The crypto lending market is constantly developing! But let’s try to figure out why that is. Why are decentralized financial protocols better than centralized ones when it comes to lending?
CeFi platforms (both virtual and traditional) work on the same principle as most banks. In fact, banks are CeFi platforms by nature. They hold deposited assets, sometimes lending them to third parties, which ensures profit for the depositor, and a loan to the borrower. On paper, this model sounds good enough, but in reality we are stuck with a number of issues such as embezzlement, hacks, artificially low balling interest rates, etc.
DeFi protocols can, on the other hand, allow users to become lenders and borrowers in a decentralized system, and have full control over their money. This has become possible thanks to smart contracts that function on open blockchain solutions, such as Ethereum. In contrast with CeFi, decentralized platforms can be used by anyone anywhere, without the need to submit personal data to a central authority, wait for it to process the data or go through tedious bureaucratic procedures.
As you can see, DeFi solutions are much more attractive.
It is these solutions that will grant the opportunities that users from all over the world need. We are striving towards this very goal: to give people the opportunity to lend and borrow securely, wherever they need it, as well as to make their assets work harder!