In the future of finance, DeFi (Decentralized Finance) is reshaping the landscape. In financial applications, there is a major shift in the underlying infrastructure, and it’s changing the way we think about control, transparency, and risk.
Permission, Control, Transparency, and Risks are all being redefined by DeFi
Many of our business practices and concepts of permission and control have changed as a result of DeFi. It alters the way we view financial institutions and the financial system as a whole completely.
For example, with DeFi we can earn interest, borrow, lend, buy insurance, trade derivatives and more without the need for paperwork or a third-party intermediary. DeFi is global, peer-to-peer (i.e., not routed through a centralized system), pseudonymous, and open to everyone, just like crypto in general.
Why is DeFI important?
Instead of the high fees associated with Wall Street’s financial system, DeFi uses Bitcoin’s digital currency as the foundation for a new digital currency system (think office towers, trading floors, banker salaries). Financial markets that are accessible to anyone with an internet connection could be more open, free, and fair.
What are the Benefits of DeFI?
- Open: There’s no need to “open” an account or fill out any forms. To gain access, all you need to do is create a digital wallet.
- Pseudonymous: Personal information such as your name and email address are not required.
- Flexible: You don’t have to wait for long transfers to finish or pay expensive fees to move your assets. You can do it wherever you want, whenever you want.
- Fast: Every 15 seconds or so, interest rates can fluctuate significantly more than on traditional Wall Street.
- Transparent: The entire transaction history is available to all parties (private corporations rarely grant that kind of transparency).
Popular 2022 DeFi projects
Lending Protocols: AAVE, Maker, Compound
Decentralized Exchanges: Uniswap, dYdX1, PancakeSwap
Dune Analytics: https://dune.xyz/hagaetc/dex-metrics – Ethereum ecosystem analytics. Explore and share data from ETH Mainnet, Matic, xDai and others
DeFI Pulse: https://defipulse.com – DeFi Pulse tracks key metrics for Decentralized Finance(DeFi) projects