Chapter · Master Ethereum
DeFi, stablecoins, and MEV
DeFi, short for decentralized finance, is a wave of apps on Ethereum that let people trade, lend, and borrow without a bank in the middle. Smart contracts hold the funds and enforce the rules. A big part of DeFi is stablecoins, tokens designed to hold a steady value, often pegged to the US dollar. They give people a calm place to park value and a common unit for trading, all while staying on chain.
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What this lesson covers
Powerful and risky
DeFi is open and creative, but it is not gentle. Contracts can have bugs, stablecoins can lose their peg, and high yields often hide high risk. There is no support desk to reverse a mistake. Treat DeFi as an experiment with real money: start tiny, understand each app, and never risk funds you cannot afford to lose.
What you get asked
What is DeFi in one line?
DeFi replaces the middleman with code. Trading, lending, and borrowing happen through smart contracts that anyone can use and inspect.
A token designed to hold a steady value, often pegged to the US dollar, is called a ___.
Stablecoins aim to stay near a fixed value. They are widely used in DeFi as a steady unit for trading and saving on chain.
What is MEV, roughly?
MEV, or maximal extractable value, is profit that block producers or bots can capture by choosing the order of transactions. It can quietly raise costs for ordinary users.
Match each DeFi idea to its meaning
DeFi bundles familiar services into smart contracts. Stablecoins keep value steady, swaps move between tokens, and MEV is a hidden cost tied to how trades get ordered.
The rest of this chapter
Learn how Ethereum works as a programmable blockchain, from smart contracts and gas to staking, Layer 2s, and DeFi.