DEFI — Is the future of finance decentralized? Why is DEFI needed?
Decentralize finance (DeFi) is changing the way that people all over the world think about money faster than any previous financial revolution. Banks, which have monopolized the way we’ve accessed money since antiquity, are finally seeing their status being challenged. Now, it’s DeFi which is starting to provide an alternative that could turn the economic landscape on its head and democratize access to finance.
This seismic shift in power away from governments and banks and towards real people is long overdue, particularly in developing nations where DeFi is already emerging as a tool for remittances and small loans. Financial inclusion is another significant advantage that DeFi can deliver, particularly when 1.7 billion adults remain unbanked.
What is DeFi and where did it come from?
DeFi builds on three major waves of blockchain innovation across the last decade, each of which began with deep skepticism and has since progressed to acceptance and adoption.
The first era was defined by Bitcoin (invented in 2009), which gave us the distributed ledger, or blockchain, designed to facilitate peer-to-peer transfers of a non-sovereign digital asset. The second wave was defined by Ethereum, which drew from the same underlying distributed, censorship-resistant architecture: however, unlike Bitcoin, Ethereum’s native programming language (Solidity) can be used to create any conceivable application, transforming it into a globally accessible supercomputer. The third wave was the initial coin offering boom of 2017, which financed a range of projects, some of which have started delivering on their promise of a decentralized financial ecosystem.
DeFi is the fourth wave, and it builds on a combination of these innovations.
With DeFi, anyone in the world can lend, borrow, send, or trade blockchain-based assets using easily downloadable wallets without having to use a bank or broker. If they wish, they can explore even more advanced financial activities — leveraged trading, structured products, synthetic assets, insurance underwriting, market making — while always retaining complete control over their assets.
Why is DEFIAI needed?
DEFIAI is aimed at releasing the true values of decentralized finance, and providing the all-round digital asset exposure and diversified products and service for the users, so that everyone could access, create and trade the ideal synthetic product agreement without restrictions.
There are several attempts to create synthetic products through the similar mechanism in the market, but serious defects exist, weakening the trust. Including:
• Low fluidity leads to high slippage and large pips.
• Compared with the actual basic products, there is poor price tracking for synthetic products.
• It leads to the high transaction cost caused by the Ethernet congestion.
• UI/UX is poor when applying Exchange
• The number of assets available for synthetic transactions is limited.
• It lacks the professional knowledge of the basic financial products.
DeFiAI is automatically operated on the public chain. It is decentralized, is not controlled artificially and is not regulated by the policies. The settlement should not be reviewed. With the simple operation, the user only inputs with one key. DeFiAI could match the strategies intelligently and distribute the fund to maximize the revenue according to the amount of funds. For example, if the user borrows in the debit and credit, it is the deposit and you could undoubtedly obtain the stable high-interests from the lender in the DeFi capital pool. Then, DeFiAI puts the stable return in the super-high return pool (such as liquid mining) and automatically obtains compound interest in various return pools.
Meanwhile, DeFiAI is decentralized, intelligent, safe and efficient, the transaction fee is low, the strategy could be quickly switched and it is always aimed at high-yield mining. Hence, it is a perfect experience in “deposit means value adding”. DeFiAI’s artificial intelligence brings the perfect operation experience to the users.
DeFi is here, and it’s here to stay. Some skeptics think of it as an idealistic movement, destined to forever be relegated to the shadows of the internet. But due to its novel innovations around settlement efficiency, risk management, and accessibility, DeFi is likely to become a central piece of the financial infrastructure not only for cryptocurrencies, but also potentially for all other classes of markets: In the not-too-distant future, people will sell tickets, Apple stock, pork belly futures, socks, and much more using DeFi protocols, likely with portals providing access to that infrastructure with separate regulatory regimes and business operations.
It won’t spell the end of the existing financial services sector, as some hardcore believers may argue (just like the internet did not altogether kill print). But the opportunity in DeFi for traditional financial services and other companies here will be in allowing them to focus on their core structural advantages — custody products, prime brokerage, fiat on-ramps, customer service, and so on — while sourcing liquidity and products directly from decentralized protocols.
Most importantly: each of these waves of crypto attracted tens of thousands of engineers and entrepreneurs, which is exactly how the future of DeFi will be built.