DeFi building blocks

AMMs and lending pools

Automated market makers price swaps using pool reserves. Lending pools let suppliers earn yield while borrowers post collateral. Flash liquidity typically draws from such pools under repayment rules.

Oracles and vaults

Oracles feed external prices on-chain. Vaults package strategies behind share tokens. Composability multiplies capability and risk: one weak dependency can break a stack.

Learning path

Start with Ethereum guide, then glossary terms, then practice with small, simulated flows before any mainnet automation.

Composition risk

DeFi’s power is stacking protocols. Each added dependency adds failure modes: oracle delay, pool imbalance, governance change, upgrade bug, or bridge halt. Map your stack on paper and ask which component can pause or misprice under stress.

Reading protocol docs

Prioritize official documentation, audited contract repositories, and risk disclosures over influencer summaries. When docs disagree with dashboards, pause and verify.

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