Why Decentralized Energy (DeEn) is Necessary to Power the DeFi Revolution
DeEn must be considered a critical component to DeFi if we are to build a truly accessible, efficient, and transparent new world.
Decentralized finance, or DeFi, is transforming the way people and organizations trade assets and use financial services. It grants individuals transparency and freedom, improving our society with a decentralized system.
The financial sector is a crucial place to ignite the paradigm shift, but it’s not the only part of human commerce that can be vastly improved by this concept. Energy sharing has also long been a centralized, opaque system that consumers have little to no control over.
In order to achieve a true decentralized vision, where ALL value flows freely in an accessible and borderless world, decentralized energy needs to become a core component to the new DeFi system we are building.
DeEn, powered by Lition, aims to accomplish just that.
What is DeFi?
DeFi, or Decentralized Finance, is the collection of financial smart contracts, decentralized applications (DApps), and protocols built on top of blockchain’s such as Ethereum. Smart contracts are programs that allow the transaction of assets in a secured manner. The contract’s terms are predefined and enforced by the Blockchain, so no trust or intermediary is needed. DApps use smart contracts as logic to carry out more complex transactions and services on decentralized technology. They offer services such as: Borrowing and loaning, earning interest on assets, holding assets in stablecoins, and many other financial services previously needing a bank or third party.
To provide a global platform for everyone to have access to financial services, and to allow people to independently control their financial well-being. All transactions are transparent so anyone can audit and verify them. No third party is needed, so no permission from an entity is required. As a result, this reduces fees and makes transactions quicker than traditional methods. DApps are also interoperable on a global scale, so they can communicate and build on each other to form new services. The possibilities are endless.
DeEn is a Necessary Evolution of DeFi
It’s time to apply these same concepts to another sector that is behind the times: The energy sector.
What good is all the freedom and accessibility of DeFi, if we’re still forced to purchase dirty energy through unnecessary middlemen using an inefficient, centralized and outdated power structure?
If we can build a world with decentralized financial solutions that are available to everyone, why shouldn’t we simultaneously build the same infrastructure for one of our most precious resources — energy?
Moreover, as the DeFi “machine” continues to grow, the system itself requires more and more energy to run and maintain. The source of that energy is currently unclear. The DeFi space requires DeEn to detach itself from state/corporate owned energy dependencies and become truly decentralized.
An integration with the DeEn sector is paramount to achieving the fair and sustainable world we ALL want to live in.
There is Still Work to be Done
The world is transitioning to a new sustainable future. The EU has set a carbon-neutral goal for 2050, where solar and wind technology are at the forefront of this transition.
However, a big obstacle in the way is the current energy system. It’s a system that was designed to be centralized, with only major power generators, not a system with tens of thousands of solar panels feeding the grid every day.
Innovations like an Interconnected Super Grid in the EU are solving these issues, so with proper technology and policies in place, Decentralized Energy can become the de facto method of powering the world’s economy.
That’s why Lition is committed to spearheading the movement to build a decentralized infrastructure and help usher in a new era of innovation, transparency and efficiency.
With global momentum in the energy transition, recent commitments across the EU to support the movement with new legislation, and DeEn from companies like Lition, everything could soon change.
Same Core Principals
Decentralized Energy (DeEn) incorporates the use of DApps and smart contracts on Ethereum to conduct transactions and trade energy assets. DeEn has the same structure, advantages, and logic as DeFi. It allows consumers to know exactly where their energy is coming from, how it is produced, and ensures that every single kilowatt-hour (kWh) is accounted for. It empowers consumers to choose where their electricity comes from, and change it quickly and securely.
A use case that lies at the heart of the DeFi movement are decentralized marketplaces, where trades of digital assets are executed in a peer to peer fashion and facilitated by smart contracts.
A perfect example of a decentralized marketplace is Lition’s very own Energy Exchange — a peer to peer (P2P) energy trading platform that is open and direct to consumers. Using smart contracts and blockchain technology, unnecessary middlemen are eliminated; this allows for affordable green energy, producers earning higher yields, and the promotion of sustainable energy.
Progress is Happening, Today
As of publication, DeFi has over $3.68B in total value locked, and continues to grow at an unprecedented rate. DeEn must be united and integrated with DeFi if we are to build a truly accessible, efficient and transparent new world.
There is extraordinary progress being made in both the finance and energy sectors, and we’re seeing a radical change in what’s perceived as possible. While both movements are still fighting to make up ground in today’s regulatory landscape, it’s not so hard anymore to imagine the impact that DeFi and DeEn will have on the world in the future.
If you’re inspired by the potential of a new decentralized energy system that serves and empowers everyone, everywhere, come join us.