Disruptive DeFi

What is DeFi ?

Decentralized finance sticks to the concept of a system that functions without any intermediaries, such as banks, insurances, or clearinghouses, and is operated just by the power of smart contracts. DeFi applications strive to fulfill the services of traditional finance but in a completely permissionless, global, and transparent manner. DeFi is likely to have a significant impact on how banks operate in the future and even has the potential to shift the structure of the whole financial system at a macroeconomic level. With DeFi, you have access to all the functions accessible with a crypto token. You can take out loans and insurance, do derivatives, crowdfund and gamble.

DeFi vs traditional finance

Firstly, DeFi facilitates non custodial wallets this provides total control over funds for a user. The prime reason why non custodials are gaining huge momentum is because they provide users with individual access to their funds. The users do not need to look up to any third party to manage their funding or perform any related activity. Statistics show that 66.5% of crypto holders are relying on non custodial and mobile storage. In traditional finance, assets are held on behalf of asset owners by a licensed service provider or custodian. A person who prefers instant withdrawals might consider switching to non custodial wallets as they do not need confirmation from a third party. Secondly, In DeFi, all operations are conducted in a publicly available blockchain. Hence, it is the main trust source.

Traditional finances are regulated by a set of laws and licensed financial institutions. Thirdly, there are no boundaries that users of DeFi need to overcome. They need to do a few simple actions to enter the DeFi world, such as setting up an online wallet, finding a reliable platform, choosing a project, and adding their funds. DeFi account setup is much faster and less tedious compared with traditional finance system organizations. Any person can become a user of DeFi at any moment. Moreover, DeFi developed peer to peer lending and borrowing solutions. Blockchain enables a faster and easier verification process in lending and borrowing applications. Simultaneously ensuring safeguards for counterparties in transactions.