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Arguably the most popular use case is that smart contracts are used to create decentralized exchange services. See: Uniswap. They are also used extensively in

Arguably the most popular use case is that smart contracts are used to create decentralized exchange services. See: Uniswap. They are also used extensively in the crypto sub-genre called DeFi, or decentralized finance. One of the most popular implementations is called Aave, which allows one to take loans out (i.e. give the contract Ether as collateral, receive an amount of USD stablecoin in return) on a given set of assets. Of course every NFT you ever heard of is essentially its own smart contract (specifically one that implements the ERC-721 standard of functions and public variables), though I'm not sure that qualifies as a 'good' use case. ;)

latchkey 3y ago
This answer right here is, in my opinion, one of the most interesting use cases that is available today. Provide collateral and take out a loan against that collateral. It allows people to act as their own bank. No longer do you have to go to a bank, ask for permission and then get approved for a loan. Now, you can do that yourself, instantly, without any trouble at all. Amazing really. What are those loans used for today? Well, mostly it is about interest rate arbitrage and providing liquidity. As a super basic example, you can borrow funds at 2% and then lend them out again at 3% and make 1%. It is essentially risk free (assuming the contract doesn't have bugs/exploits). The larger picture will be to enable people to be their own Kiva's. Crypto often is pushed to 'bank the unbanked', but it is more than just holding money. It is enabling people to borrow against their existing holdings, effectively allowing anyone, globally, to put their savings to work for them, without having to rely on a centralized banking system to do so. This might not be interesting for USA people, but it is especially valuable in countries that don't have a stable banking system.
- DropInIn 3y ago
  Who is providing the finance and under what terms? How does rhat actually differ from banks or one of the many microfinance services predating crypto? Now, the real kicker, what is the effective cost when _all_ fees are included, because someone has to pay for it and when combining the interest of non-traditional lenders and such fees I highly doubt it'll be cheaper.
  - latchkey 3y ago
    These are collateralized loans that are automated with "smart" contracts. Programmable money. Who? Anyone who wants to provide liquidity. Is this different from existing solutions? Yes and no, the difference is that there is no human intervention here... you don't have to ask for permission. You're also dealing with a global pool of funds using open source technology, instead of just a single bank or service. The only additional "fees" above the interest rate are the cost of a transaction on the block chain. There are certainly a lot fewer hands in the pot and overhead. Learn more at one of the largest and oldest sites: https://aave.com https://aave.com
    - DropInIn 3y ago
      Who proves the collateral exists and is unfettered by existing contracts, specifically those provided through other platforms/existing mechanisms? You see there is still a whole bunch of steps left out.
      - latchkey 3y ago
        It is baked into the contracts and the way that the networks and protocols work. The general idea isn't super complicated though. You have tokens, they sit in a wallet that you control. Let's say you own 10 ETH. Then that is in your wallet. Those ETH are mathematically provable to be in your wallet. In the case of AAVE, you send your tokens to their contract, they give you back a receipt token which represents how much they owe you. Once your tokens are in their contract, you are free to borrow against the value that is locked up. If you get liquidated due to not maintaining your loan ratio, AAVE just keeps your tokens and your receipt tokens are then invalid. There aren't any steps left out. It is really on you to read the documentation and bring some understanding around how all this works. I'll point you here: https://docs.aave.com/hub/ https://docs.aave.com/hub/ I googled and found another good article for you: https://www.leewayhertz.com/how-defi-lending-works/ https://www.leewayhertz.com/how-defi-lending-works/
        DropInIn 3y ago
trompetenaccoun 3y ago
For the record NFTs get a bad reputation because the public associates them with silly pictures traded for outrageous prices. However NFT simply means that the token itself is not fungible and can therefore be used to refer to something specific that does not have to be art at all. Tickets would be an example that multiple teams are working on using the same tech, although they may not refer to it as NFT because the name is tainted.
- snapcaster 3y ago
  Ticketing is already fully digital and no blockchains or NFTs were required. This is AGAIN another example that people bring up where blockchain solves none of the relevant problems and they've ALREADY BEEN SOLVED WITHOUT CRYPTO

latchkey 3y ago

This answer right here is, in my opinion, one of the most interesting use cases that is available today. Provide collateral and take out a loan against that collateral. It allows people to act as their own bank. No longer do you have to go to a bank, ask for permission and then get approved for a loan. Now, you can do that yourself, instantly, without any trouble at all. Amazing really. What are those loans used for today? Well, mostly it is about interest rate arbitrage and providing liquidity. As a super basic example, you can borrow funds at 2% and then lend them out again at 3% and make 1%. It is essentially risk free (assuming the contract doesn't have bugs/exploits). The larger picture will be to enable people to be their own Kiva's. Crypto often is pushed to 'bank the unbanked', but it is more than just holding money. It is enabling people to borrow against their existing holdings, effectively allowing anyone, globally, to put their savings to work for them, without having to rely on a centralized banking system to do so. This might not be interesting for USA people, but it is especially valuable in countries that don't have a stable banking system.

DropInIn 3y ago
Who is providing the finance and under what terms? How does rhat actually differ from banks or one of the many microfinance services predating crypto? Now, the real kicker, what is the effective cost when _all_ fees are included, because someone has to pay for it and when combining the interest of non-traditional lenders and such fees I highly doubt it'll be cheaper.
- latchkey 3y ago
  These are collateralized loans that are automated with "smart" contracts. Programmable money. Who? Anyone who wants to provide liquidity. Is this different from existing solutions? Yes and no, the difference is that there is no human intervention here... you don't have to ask for permission. You're also dealing with a global pool of funds using open source technology, instead of just a single bank or service. The only additional "fees" above the interest rate are the cost of a transaction on the block chain. There are certainly a lot fewer hands in the pot and overhead. Learn more at one of the largest and oldest sites: https://aave.com https://aave.com
  - DropInIn 3y ago
    Who proves the collateral exists and is unfettered by existing contracts, specifically those provided through other platforms/existing mechanisms? You see there is still a whole bunch of steps left out.
    - latchkey 3y ago
      It is baked into the contracts and the way that the networks and protocols work. The general idea isn't super complicated though. You have tokens, they sit in a wallet that you control. Let's say you own 10 ETH. Then that is in your wallet. Those ETH are mathematically provable to be in your wallet. In the case of AAVE, you send your tokens to their contract, they give you back a receipt token which represents how much they owe you. Once your tokens are in their contract, you are free to borrow against the value that is locked up. If you get liquidated due to not maintaining your loan ratio, AAVE just keeps your tokens and your receipt tokens are then invalid. There aren't any steps left out. It is really on you to read the documentation and bring some understanding around how all this works. I'll point you here: https://docs.aave.com/hub/ https://docs.aave.com/hub/ I googled and found another good article for you: https://www.leewayhertz.com/how-defi-lending-works/ https://www.leewayhertz.com/how-defi-lending-works/
      - DropInIn 3y ago

trompetenaccoun 3y ago

For the record NFTs get a bad reputation because the public associates them with silly pictures traded for outrageous prices. However NFT simply means that the token itself is not fungible and can therefore be used to refer to something specific that does not have to be art at all. Tickets would be an example that multiple teams are working on using the same tech, although they may not refer to it as NFT because the name is tainted.

snapcaster 3y ago
Ticketing is already fully digital and no blockchains or NFTs were required. This is AGAIN another example that people bring up where blockchain solves none of the relevant problems and they've ALREADY BEEN SOLVED WITHOUT CRYPTO