DeFi : Your Sure Way to Financial Independence

 By 

Amtu Faith Sokojinwo U17MM1147


DeFi an acronym for Decentralized Finance is an evolution in the finance powered by blockchain technology and based on secure distributed ledgers similar to those used by cryptocurrencies. It has the capacity of reducing entry barriers and bypassing protocols of intermediaries involved in financial services by recreating and improving the traditional financial systems in a Decentralized manner. That is to say, there is no need for banks or bankers, provides trust and eliminates the need to pay charges to intermediaries, lenders and borrowers have a better platform for transactions with far better rates than banks. DeFi is not regulated by any governmental agency hence making it decentralized.

DEFi offers advantageous impact such as eliminating increased trust issues through its efficiency, low cost, decreased limitation to financial transaction and fosters innovation. It allows safe, fast and transparent payment systems giving users an exclusive right and control over their transactions such as data and assets. DEFi also provides soothing ecosystem to cryptocurrencies trading at any time. Some examples of DEFi includes: Aave(AAVE), Uniswap(UNI), Synthetic (SNX) and Cardano DEFi Project.

Users typically engage with DeFi via software called dapps (decentralized apps). Unlike a conventional bank, there is no application to fill out or account to open. Some of the ways people are engaging with DeFi today are: 

Lending: Lend out your crypto and earn interest and rewards every minute - not once per month.

Getting a loan: Obtain a loan instantly without filling in paperwork, including extremely short-term flash loans that traditional financial institutions dont offer.

Trading: Make peer-to-peer trades of certain crypto assets  as if you could buy and sell stocks without any kind of brokerage.

Saving for the future: Put some of your crypto into savings account alternatives and earn better interest rates than youd typically get from a bank. 

Buying derivatives: Make long or short bets on certain assets. Think of these as the crypto version of stock options or futures contracts.

Some of are the downsides?

Fluctuating transaction fee on the Ethereum blockchain makes active trading get expensive.

Depending on which Dapps you use and how you use them, your investment could experience high volatility.

Location: 810106, Samaru, Kaduna, Nigeria

Comments

  1. Paul UsmanSeptember 27, 2023 at 12:33 AM

    so how does one start up

    ReplyDelete
    Replies
    1. Amtu FaithSeptember 27, 2023 at 10:07 PM

      Click on this link to learn more.
      https://www.coinbase.com/learn/wallet/how-to-get-started-in-defi#:~:text=Getting%20started,decentralized%20applications)%20like%20DeFi%20apps.

      Delete
  2. Timothy IbitoyeSeptember 27, 2023 at 11:16 PM

    DeFi is a promising new technology with the potential to revolutionize the financial system. However, it is important to be aware of the risks involved before investing in DeFi.

    Thank you for the insightful post.

    ReplyDelete
  3. Hope DimkaSeptember 28, 2023 at 12:31 PM

    DeFi is truly what everyone looking to own his/her money needs!

    ReplyDelete
  4. AnonymousSeptember 28, 2023 at 5:58 PM

    This is future of banking. Needs met at instant.

    ReplyDelete

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