What You Will Learn in the Cardano DeFi Masterclass (Part 1)

DeFi (decentralized finance) in the Cardano blockchain ecosystem is growing rapidly and now EMURGO Academy has unveiled the Cardano DeFi Masterclass to meet this rising demand. The focus on building in Cardano over the past few years has paid off and now we are seeing the first major DeFi platforms forming on the network. 

The metrics support the sentiment as we can see by the Total Value Locked (TVL) in Cardano. In terms of ADA, TVL is at all-time highs which indicates more user adoption and building of Cardano DeFi applications.

If we compare TVL with on-chain volume as seen in the next graph, we can see that on-chain transactions in Cardano today are much higher than they were at any previous point in the past year. There are more indicators we could use to showcase the growth of DeFi on Cardano, but the point is clear now. 

The DeFi ecosystem of products and services on the Cardano blockchain is expanding at an increasing rate. There are more products in the works by established projects, new platforms getting ready to launch, and even more advances being designed in the background. It’s a great time to explore the Cardano network. 

In light of these developments and to meet this rising demand for Cardano DeFi, EMURGO’s education unit EMURGO Academy has launched the Cardano DeFi Masterclass course. It’s meant to be a comprehensive primer that introduces both blockchain veterans and newcomers to the Cardano DeFi ecosystem of products and services. 

In this blog and a subsequent Part 2 blog, we’ll explore the complete curriculum of the masterclass in two parts covering Cardano DeFi Masterclass Weeks 1-2, and Weeks 3-6.

We’ll dive into the weekly subjects and what students can expect to learn each week in the Cardano DeFi Masterclass course.

The Cardano DeFi Masterclass is a 6-week, 40-hour, online blockchain course that will go over all the major developments in Cardano DeFi. It consists of both recorded lectures by the biggest Cardano DeFi projects and also live Q&A sessions. 

The lectures will contain practical examples of the working DeFi protocols on the network. These recorded lectures have been made by live Cardano DeFi projects. Participants will be able to learn directly from the developers and creators of some of the best DeFi applications without any intermediary. 

This was possible thanks to the direct collaboration of EMURGO Academy with the Cardano DeFi Alliance. Both entities participated in designing the course’s topics and coordinated to create the recorded lectures. 

This close collaboration is one of a kind when it comes to producing educational material for Cardano. Among the projects presenting, we have GeroWallet, MuesliSwap, SundaeSwap, MetaDEX, Indigo, Charli3, and Clarity, to name a few. 

In the future, we hope many more such courses can be created and bring information from primary sources directly to the Cardano community. 

Let’s look at the week-by-week course breakdown.

The first week starts with the cornerstone of the entire Cardano ecosystem, the crypto wallet. Crypto wallets are an often overlooked piece of any blockchain network, but their correct working is pivotal to the success of all the additional systems. 

The crypto wallet has to preserve the safety of the user’s assets while also having a friendly UI and good UX experience. The course will go over the setup of the wallet, the basics of how it works, tips around keeping a seed phrase safe, and safely connecting to decentralized applications from the wallet. 

So, at the start of the course, the wallet will take center stage and will be used to explore the rest of the Cardano DeFi ecosystem. From there, the course will go over how the wallet facilitates staking on the Cardano network and what this means for the security of the blockchain. 

Finally, it’ll go into a discussion of the yield generated by the staking mechanism of Cardano. An overview of how the pool’s fees affect the ROI, and other considerations regarding the pool selection. 

The discussion of yield will go beyond the staking component into the concept of yield in general. As it is an important metric when discussing the profitability or viability of using any DeFi decentralized application. 

The first-week breakdown would follow these topics:

• • An introduction of financial assets on Cardano, including a discussion of ADA Staking, and native asset staking through custodial scripts. 
    • An introductory session regarding all the different assets on Cardano from the native cryptocurrency ADA, native assets, and the staking opportunities for both. 
  • An introduction to wallets on Cardano, plus a discussion of why light wallets are typically used in DeFi
    • A session covering how wallets work on the Cardano network and why ‘light wallets’ tend to dominate the dApps and DeFi ecosystem. 
  • A discussion of how DeFi professionals examine yield and some examples of different yield structures. Some discussion of the on-chain role of tokens beyond investment. 
    • A session covering the concept of financial yield as applied to Cardano and native tokens. Focused on how best to judge the investment potential of a crypto asset.  
• Interactive Q&A with team members of Cardano DeFi projects

The second week tackles one of the most important topics in DeFi, decentralized exchanges. The DEX was one of the first viable use cases for smart contracts back when generation two blockchains began to operate. It allowed people to quickly swap one asset for another and grow DeFi as a whole. 

The first DEXs adopted the traditional Order Book from the legacy financial world, but this model was difficult to adapt for a blockchain. The Order Book was inefficient and it was largely abandoned once Bancor launched the Constant Product Automated Market Maker, later popularized by Uniswap. 

Of course, Order Books have many advantages that AMMs don’t. Blockchain technology has matured a lot since those early days and today an Order Book style DEX is a viable on-chain option. This has led to many projects revisiting the Order Book when creating DEXs. 

Cardano has a unique advantage in this field as the eUTXO model can work very well with an Order Book. This has sparked a debate in the ecosystem over which model is more capital efficient, the AMM or the Order Book. 

The second week will delve deep into the topic. It’ll have lectures by some of the leading DEXs in the Cardano ecosystem. The topic surely will be an interesting one as the DEX ecosystem keeps evolving rapidly. 

The second-week breakdown would follow these topics:

• • Introduction to Decentralized Exchanges on Cardano
    • A broad primer to all the different DEXs on the Cardano network. 
  • The Order Book DEX
    • A session that introduces the concept of the Order book and how it’s applied in the Cardano network. 
  • The AMM DEX
    • A session that introduces the Automated Market Maker and how it’s applied in the Cardano network.  
  • Portfolio pools, swaps between stable assets, and batching of transactions
    • A session that covers how to choose liquidity pools and how to manage these positions. Second, an introduction to how exchanges between stablecoins work and why they need a special type of liquidity pool. Finally, an introduction to how transactions are grouped by DEXs on the Cardano network.    
  • Concentrated liquidity
    • A session that discusses how liquidity is distributed inside the pool of a DEX. The focus is on the capital efficiency of liquidity pools and how it can be improved using concentrated liquidity.  
  • AMM/Order-book Hybrid DEXs
    • A session that discusses hybrid models that combine the two major types of DEXs on Cardano. 

• Interactive Q&A with team members of Cardano DeFi projects

The Cardano DeFi Masterclass will be a massive opportunity for those looking to dive deep into the Cardano ecosystem. In the next article, we’ll go over the final four weeks of the course and explore more the topic covered during the course. 

DeFi is one of the most innovative and exciting use cases for blockchain technology with many projects building the next wave of decentralized products and services leveraging blockchain networks such as Cardano.

To learn more about the Cardano DeFi Masterclass and enroll now, visit https://education.emurgo.io/cardano-defi-masterclass/

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