** Para ler esse artigo em Português, entre no link abaixo https://medium.com/@bizanc/finan%C3%A7as-descentralizadas-defi-voc%C3%AA-j%C3%A1-ouviu-falar-ccddf132e606 **
Decentralized Finance Applications, or DeFi applications, are open source technologies that provide a decentralized layer avoid intermediate financial players, beside that using high quality technology as such Blockchain. Decentralized systems has much higher efficiency, low cost, transparency and security.
The cross-border services as such payments are the best example, a financial institution do it for users, but in general takes between 10 to 20 dollars fee and the process takes 2 to 10 days to be completed, once in decentralized protocols can be done in few a seconds and costs could be around 1 dollar.
DeFi — Decentralized Finance applications desintermediate the whole process, sending digital currency or asset token to other users globally. Throw Elliptical Curve Cryptography inside of user wallet and Blockchain technology, is possible to do it without financial institution in the middle.
Decentralized Applications, Protocols or DApps?
Decentralized finance is based on Decentralized Applications or Protocols. A Decentralized Application, or DApp is application that runs on technology called Blockchain, it provides a peer-to-peer network instead to a single computer. In software perspective, the process is 800% more efficient compared to traditional systems. Let’s check the key benefits:
- Network does not depend on central computer, so never goes down and works 24/07;
- Funds are on user control, mitigating hacking risks;
- Transparency between users, avoiding frauds;
- There is no double spend, decreasing management, compliance and audit costs;
- Accessible to anyone globally, including no banked people.
What is the difference between centralized and decentralized application ?
Application as such: Facebook, Spotfy and Netflix, are good example of centralized applications. Once the entire system is controlled and operated by those companies, there are a lot of examples of problems as such lack of transparency, data leakage and inappropriate usage of users privacy data.
Decentralized applications, there is no middlemen, the information, tokens and cryptocurrencies are guarantee and managed by network. No one has control to change it, once we assuming there is no 51% attack. There are a lot of examples of decentralized finance applications. Bizanc (DEX), Ethereum (CryptoKitties) or Bitcoin(Lightning network). It runs under blockchain architecture and no one has control of this, the process is generated without middlemen or intermediate people.
Different Forms of DeFi Applications
Just like how there exists many different use cases of decentralized applications, there too exists many different use cases for DeFi applications. Examples include:
- Payments;
- Lending;
- Stablecoins;
- Tokenization;
- Derivatives;
- Decentralized Exchange.
Payments Bizanc is a protocol based on the Bitcoin blockchain that allow create their own digital token to use as payment and trade it. So that means, you are able to have your own token payment. Also Bizanc has own digital currency called Biz, that intermediate the process of buy and sell assets on the network and people are able to transact between then. To have control and protect their own funds we suggest to use Mobile wallets.
There is a few options below.
- Electrum — Bitcoin
- Metamask — Ethereum
- BizPay — Bizanc (Under construction)
Lending applications aims to provide the access to credit globally, this is a core business of any financial economy. Decentralized Finance democratize the lending process by allowing everyone have access to it and access to pool of investors. Dharma protocol aims to solve this problem, allowing people lend and borrow currencies decentralized.
Stablecoin is an asset that provides a stability price, for example there is Tether, each token Tether represents 1 USD. This is extremely useful to have fiat money represented in digital economy. Once the crypto users has increased, the stable coin provides opportunity to convert fiat money into crypto assets and of course avoid positions in volatile asset as such Bitcoin, Ethereum and others. In order to provide trustful stablecoins Gemini Dollar, USDC have been launched those own tokens, and more people have been used.
Tokenization is the process to represent good or services using blockchain technology. Also there several possibilities to use Tokens, it can be used to represent stock, bonds, commodities, security, contracts and derivatives. Bizanc DEX provides the infrastructure to generate a native tokens, or event to deposit ERC-20 tokens from Ethereum network to Bizanc DEX.
Tokenization benefits:
- Accessible, several markets are not strict to reduced numbers of investors;
- fractional, is possible to represent 0,002 token house, cars etc;
- Liquidity, allow people sell and buy it easily;
- Bureaucracy reduction;
- Opportunities to create markets;
Decentralized Exchange are a platform that allows users to trade digital assets such as Bitcoin, Biz and Ethereum. Decentralized Exchanges are responsible to provide exchange between assets without a middlemen and allows users have control of their own funds. Protocols as such Bizanc and 0x provide a decentralized digital trading.
On of the main points of Decentralized Finance, is the problem it solves.
- Financial access;
- Financial censorship;
Financial access refers the opportunity of any individual have access to financial services as such lending, loan, mortgages, insurance, investiments and others. Allow unbanked people or remote populations be part of new global economy. Decentralized Financial applications only needs a internet connection and device as such smartphone, computer or any other to become accessible to anyone, it is much efficient, avoid frauds and provide transparency.
Financial censorship, when for some reason government agree to shut down account or access to company’s money. For example some company that’s does not agree with some policies. The company could be bankruptcy once the money is frozen and basic financial services would need to pay employees pay clients and run the business. Otherwise Decentralized Finance applications will provide access to those services and to pool of lenders to have access to loans, payments, trades, and any other services.
Conclusion
Decentralized Finance — DeFi applications open source technologies that is changing the current financial system by disintermediate and democratize it. Several services will be completely changed based on Decentralized Finance protocols. For sure this will change the world and increase the possibilities for several different applications
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Bizanc aims to provide a fully Decentralized Exchange and easy adoption.
Using metamask or electrum wallet, you are able to deposit, withdrawal and trade any of assets as such Biz, Bitcoin, Ethereum and any ERC20 tokens listed.
For further information, please get in bizanc.io
whitepaper: https://bizanc.io/documentos/Bizanc-whitepaper-draft.pdf
userguide: https://bizanc.io/documentos/EN-TutorialTestnet.pdf
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Please access to: bit.ly/2Jf9CXr
References:
- https://news.wealth365.com/decentralized-finance-an-emerging-alternative-to-the-global-financial-system/
- https://tokeneconomy.co/defi-vs-fintech-d152bae2585c
- https://www.mycryptopedia.com/what-are-decentralized-finance-defi-applications/
Thanks for reading!
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