Skip to content

What is DeFi?

ELI5: DeFi (decentralized finance) is money software that runs on a public blockchain instead of inside a bank's database. Anyone can read the rules, and the rules execute automatically when you send a transaction from your wallet.

Traditional finance vs DeFi

Bank DeFi protocol
Who holds your money The bank Smart contracts (code on-chain)
Who can change rules Bank policy + regulators Mostly immutable code + limited admin roles
Hours Business hours 24/7
Transparency Opaque ledger Public ledger

Think of a DeFi protocol like a vending machine for financial actions: deposit collateral, mint a stablecoin, swap tokens, vote on emissions — each button is a function call, and the machine either accepts or rejects based on code.

What the KhomDev flywheel does

Four protocols work together:

  1. TARE — borrow a dollar-pegged stablecoin against crypto collateral (like a pawn shop with a health meter).
  2. Keep — pool USDC and earn yield from strategies (like a mutual fund).
  3. Coil — trade via signed intents settled in batches (like a sealed-bid auction clearing at one price).
  4. veForge — lock TARE to vote on where capital goes and earn bribes (like shareholder voting with weekly epochs).
flowchart LR
    User[You] --> TARE[TARE CDP]
    User --> Keep[Keep vault]
    User --> Coil[Coil DEX]
    User --> veForge[veForge votes]
    Coil --> Keep
    TARE --> Keep
    veForge --> Keep

What you can do (no code)

  • Save in sTARE — deposit TARE into a yield vault backed by protocol surplus.
  • Borrow TARE — lock WETH/WBTC, mint TARE, manage your health factor.
  • Earn on USDC — deposit into Keep, receive vault shares.
  • Trade on Coil — sign an intent off-chain; a solver batches it on-chain.
  • Govern — lock TARE for voting power, vote on gauges, claim USDC bribes.

What can go wrong

Risks every DeFi user should know

  • Smart contract bugs can lose funds — this stack is testnet-only and not externally audited.
  • Oracle failures can halt minting/redeeming (by design) or, in badly designed systems, enable bad mints (TARE halts on divergence).
  • Liquidation — if collateral price drops, your position can be closed by third parties.
  • Admin keys — Keep vault strategy management is a documented trust boundary unlike TARE's engine-only model.
Deep dive: why Vyper?

KhomDev protocols are written in Vyper 0.4 — a Python-like language designed for auditability. No inheritance, no function overloading, bounded loops. See Vyper docs.