DEFI are a new financial ecosystem, decentralized, global, transparent, resistant to censorship, without intermediaries and easily accessible.
The DEFI or Decentralized Finance , are an alternative to traditional finance. Traditional financial services are all products related to means of payment or money management offered by a bank, a financial institution, insurance companies or investment companies, among others.
These traditional finances carry with them a series of obstacles, limitations and regulations that make them little accessible for some and not very attractive for others. Such as high commissions or control by banks and regulators.
Thanks to Blockchain and criptomonedas , the DEFI have come to upgrade, improve and globalize finance such obsolete, placing them at the reach of everyone no matter where you are, if you have access to the Internet anyone can use them .
The traditional financial system
Today's financial system is the center of most economies. All the functionalities of this system are controlled by centralized authorities such as governments, banks and other financial institutions.
People deposit their money in banks and other financial institutions to save and often deposit fixed and recurring deposits for profit.
The first problem is that when someone deposits money in banks or other organizations, they have no control over their assets. You have little to no knowledge of where you invest your money and how these corporations manage it. So this system lacks transparency.
These centralized institutions invest that accumulated money in the stock markets, in addition to granting loans at high interest rates and making big profits. But only a fraction of these are returned to depositors.
One of the most unfair and under-addressed issues in the existing financial system is inequality in financial services. By some estimates, more than 1.7 billion people around the world do not have access to bank accounts or financial institutions of any kind.
To address these drawbacks of financial systems, the world now has Decentralized Finance (DeFi).
What is Decentralized Finance (DEFI)?
The DEFI are a new financial ecosystem, decentralized, global, transparent, resistant to censorship, without intermediaries and easily accessible, where each user has full control of its assets.
The goal of decentralized finance (DeFi) is to provide a global and open alternative to all financial services that people use today. This only requires an internet connection and a smartphone.
The tools to carry out these decentralized finances are digital assets, decentralized applications (dApps), smart contracts (Smart Contracts) , protocols and decentralized exchanges (DEX).
And the alternatives that this new financial ecosystem offers are decentralized loans, decentralized oracles or non-custodial token exchanges, among others.
Ethereum leads decentralized finance from the beginning with Ethereum-based projects, such as MakerDAO or Augur, but little by little other large platforms in the sector such as EOS, Algorand or Tezos, among others, are preparing to claim their share of the pie.
What do DEFI offer?
Global access to financial services
DeFi applications provide global access to financial services, although local restrictions may apply. To access DeFi platforms such as Maker or Compound Finance, users only require an internet connection and a smartphone, regardless of their location or country.
Complete control over assets
DeFi offers users complete control over their assets as anyone can safely store, trade, and invest their assets on the blockchain, and no middleman handles these assets except smart contracts. Therefore, users have complete control over their assets.
Privacy, security and transparency
With DeFi, users have custody of their wealth and can securely transact without validation from a central party. As all activities are recorded on the blockchain, all transactions are publicly available. Therefore, this offers better transparency than a centralized system, where records can be easily modified.
Payments and settlements
There is a vast and expensive network of intermediaries involved in cross-border payments. But these transactions take days to settle and they charge a hefty fee for their service. DeFi has the potential to completely eliminate these costly intermediaries, making remittance services much more affordable and efficient for the world's population.
DeFi promises much more than this. Censorship resistant transactions and high returns can also be achieved through DeFi. DeFi applications also provide a flexible user experience and interoperability with other products.
DEFI loans
Among the financial alternatives offered by DEFIs, we can highlight decentralized loans, which have much higher returns than those offered by traditional market funds, even reaching 18%, compared to 2-3% in the traditional market.
Thanks to decentralized finances, you can request a loan without the need for intermediaries.
Despite the scalability problems in its network, if there is a project associated from the beginning to the DEFI it is Ethereum, for example, its products with the stablecoin DAI, have been hailed as immensely interchangeable financial products.
But, although Ethereum has been there from the beginning, it cannot be trusted as competitors are starting to follow suit.
EOS
EOS is a high-performance blockchain platform, one of its missions is to support decentralized applications that provide all the benefits that blockchain technology offers.
“When we talk about DeFi, ETH failed. Ask bitfinex, bancor or any team that wants to implement a simple order book on ETH. The design of EOSIO is based on the initial decentralization lessons of the financial platform bitshares. Speed, low latency, neat indexing, floating point, and c ++ are only available in EOSIO. EOSIO has RAM, network bandwidth resource leasing, bancor, token name bidding, and various anchor token designs on the market. The decentralized future is in EOSIO «.
