What is Composable DeFi?

The Commodity Futures Trading Commission (CFTC) is a separate government organization in charge of the derivatives markets. <\/strong>The main objective is to include the development of ambitious and competitive markets, as well as the defense against fraud, manipulation, and unfair commercial practices.<\/p>\n<p>At the time when Commodities Futures Modernization Act, which took place in 2000, was passed, the Commission's role was enlarged to include the development of a cooperative regulatory system for single-stock futures in collaboration with <strong>the Securities and Exchange Commission (SEC).&nbsp;<\/strong><\/p>\n<p>Also, the CFTC has shifted to offer extra control to the dollar swaps market after the 2008 financial disaster and the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010.<\/p>\n<p>It was 2014 when the CFTC revealed that there is a debate about whether it should manage Bitcoin. Since then, it has taken the position <strong>that Bitcoin is a commodity under the Commodity Exchange Act.<\/strong><\/p>","definition":"is a separate government organization in charge of the derivatives markets.","status":"published","meta_title":"What is Commodity Futures Trading Commission (CFTC)? Definition & Meaning | Crypto Wiki","meta_description":"Commodity Futures Trading Commission (CFTC) meaning: Commodity Futures Trading Commission (CFTC) - is a separate government organization in charge of the derivatives markets.","meta_keywords":null}" :model="{"id":185,"wikipedia_url":"https:\/\/en.wikipedia.org\/wiki\/Decentralized_finance#Decentralized_exchanges","level":"medium","author_id":1,"created_at":"2023-06-19T06:58:59.000000Z","updated_at":"2024-01-04T12:51:21.000000Z","slug":"what-is-composable-defi","title":"What is Composable DeFi?","section":"C","keyword":"Composable DeFi","content":"<p><strong>Composable DeFi<\/strong> refers to the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-interoperability/">interoperability between different <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-defi/">decentralized finance (DeFi)<\/strong><\/a> protocols. Decentralized finance arose with the development of Ethereum-based <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-smart-contract/">smart contracts<\/strong><\/a>. Since then, DeFi has seen numerous developments and improvements which saw the traditional finance (TradFi) structure revolutionized.<\/p>\n<p>DeFi allows anyone with access to the internet to use a broad range of blockchain-based financial products. It acts as a borderless, <strong>decentralized<\/strong> marketplace. Although DeFi has become what it is thanks primarily to the programmable smart contracts, it offers numerous other technical advantages.<\/p>\n<p>Smart contracts are capable of composability &ndash; a feature connecting the entire DeFi ecosystem. <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-decentralized-exchange-dex/">Decentralized exchange (DEXs)<\/strong><\/a> platforms, loan protocols, collateralized loans, <strong>futures markets<\/strong>, and other DeFi aspects are all part of composability.<\/p>\n<p>Composability is a technical feature allowing interoperability between different parts of a single system. Thanks to composability, the different DeFi protocols are able to work in conjunction. This creates a parallel digital financial system that can be accessed from anywhere in the world and is not governed by centralized authorities.<\/p>\n<p>Developers can take advantage of composable DeFi to create different combinations of protocols and <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-are-decentralized-applications-dapps/">decentralized apps (dApps)<\/strong><\/a>.<\/p>\n<h2>How Does Composable DeFi Work?<\/h2>\n<p>Money legos are programmable DeFi protocols and decentralized apps. Since money legos are <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-open-source/">open-source, developers can program them for interoperability and synergy, as well as utilize the code to improve their own DeFi protocols and make them better compatible with each other.<\/p>\n<p>On the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//buy-ethereum-eth/">Ethereum blockchain, where smart contracts originated, developers can find a nearly endless supply of composable DeFi products. Since the blockchain itself is <strong>permissionless<\/strong>, meaning that there is no regulatory entity, developers can build their own dApps and integrate aspects of existing protocols on the Ethereum blockchain simply by paying the gas fees.<\/p>\n<p>This model of decentralized development is possible because smart contracts are designed to be composable. This feature allows both developers and users to engage with decentralized financial strategies.<\/p>\n<p>For example, users can take the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-non-fungible-token-nft/">non-fungible tokens (NFTs)<\/strong><\/a> that they own and use them as <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-collateral/">collateral to receive loan offers. Once they pay back the loan in full, they reclaim their NFTs; however, if they default the loan, the NFT goes to the lender, following the same principle as <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-are-collateral-tokens/">collateral tokens<\/strong><\/strong><\/a>.<\/p>\n<p>Furthermore, users can rent out their utility NFTs or earn interest on them. This can be useful for those who are interested in the utility of NFTs but do not wish to purchase one. It&rsquo;s possible that the ability to use NFTs as collateral or a rental object will gain more use in <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-metaverse/">metaverse&nbsp;projects.","definition":"the capability of DeFi protocols to work in tandem.","status":"published","meta_title":"What is Composable DeFi? Definition & Meaning | Crypto Wiki","meta_description":"Composable DeFi meaning: Composable DeFi - the capability of DeFi protocols to work in tandem.","meta_keywords":null,"author":{"id":1,"user_id":1,"created_at":"2023-05-03T14:30:55.000000Z","updated_at":"2023-05-11T07:18:20.000000Z","title":"Editor-In-Chief","slug":"aaron-s-editor-in-chief","description":"<p>Having completed a Master&rsquo;s degree on Economics, Politics &amp; Culture for the East Asia region, Aaron has written scientific papers with a comparative analysis of the differences between US&rsquo; Western and Japan&rsquo;s Collective forms of capitalism, 1945-2020.<\/p>\n<p>With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He&rsquo;s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.<\/p>\n<p>Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain &amp; Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.<\/p>\n<p>Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.<\/p>","user":{"id":1,"first_name":"Aaron","last_name":"S.","email":"aaron@bitdegree.org","email_sanitized":"aaron@bitdegree.org","email_verified_at":"2023-12-01T09:40:20.000000Z","must_verify_email":false,"is_registered_with_wallet":false,"status":"active","country":"LT","last_connected_ip":"88.119.132.125","image_id":2641,"referral_token":"05TMu2NysXOCn525","referred_by":null,"created_at":"2023-05-03T14:30:55.000000Z","updated_at":"2024-01-09T15:22:21.000000Z","full_name":"Aaron S."}}}" :chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? 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