Decentralized finance (DeFi) allows strangers on the internet to earn money much the same way bankers do, by earning fees on financial services.
In most cases, people do that by providing liquidity. Those investors “stake,” or lend, digital currencies, not dollars or euros or yen, and they are lending the digital currencies to apps rather than to people or companies. One set of apps with the most need for liquidity and the heaviest flow of transactions is decentralized exchanges (DEXs), particularly automated market makers (AMMs) led by Uniswap.
But how does anyone decide which AMM is the right one for their funds?
This post is a starting point for each investor in the almost $60 billion DeFi market to begin doing their own research on which exchange to take part in. Joining a particular DeFi community can mean much more than just putting up funds. It can also mean participating in discussions, helping out new users, voting on governance decisions and even writing suggested improvements for a software protocol’s code base.
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