What Is Decentralized Finance (DeFi)?

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Usually, when someone does a financial transaction, there is an intermediary involved. This means that there are several parties who are overseeing the details of the transaction. They can stop or decline it if they want.

The DeFi movement is based on the idea that the financial system should not be controlled by a few big companies. People who believe in this idea want the financial system to be decentralized so that it works better and faster.

There are a lot of DeFi players in the market. The majority of big apps are developed on Ethereum, which allows for the creation of decentralized applications. They employ smart contract technology to remove or minimize human or corporate gatekeepers’ roles.

DeFi providers are creating alternatives to traditional financial services and products. Existing DeFi applications include stablecoins, decentralized exchanges, and peer-to-peer lending services. DeFi is also the basis for the growing world of prediction markets.

Some people believe that DeFi (decentralized finance) will shape the future of financial services. A lot of money is being invested in DeFi start-ups. However, there have been some high-profile failures in the DeFi field, and it is still very new.

DeFi is not the same as embedded finance. Embedded finance is a movement to make it easier for people to use banking and payment technologies.



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