Topic 6: :Decentralized applications (dApps)

and Decentralized finance (DeFi)

The lecture covers two main topics: Decentralized Applications (dApps) and Decentralized
Finance (DeFi), along with a brief discussion on Crypto-Asset Managers.

1. Decentralized Applications (dApps):

- dApps are software programs with their backend code running on a distributed computer
network or blockchain.
- Key features of dApps include being open-source, decentralized, cryptographically secure,
and having a tokenized system.
- dApps differ from traditional web apps in terms of security, speed, cost, and openness.
- Use cases for dApps include DeFi, enterprise solutions, decentralized exchanges (DEXs),
gaming, and digital collectibles.
- Examples of dApps are Uniswap, SushiSwap, PancakeSwap (DEXs), DAOs, and GameFi
platforms like Axie Infinity.
- Limitations of dApps exist, but the slides do not provide specific details.

2. Decentralized Finance (DeFi):

- DeFi refers to financial products and services accessible to anyone with an internet
connection, built on blockchain technology like Ethereum.
- DeFi enables various activities such as sending money globally, accessing stable currencies,
borrowing, lending, token swaps, advanced trading, portfolio management, crowdfunding, and
insurance.
- DeFi operates using cryptocurrencies and smart contracts, eliminating the need for
intermediaries.
- Ethereum serves as the foundation for many DeFi applications.

3. Crypto-Asset Managers:
- Crypto investment funds and crypto asset managers are discussed.
 - Key terminology includes crypto firm/manager (General Partner), management company,
crypto funds/hedge funds/investment vehicles, pooled vs. separate account structures, and
Limited Partners (investors).
- Investors need crypto funds for various reasons (not specified in the slides).
- Steps to launch a crypto fund include defining the investment strategy, raising capital,
establishing a management company, preparing documentation, hiring service providers,
completing regulatory registrations, and launching the fund.
- The slides mention that the lecture will cover who can start a crypto fund, but the details are
not provided.

4. Operations for Crypto Asset Managers:

- An operations manual should cover trade operations and controls, cash management and
movement, IT operations, and HR/personnel management.
- Trade implementation for cryptocurrencies and crypto custody are important considerations.
- Custodial considerations for crypto arbitrage strategies are mentioned but not elaborated
upon.

5. Compliance and Governance for Crypto Asset Managers:

- Compliance can be mandatory (legally required) or voluntary (chosen by the manager).
- Crypto trading compliance, compliance testing, and surveillance are crucial aspects.
- Governance and committees play a role in managing crypto assets.

The lecture slides provide an overview of the topics covered, but some areas lack detailed
information. The lecture likely expands upon these points, offering more in-depth explanations
and examples.