DeFi — 3 reasons why it is the future
Why Decentralized Finance (DeFi) offers great potential?
Cryptocurrencies are on everyone’s agenda these days. However, it isn’t easy to generalize technology and its potential. On the one hand, there is Bitcoin, the first cryptocurrency that appeared in 2008. Since then, Bitcoin has attracted attention as a digital value protection tool, and its market value has risen to over $ 1 trillion.
But first: What is DeFi?
DeFi is an acronym for “Decentralized Finance,” a term for various financial applications in cryptocurrency or blockchain intended to disrupt financial intermediaries. This makes them available to anyone rather than through intermediaries like banks or brokerage firms. Unlike a bank or brokerage account, a government-issued ID, Social Security number, or proof of address is not required to use DeFi.
As a result, banks, traditional financial institutions, and even those skeptical of cryptocurrencies have had to take Bitcoin seriously. On the other side are intelligent contracts and DeFi. Although there are years for this technology, which is still in its early stages, to reach widespread use, it reveals a precious potential when both intelligent contracts and DeFi usage areas are considered.
Discover more about the history of money!
Why DeFi is the future?
Reason 1: CeFi (Centralized Finance) is not ethic
Financial institutions always have a conflict of interest with their customers. Banks want to fill their safes simultaneously as you, and they do this under the name of additional fees. Nodes in a DeFi protocol have to give you competitive gas rates, or someone else will provide you with the financial services you want.
Reason 2: Earn More
Service providers can work directly with customers on a standard protocol without a central profit-cutting agency. A great example of this is the NFT industry, where artists like Mila Kunis sell their new show Stoner Cat directly to their fans without using distributors like Netflix. The fact that the artist evaluates his work and does not give commission to the intermediary without the need for any intermediary is too significant to be underestimated!
Reason 3: Personalization
Using different services of different banks requires having an account in all relevant banks. With DeFi, you can use one service to lend, another benefit to track your financial situation, and another service to borrow. You can choose the perfect combination of financial assistance based on your needs. You are the only boss! Each transaction is done by a different node and is secure with blockchain technology.
Over time, DeFi will become an ecosystem where money and value can be sent just as information and data are transferred today, and the functionality of the infrastructure will not limit users. Still in doubt that DeFi is the future?
Everything you need to know about NFT is compiled in this article. Check it out!
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