We often talk about it, but do you know what it is? Let’s find out!
DeFi is short for decentralized finance. This term combines various financial projects and protocols on the blockchain that focus on removing the need for middlemen. DeFi is different in that it expands the scope of blockchain application: from simple transfer of digital assets to more complicated financial operations such as deposits, loans, insurance, etc.
What is the point of DeFi?
Full individual control over your assets is something the traditional banking system and other financial institutions simply can’t provide. The DeFi technology is what brings this vision closer to fruition. Many innovative financial product developers have already chosen to go with open protocols and decentralized platforms.
The key advantages these solutions provide are:
- Users don’t need to trust middlemen with their assets and pay unnecessary commission fees.
- All protocols are open source. People from all over the world can build upon it to create new, even better financial solutions.
Today you can find hundreds of DeFi projects on the market, with new ones coming out all the time. Finding a decentralized asset management solution that suits your needs is easy.
How are DeFi currencies different from other cryptocurrencies? DeFi pros: user has full control and responsibility for his assets and sensitive information. No human factor — all transactions are carried out through automated smart contracts. Full access from anywhere with an Internet connection. Open source. Innovative.
DeFi platforms and tokens are becoming more and more widespread and now cover almost all facets of financial activity where it was previously impossible to do business without the help of middlemen.