Published in


The World Doesn’t Need Banks, Policymakers or NGOs — It Needs DeFi

The world of finance, we all can acknowledge, is wheeling on a transformatory loop. Centralized finance is slowly becoming a forgotten reality. And every atom of this visible change to the decentralization of global finance is driven by the product and magnificent success of the blockchain and cryptocurrency world.

To a larger extent, a great quarter of the world has come to terms with these nascent terminologies towing the twenty-first century internet into a revolutionary assignment, whether as a participator, a social media rocker or a roadside eavesdropper, with the increasing popularity of NFTs, CIPs (cryptocurrency investment platforms), Web3 innovations, and augmented reality of the Metaverse.

Memes, GIFs, and news outlets tell us more on a daily basis. “Is bitcoin rising to or crashing on the moon?” reads one of the popular funny memes that circulates on the internet every time there’s a down-dive in the crypto economy. The gospel is far-reaching.

Hard to ignore, however, is how most corporate organizations are taking interest in the noise, paying their employees’ salaries with cryptocurrencies and finding new ways to utilize the barnburner of a blockchain. Hence, in a way, all these, with the modeling exchange mechanisms, accumulated to the stark popularity of decentralized finance.

Notably, the high-speed shift from centralized to decentralized model of finance rips open from a counter-responsive standpoint; in fact and in truth, DeFi (decentralized finance) came to the global market as a result of the inefficiencies and insufficiencies that affect centralized finances.

In the age of centralized finances, people had to work great distances to banks or any other financial institution to make transactions. Not to talk about the tedious paperworks, the exorbitant fees charged for the process, and the lengthy time it takes to process the supposed transaction.

And oftentimes, more than anything, there are problems of unaccountability and misappropriation of funds. That’s to say: banks and other centralized institutions serve as middle-men souvenirs who navigate the whole process of the transaction. For example, since they work with a deposit-and-borrow model, someone who is in interested in applying for a loan would need to come to the office and sign quite a chunk of papers and, as if the process isn’t hectic enough, one has to use any of his property (land, house etc.) as a collateral.

Frustrating still, again, is the substantial monetary interest attached to the loan. Through and through, even though they have much liquidity to navigate transactions, nothing equals the numerous risks that trailed the system.

If there was anything decentralized finance brought to the public, if there was anything that the emergence of Satoshi’s bitcoin brought to the frontiers of the global market, it is the realization that there are many posssibilities not yet milked in the financial system.

Even the introduction of blockchain–an efficiently in-built public ledger that stores transaction history in blocks or hashes — toppled the public expectations. And this was what dutifully led to the boominess of DeFi.

It wasn’t only a question of trying out a new expanding technology but rather a question of scaling through the rigorous framework that centralized finance inhabits. At the moment, the total market value of decentralized finance is staked at almost US$90 billion, and the peak, however unbelievably good, is still peaking in explosive notes.

The vision of decentralized finance is to eliminate any interference from a third party whether banks, insurance policies, or stock marketing systems. In a more planer terms, DeFi are financial services built on the blockchain network that uses cryptocurrency as a medium of exchange to scale through intermediaries who might charge fees for the process. And these services, surprisingly, can be engaged from anywhere in the world with just a smartphone and a strong reliable network.

If perhaps you need a loan, all you need to do is to use cryptocurrency as a collateral and, with the help of smart contract, you will be given the proposed money from people who have gathered and stored liquidity or a pool of funds in the blockchain network, and this is recorded on the blockchain the instant the transaction is made. No bank loan officiator, no hard-knuckled customer service, no intermediary of any sort.

The truth is that transactions made through decentralized finance services are more secure, error-free, efficient and utterly flexible than centralized finance. DeFi eliminates the capitalization of power — a process whereby wealthy individuals have more accessibility to these financial institutions than the poor ones who might not have any tangible physical property for collateral.

Anyone can be a part of DeFi cross-chain pool and can either borrow or lend money to others. More importantly, as an open-source network, its users can assess their money anytime, anywhere, without having to worry about sending multiple emails to the financial system or whether there are ATM stands nearby, or waiting for verification services that often take a long time to process a transaction.

This is not to say that decentralized finance does not have its own shortcomings. In fact, there are quite a handful to be put into consideration. In as much as DeFi cancels out the idea of returns on loan applications, there’s a potential risk of making cryptocurrencies highly volatile.

Another inherent problem is that there’s no middleman to retrieve and send back funds when there’s an error in transfer. Nor anyone to repay investors when the smart contracts have been tampered by hackers and scammers.

However, if there’s anything to acknowledge, it’s that these problems are solvable. Even the centralized financial markets have faced their own issue. A major example might be the melt-down of the global economy due to some obscurities in Wall Street.

There’s no doubt that decentralized finance is at its nascency. Its surfaces are even beginning to get scratched, and there’s a bunch of possibilities nesting at its harbor. While regulators in the US, Norway, Brazil and other parts of the world are trying to combat the risks of regulatory violations, new and old technocrats are excavating new ways to create a risk-free DEFi. So much hope in the journey, and it’s now everybody’s responsibility to rein into the twenty-first century magic. Like always, the choice is yours.

CrossFi is a cross-chain protocol that provides liquidity to you for Filecoin staking and rewards.

CrossFi Official Website:

CrossFi DApp Address:

CrossFi Official Twitter Account:

CrossFi Official Discord Group:

CrossFi Official Global Telegram Group:



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store