L06: Decentralized Finance

Explore the DeFi ecosystem through live dashboards — analyze TVL, AMM pools, lending rates, gas fees, and yield farming.

View Lesson Slides (PDF)

Guided Activities

1

DeFi TVL Analysis

Tool: DeFiLlama
  1. Go to defillama.com.
  2. Note the total TVL (Total Value Locked) across all chains and protocols.
  3. Click "Protocols" and sort by TVL — what are the top 5 DeFi protocols?
  4. Click on Lido — what category of DeFi is this? (liquid staking)
  5. Click on Aave — what category? (lending/borrowing) Compare their TVL.
Discussion: Why has liquid staking become the largest DeFi category? What does this tell us about how people use DeFi?
2

Explore an AMM Pool

Tool: Uniswap
  1. Go to app.uniswap.org/explore/pools.
  2. Find the ETH/USDC pool (one of the most traded pairs).
  3. Note: Total Value Locked (TVL), 24-hour trading volume, 24-hour fees collected, and the fee tier.
  4. Calculate the daily fee yield: (24h fees ÷ TVL) × 100 = ?%. Annualize it: multiply by 365.
  5. Compare different fee tiers (0.01%, 0.05%, 0.3%, 1%) — which has the most volume?
Discussion: Why do Uniswap pools offer different fee tiers (0.01%, 0.05%, 0.3%, 1%)? How should a liquidity provider choose?
3

Check Lending Rates

Tool: Aave
  1. Go to app.aave.com/markets/.
  2. Find the supply APY for USDC (what lenders earn) and the borrow APY for USDC (what borrowers pay).
  3. Compare supply vs borrow rates for ETH — the difference is the protocol's spread.
  4. Note the "Utilization Rate" for each asset — this shows what percentage of supplied assets are being borrowed.
  5. Look for assets with high utilization — these tend to have higher interest rates.
Discussion: Why is the borrow rate always higher than the supply rate? What happens to rates when utilization approaches 100%?
4

Gas Fee Analysis

Tool: Etherscan Gas Tracker
  1. Go to etherscan.io/gastracker.
  2. Note the current gas prices: Low (for patient users), Average, and High (for urgent transactions) — all in Gwei.
  3. Find the estimated cost in USD to: send ETH, do a Uniswap swap, and mint an NFT.
  4. If available, check the "Gas Price by Time of Day" heatmap. When are the cheapest hours?
  5. Calculate: if gas is 30 Gwei and a Uniswap swap costs ~150,000 gas, what is the total fee in ETH?
Discussion: When is the cheapest time to transact on Ethereum? Why do gas prices fluctuate so much?
5

DeFi Yield Comparison

Tool: DeFiLlama Yields
  1. Go to defillama.com/yields.
  2. Filter by "Stablecoins" — what are the highest-yielding stable pools?
  3. Sort by TVL — are the highest-yield pools also the largest? (usually not!)
  4. Look at the "IL Risk" (Impermanent Loss Risk) column for volatile pairs.
  5. Compare: a 5% yield stablecoin pool vs a 50% yield volatile pair. Which is riskier?
Discussion: Why do higher DeFi yields often come with higher risk? What is impermanent loss, and how does it affect liquidity providers?
© Joerg Osterrieder 2025-2026. All rights reserved.