and Non -
Fungible tokens
• Enjin (a gaming platform): Allows both Fungible and Non-Fungible
objects to be used during the game.
Decentraland
• Open-source 3D virtual world platform (Game)

• Can buy own virtual plots as NFT with currency MANA

• The first fully decentralized world, Decentraland is controlled via the DAO,
• DAO owns the most important smart contracts and assets of Decentraland.
Via the DAO, you decide and vote on how the world works.
(https://decentraland.org/)

• NFT Sales https://www.nft-stats.com/collection/decentraland

Some news Items (NFT)
• https://www.businessinsider.in/stock-market/news/twitter-ceo-
jack-dorseys-first-ever-tweet-sold-for-2-9-million-as-an-
nft/articleshow/81639599.cms
• https://www.theverge.com/2021/3/11/22325054/beeple-christies-
nft-sale-cost-everydays-69-million

• NFT Marketplace LooksRare Nears $400 Million in Sales in Just

Three Days After Launch: Report
(https://gadgets.ndtv.com/cryptocurrency/news/nft-marketplace-
looksrare-sales-volume-usd-400-million-meebits-opensea-rival-
2706068)
NFT Market place
• OpenSea (https://opensea.io/)
• Rarible (https://rarible.com/)
• Look Rare (https://looksrare.tech/#/)
• Binance (https://www.binance.com/)
• Valuables (https://v.cent.co/) [Twitter Founder Jack Dorsey sold his
first tweet here )
Web 3.0
• Democratization of Web
• Data ownerships: Google, FB, Amazon
• https://steemit.com/ (Blockchain version of twitter)
• Steemit is designed as a decentralized application (DApp) built upon
the Steem blockchain, using the eponymous cryptocurrency STEEM to
reward users for their content. By voting on posts and comments,
users get to decide the payout of those posts
• https://en.wikipedia.org/wiki/Steemit
DeFi
• Decentralizing the financial services
• (Cryptocurrencies have decentralized the money )
• DeFi is a collective term for financial products and services that are
accessible to anyone who can use Ethereum – anyone with an
internet connection
• With DeFi, the markets are always open and there are no centralized
authorities who can block payments or deny you access to anything
• DeFi products open up financial services to anyone with an internet
connection and they're largely owned and maintained by their users
DeFi Examples
• Uniswap :(https://uniswap.org/)
• Decentralized Crypto trading protocols
• Facilitates automated crypto-tokens transactions on Ethereum Blockchain
through smart contracts
• AAVE : https://aave.com/
• Build liquidity protocol called for finance domain : AAVE liquidity protocol
(Open source)
• Created Non-Custodial Liquidity Markets to earn interest on supplying and
borrowing assets
• Earn interest, borrow assets, and build applications
• https://app.aave.com/markets/
Continue
• Lend or Borrow the cryptocurrency/tokens
• https://app.aave.com/markets/
• Leveraged Loan (multiple exchanges)
• Flash loan
Some other Blockchain platforms
Polygon
• A decentralized Ethereum scaling platform
• (Indian blockchain scalability platform)
• Focusing on Web3 for all
• Enables developers to build scalable user-friendly dApps
• Low transaction fees without sacrificing on security.
• Helps to improve the performance of dApps
• Involved in NFTs, DAOs, dApps, DeFi
• Polygon zkEVM: Open source code for Polygon
• (ZK- zero knowledge)
Chainlink
• Securely connects smart contracts with off-chain data and services
• Open source technology to connect the Smart Contracts (by Building
Blockchain Oracles)
• Can build Hybrid Smart Contracts (Off chain data )
• Developed use cases for DeFi , NFTs etc.
Solana
• Public blockchain platform having Smart Contract functionality
• SOL as native currency
• Is seen as long-term competitor for Ethereum due to high transaction
speed and low cost
• Claims for higher degree of integration and scaling capabilities
MetaMask
• Software Cryptocurrency Wallet to interact with Ethereum
Blockchain
• Can be used as browser extension or mobile app
• Can store user’s keys, broadcast transactions , send –receive
Ethereum based cryptocurrencies / tokens