Imagine a world without banks – what would it be like? This is what decentralized finance looks like. Basically, this ecosystem brings in a bunch of financial applications relying on the blockchain technology. Transactions are usually automatic through some smart contracts, which actually mean agreements of various deals.

Decentralized finance is the concept behind cryptocurrencies these days. It has experienced incredible growth over the past years. Now, understanding how it works takes a bit more research and education. After all, some say this is what the future will be like. Here are some of the best DeFi books out there to learn more about decentralized finance.

How decentralized finance works

The blockchain ensures that everything is secure with keys. Basically, when you deal with some encrypted keys, you are given a unique ID that no one knows about. The key pair will come with two keys – one is private and the other one is public. Other peers can search by the public key to find you. But when it comes to your private key, it is used to authorize all kinds of transactions.

Different decentralized finance applications work differently, but then, the concept is the same. Your public key will work like your wallet. As for the private key, you can use it to send and receive digital money. This is the reason wherefore you need it in a safe place. No matter what you transact or what you do, you will need the private key to make it happen.

It is worth noting that decentralized finance removes the necessity of centralized institutions – banks, other similar institutions, middlemen and associated fees and expenses.


DeFi and the Future of Finance, by Ashwin Ramachandran, Campbell Harvey and Joey Santoro

This book introduces readers to a new and growing world. The current financial landscape is obviously flawed – think about the last financial crises, for example. There are lots of disruptions and the necessity to reinvent the system is part of the game. The authors will first assess the problems associated with today’s finances, only to move on to how decentralized finance can solve them.

The idea behind decentralized finance is the fact that people interact with peers. There are no brick-and-mortar buildings and institutions, so all the costs associated with them are eliminated. Savings will see a different purpose, while lending goes to another level. Forget about old-school brokerages as well – trading is done via algorithms.

The book will also introduce readers to some of the most advanced and useful protocols out there. You will also learn about some companies and how they innovate with the help of decentralized finance. As with every other technology, there might be some risks and issues as well – they are also covered in the book.


Token Economy, by Shermin Voshmgir

This is one of the best DeFi books out there if you want to find out more about cryptocurrencies, tokens and decentralized finance. Generally speaking, anything can be considered a token. Even gold, a painting or a diamond is a token. A football game ticket is also a token. But tokens are used for a bunch of other things.

On the other hand, creating tokens is fairly simple – hence the wide variety of cryptocurrencies, including a plethora of new ones. Everything is managed through a Web3 infrastructure – the blockchain network is a good example. While the basics are clear for most people, figuring out how to use such tokens is a vague aspect.

The book will not go into small or confusing details. Instead, it will summarize what the world knows about blockchain networks so far. Other similar technologies are also explained with the purpose of helping the reader understand the concept of Web3. Furthermore, the author will also get into details about how decentralized finance can help many of today’s economic and social problems.


What Is Defi? Guide to Hex, by Joakim Kristiansen

Joakim Kristiansen is not just explaining the concept of DeFi, but he is also teaching people how to actually make money with it. Those who try to understand this new technology will most likely end up staring at charts and dealing with jargon terms they are not familiar with. Whether you want some education or the possibility to invest, this book will build a solid base.

Digital currencies are definitely outperforming real estate, metals, stocks and others. Lots of people would like to get in, but they have no clue where to start – plus, they might have heard some bad stories as well. This book will first introduce you to decentralized finance. After a few explanations, you will learn how to keep even in the market, keep control of your money and get a bite of this big pie.

You will discover a few things that you had no clue about, but also how to make the difference between a real opportunity and a fake idea. Digital currencies are clearly among the most intriguing projects out there. The book will give you all the details you need – more importantly, in a simple and direct way, without any sophisticated words or theories.


Defi Investment Made Easy, by Dr. Liew Voon Kiong

Decentralized finance is growing at an alarming rate. More and more companies accept digital money and tokens and new tokens show up on a regular basis. There are no doubts about it – one day or another, decentralized finance will run the world. This is one of the best DeFi books to help you understand the concept, how it works and how to invest in it.

Everything is written in simple and clear words – no sketchy jargon. There are comprehensive guides on trading, liquidity mining, lending and so on. Plus, there are a few platforms that you can use as you join the industry – find out which one is more suitable for you based on your needs, but also discover their features, pros and cons.

Compared to a previous release of this book, DeFi Investment Made Easy comes with a series of extras. Flash loans are well explained, as well as risk management. Just like for any other opportunity, there are risks out there and they are all explained. All in all, this is a good guide to help readers understand decentralized finance and the best ways to make money with it.


Blockchain Bubble Or Revolution, by Neel Mehta, Aditya Agashe and Parth Detroja

Cryptocurrencies have split the world into two different groups. Some people believe they represent a major scam – indeed, some people actually lose money with them. Then, others believe they represent the most significant invention over the Internet and they have actually made millions with them. Where is the truth then?

The truth is somewhere in the middle. You can make money with DeFi – decentralized finance, but you can also lose everything you have. This book brings in some clear explanations of decentralized finance and other concepts associated with digital money, but you will also be taken through some real case studies to learn from.

Cryptocurrencies can be a bubble, but they can also represent a revolution. What works for some people will not work for everyone else, so you need to figure it out yourself. Learn about blockchains, different coins, how they work and what causes all the fluctuations. Once you master the basics, you will be able to make more informed decisions later on.


Blockchain and the Law, by Aaron Wright and Primavera De Filippi

Bitcoin appeared in 2009 and changed everything people know about money. The digital currency has skyrocketed over the past years and has gained international recognition – featured in the news of some of the most prestigious media agencies out there. It was often associated with crime, but fiat currency can also be dark and used for all kinds of criminal purposes.

Furthermore, Bitcoin got experts wondering how you can actually mine money out of nowhere. The answer is in the decentralized finance system. The technology is known as blockchain and can be used for more than just dealing with digital money. In fact, it is such a powerful tool that it can literally change society. Autonomous programs – smart contracts – act like robots and perform transactions based on general requests.

This type of technology can seriously shake the traditional banking system. It may also be used to affect governance. After all, it aims for a more democratic system. The authors understand the benefits of new technology and they research how it can actually eliminate the problems associated with today's system. The field is slowly getting regulated as well – plenty of large operators are already taking digital coin transactions.

Conclusion

As a short final conclusion, these are some of the best DeFi books out there. They can help the least experienced understand how a decentralized finance system works – no more banks or middlemen. They will also help you realize the benefits associated with such systems, as expenses and taxes are almost entirely cleared out. But then, you will also discover ways to invest and make money with such systems – the main reason wherefore everyone wants to join the industry.​