How to build Defi App?

The advent of decentralized finance within the crypto space has created a lot of traction worldwide. Defi is growing fast would be an understatement. With its introduction, it started to gain immense popularity among tech enthusiasts somewhere around mid of 2018. By 2019, Defi associated itself with over half a billion dollars market valueIn today’s market, the value of Defi has now risen over $26 billion.

As Defi apps’ demands grow, learning the particular field’s implementation skill set and knowledge also increases. This article focuses on providing a step-by-step approach to develop a Defi app using Solidity. Through this Defi application, users can deposit an ERC20 token to the smart contract and it’ll mint and transfer Farm Tokens to them. When users want to withdraw their ERC20 tokens, they can burn their Farm tokens and then ERC 20 tokens are transferred back to them.

The article moves towards the description of creating a Defi app after a brief introduction about Defi applications.

1. What are Defi apps?
2. How to build Defi apps?

What are Defi apps?

Defi applications built on a Blockchain network provide all financial services in a decentralized, borderless manner that allows everyone to access and avail all financial services. Defi applications allow lending and borrowing funds, trade cryptocurrencies, speculate the price movements, earn interests and provide risk insurance. Transactions made through centralized intermediaries are now performed directly between participants, mediated by smart contracts.

How to build Defi apps?

An environment setup is required to start working on the development of the application. Two tools, Truffle and Ganache, require installation.

1. Install Truffle and Ganache

Truffle is a testing and development framework for building smart contracts for Ethereum. It provides an easy way to create and deploy smart contracts to the blockchain. The other tool, Ganache, allows creating local Ethereum blockchain to test smart contracts. Ganache simulates basic network features and funds the first ten accounts with 100 test Ether. Thus, it makes the deployment of Smart contracts free and easy. It can be used as a desktop application or command-line tool. Here, a UI desktop application is used.
Project creation involves executing the following commands:

It will create a blank project and the structure of the project will be as shown below:

• contracts: Folder for the Solidity Smart contracts
• migrations: Folder for the deployment scripts
• test: Folder for testing our Smart contracts
• truffle-config.js: Truffle configuration file

truffle exec .\scripts\getMyTokenBalance.js

Here, the expected result is 0. Now, MyToken is to be staked on the smart contract. The user needs to first approve the smart contract to transfer MyToken, since the deposit(uint256 _amount) function calls safeTransfer() function. To approve the request call the function:

const MyToken = artifacts.require(“MyToken”);
const FarmToken = artifacts.require(“FarmToken”);
module.exports = async function(callback) {
 const accounts = await new web3.eth.getAccounts();
 const myToken = await MyToken.deployed(); 
 const farmToken = await FarmToken.deployed(); 
 const allowanceBefore = await myToken.allowance(accounts[0], farmToken.address);
 console.log(‘Amount of MyToken FarmToken is allowed to transfer on our behalf Before: ‘ + allowanceBefore.toString());
 await myToken.approve(farmToken.address, web3.utils.toWei(‘100’, ‘ether’));
 const allowanceAfter = await myToken.allowance(accounts[0], farmToken.address);
 console.log(‘Amount of MyToken FarmToken is allowed to transfer on our behalf After: ‘ + allowanceAfter.toString());
 balanceMyTokenBeforeAccounts0 = await myToken.balanceOf(accounts[0]);
 balanceMyTokenBeforeFarmToken = await myToken.balanceOf(farmToken.address);
 console.log(‘*** My Token ***’)
 console.log(‘Balance MyToken Before accounts[0] ‘ + web3.utils.fromWei(balanceMyTokenBeforeAccounts0.toString()))
 console.log(‘Balance MyToken Before TokenFarm ‘ + web3.utils.fromWei(balanceMyTokenBeforeFarmToken.toString()))
 console.log(‘*** Farm Token ***’)
 balanceFarmTokenBeforeAccounts0 = await farmToken.balanceOf(accounts[0]);
 balanceFarmTokenBeforeFarmToken = await farmToken.balanceOf(farmToken.address);
 console.log(‘Balance FarmToken Before accounts[0] ‘ + web3.utils.fromWei(balanceFarmTokenBeforeAccounts0.toString()))
 console.log(‘Balance FarmToken Before TokenFarm ‘ + web3.utils.fromWei(balanceFarmTokenBeforeFarmToken.toString()))
 console.log(‘Call Deposit Function’)
 await farmToken.deposit(web3.utils.toWei(‘100’, ‘ether’));
 console.log(‘*** My Token ***’)
 balanceMyTokenAfterAccounts0 = await myToken.balanceOf(accounts[0]);
 balanceMyTokenAfterFarmToken = await myToken.balanceOf(farmToken.address);
 console.log(‘Balance MyToken After accounts[0] ‘ + web3.utils.fromWei(balanceMyTokenAfterAccounts0.toString()))
 console.log(‘Balance MyToken After TokenFarm ‘ + web3.utils.fromWei(balanceMyTokenAfterFarmToken.toString()))
 console.log(‘*** Farm Token ***’)
 balanceFarmTokenAfterAccounts0 = await farmToken.balanceOf(accounts[0]);
 balanceFarmTokenAfterFarmToken = await farmToken.balanceOf(farmToken.address);
 console.log(‘Balance FarmToken After accounts[0] ‘ + web3.utils.fromWei(balanceFarmTokenAfterAccounts0.toString()))
 console.log(‘Balance FarmToken After TokenFarm ‘ + web3.utils.fromWei(balanceFarmTokenAfterFarmToken.toString()))
callback();
}

Run this script with:

truffle exec .\scripts\transferMyTokenToFarmToken.js

Now, the job to successfully create and deploy a defi app is done.

Conclusion

The article presented how to set up the project development environment with Truffle and Ganache and create a Defi application that can deposit MyTokens, receive FarmTokens and withdraw MyTokens by burning FarmTokens.

If you’re interested and looking for a company to develop a Defi application for your business, we’re ready to do it for you. Get a consultation scheduled with our team of experts and discuss your requirements.