===== Protocol Layer =====
[[dido:public:ra:xapend:xapend.a_glossary:start| Return to Glossary ]]

**Protocol Layer**, in [[dido:public:ra:1.2_views:2_tech_views:defilayers| Decentralized Finance (DeFi)]], are the Software protocols which are standards and rules written to govern specific tasks or activities. In parallel with real-world institutions, this would be a set of principles and rules that all participants in a given industry have agreed to follow as a prerequisite to operating in the industry. DeFi protocols are interoperable, meaning they can be used by multiple entities at the same time to build a service or an app. The protocol layer provides [[dido:public:ra:xapend:xapend.a_glossary:l:liquidity]] to the DeFi ecosystem. One example of a DeFi protocol is Synthetix, a derivatives trading protocol on [[dido:public:ra:xapend:xapend.a_glossary:e:ethereum|Ethereum]]. It is used to create synthetic versions of real-world assets.((
Rakesh Sharma,
Investopedia,
24 March 2021,
__Decentralized Finance (DeFi) Definition__,
Accessed 24 May 2021,
[[https://www.investopedia.com/decentralized-finance-defi-5113835]]
))


Source: [[https://www.investopedia.com/decentralized-finance-defi-5113835 ]]


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