Decentralized Finance Development- Everything You Need to Know!

Vanessajane
Nov 12, 2020 · 5 min read
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Though the DeFi space is nascent now, it can play a game-changing role in the way conventional financial systems function. It offers individuals irrespective of their income level or geographical location access to basic financial services and applications without the interference of any intermediaries in the system. Hence, the unbanked sections of the population are the biggest beneficiaries of Decentralized Finance development. Decentralized Finance (DeFi) is being developed on platforms like Ethereum, EOS, TRON, and IOST.

Why Ethereum Is the Pioneer of Defi Development

What Is the Aim of Decentralized Finance Development?

The Advantages Offered Through Decentralized Finance (DeFi)

The Major Challenges to Defi Development

Related: DeFi Lending And Borrowing: Transforming Traditional Financial Services

The Future in Store for Decentralized Finance Development

The problems faced with smart contracts can be solved by extensive audits, organizing bug bounties, and having a collaborative and supportive approach while building new solutions for the world. If every single tool, smart contract, DApp can interact with each other and enable digital assets to easily flow between each blockchain network, it will increase DeFi’s liquidity, utility, and usability by many times.

It also has to take progressive measures to overcome the issues of low liquidity, unintuitive user experience, capital inefficiency, and uncertainty in regulation across the world. Many flash loan and arbitrage attacks have resulted in losses of funds for users without any chances of recovery. Token prices have also been getting pumped and dumped after a few hours leading to outright scams affecting the credibility of the growing DeFi industry.

The projects being developed currently are building applications for the next generation of financial networks to transform the world of money. The current financial system suffers from problems like unequal access, social discrimination, transaction censorship, lack of wealth protection due to inflation and economic downturn, counterparty risk, and a complete absence of transparency.

Summing up:

Jurisdictional issues also affect the large-scale implementation of DeFi as financial sectors are highly regulated in many countries, and DeFi does not have any central party taking any amount of responsibility for providing services. Since there is a lack of a documented legal relationship between the user of a DeFi platform and the counterparty, it can lead to a severe challenge in case the user seeks protection from his creditors by filing a petition for relief under the law. Despite some bottlenecks, Decentralized Finance (DeFi) can change certain aspects like decision making, risk-taking, and record-keeping of the traditional financial system.

Security Token Offering (STO)

ICO's are passe Security Token Offering is now in Security…

Vanessajane

Written by

VanessaJane is a Blockchain Consultant, been in the Software Development Industry for the last 4+ years.

Security Token Offering (STO)

ICO's are passe Security Token Offering is now in Security Tokens are financial securities that offer an array of financial rights to the investor.

Vanessajane

Written by

VanessaJane is a Blockchain Consultant, been in the Software Development Industry for the last 4+ years.

Security Token Offering (STO)

ICO's are passe Security Token Offering is now in Security Tokens are financial securities that offer an array of financial rights to the investor.

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