Algorand
Algorand seeks to provide the same services that Ethereum offers, only with better performance and putting an end to the common security, scalability, and decentralization issues that other blockchains have.
“Our Proof-of-Stake protocol is the first of its kind to support scale, open participation, and purpose of transactions for billions of users. All backed by a sustainable business and a recognized team of experts. " they say from their website.
As for DEFIs, as announced by its Founder Silvio Micali , Algorand is working on the generation of new fungible tokens and the execution of multi-party atomic transfers (AMPT).
Tezos
Like its competitors, Tezos works to be a tool for the development of smart contracts and decentralized applications (dApps).
“The Tezos Foundation is pleased to announce that 14 new grants have been issued for projects submitted in response to your most recent Request for Proposals (RFP). The Foundation considered proposals for the following categories as part of this RFP: Applications created using smart Tezos contracts (with special interest in finance decentralized or applications "DeFi") "They say in the blog of the foundation tezos
Of these projects, the one focused on DEFIs is Protofire , a development team focused on smart contracts.
conclusion
DeFi has the potential to change the current financial landscape in a positive way. But it is still a small market and has a long way to go. With new projects and protocols entering the market, the world can look forward to a true decentralized financial system for years to come.
The exponential growth of DeFi in recent months has led, according to important crypto references, to the latest rise in the price of cryptocurrencies, commissions, volumes and activity on the Ethereum network.
DeFi sets up a true financial revolution:It is the simplest and most direct way to invest, leverage, take on debt or generate profits with completely innovative instruments.
Stablecoins are a type of cryptoassets that set their price to traditional assets, whether they are fiat currencies such as the dollar or the euro, for example, as well as gold and silver.
This "pairing" seeks to reduce the volatility that cryptocurrencies such as bitcoin or ether still present.The advantage of stablecoins is that they can be transferred digitally much more easily and by avoiding volatility, they could be adopted for everyday use as a replacement for traditional currencies, as a form of digital cash not issued or monitored by a state authority , such as a Central Bank.2 .
LoansOne of the most popular types of applications in the DeFi ecosystem is open lending or open lending protocols.
The advantages of taking and granting loans in an open and decentralized way compared to the traditional credit system are several and include the instantaneous settlement of transactions, the ability to collateralize digital assets and the absence of credit controls.By being built on public blockchains and containing the guarantee of crypto verification methods, DeFi loan services minimize the amount of trust required and reduce counterparty risk in addition to making the taking and taking and making it available to a larger public.
And, with new remarkable technological advances, it only gets simpler and better by the day.Blockchain technology, which is the most common in the currency market, is one such brilliant innovation.
From healthcare to finance to the modern media sector, blockchain has reached every industry.
Let's look at how blockchain can help mobile apps and why you should use blockchain for your company.How does blockchain technology elevate mobile applications?
Blockchain networks are made up of a chain of blocks that contain information and are encrypted with strong cryptography.
Each block contains the transaction data and the timestamps of the previous blocks.
Transparency The method of authorizing applications for sale on Google Play and Apple's App Store appears to be unpredictable and considered unfair.
What is Blockchain?In simple words, the blockchain is a unique distributed record that stores the data and verifies its integrity.
By using a different set of cryptography based technologies, Blockchain assures that transaction continued into the blockchain database which is steady.Blockchain technology manages the every currency transactions.
But Blockchain is not limited to just currency but enlarges to any domain where anything of value is implemented, be it contracts, personal information, health records, business data and much more.
Advantages of Blockchain TechnologyEfficiencyTransparencyTrustFlexibility Our blockchain solutions offer paradigm shifting abilities to the businesses that are in search of unmatched scalability at the operational level.
Development Platforms for Blockchain TechnologiesEthereum is perhaps the most consistent and widely spread platform for the creation of viable blockchain systems.
Despite the fact that the whole platform is relatively new and has only been developed a few years ago, Ethereum has been taken its place at the forefront in the world of developing platforms for blockchain technologies.
Depending on the popularity and hype acquired by blockchain technology in the last few years, it won't say that blockchain is definitely a game-changer and also it can be considered as the next big thing to occurred in the inventions of the internet.
In simple words, it stores a record of each transaction that can be accessed by everyone who is all into the networks, therefore eliminating the requirements of a centralized authority.
It stores and collects the information in an encrypted blockchain with much safety and security.Let's see at some of the top real-world blockchain technology applications over various industries here.1.
It can help to trach the batch and serial numbers of prescription drugs.
Nowadays, some of the hospitals have started to record the patient's data with the latest ways of handling the data and they are using blockchain technology to store each patient's record confidential.
Patient's diagnoses report can also be stored so that they can easily track the history of the patient's health conditions.3.
