The History of DEFI
Bitcoin, Ethereum and other early cryptocurrencies offered the users an opportunity of safe p2p trading without involvement of third parties. Cryptocurrencies decentralized issuance and storage of money. Cryptocurrency owners received full control of their assets.
The idea of reproduction of traditional financial tools using the blockchain technology has become the next step of the decentralization of the traditional financial system.
Launch of Ethereum (a cryptocurrency and a digital platform) on July 30th 2015 maximized potential of blockchain in the financial industry and encouraged the launch of new startups and projects that formed the ecosystem of decentralized finance.
The DeFi system consists of apps, built on decentralized networks, blockchains with no access rights and p2p protocols for simpler crediting/borrowing or trading of financial tools.
DeFi users can access protocols of open crediting, tokens issuance and investment platforms, prediction markets, stock exchanges, exchanges and stable coins.
The leaders of DeFi financial tools’ growth are a collateral platform MakerDao and open crediting protocols Dharma and Compaund. The great trio of the decentralized finance system. 80% of issued ETH are stuck underpinning the work of these 3 projects.
The cost of apps functioning within the DeFi system reached 500 million dollars by June 5th 2019.
The DeFi community is growing. Any project that meets these 4 requirements can become a part of it:
1. The project builds a service for blockchain or is based on blockchain.
2. The project is from the fintech field.
3. The project is based on general standards and is compatible with other DeFi projects.
4. The project meets the principles listed above.
According to the Concensys 2019 research DeFi has grown to become the leading sector of the cryptocurrency market.
Binance.com analysts find the DeFi ecosystem to be the best way of using blockchain technology.
It is estimated that DeFi can potentially give access to decentralized financial services to up to a billion users.
The appearance of cryptocurrency, blockchain technology and the DeFi system has started the reboot of the global financial system.
