DeFi: The Power Behind the Latest Revolution in Crypto
Since the inception cryptocurrency market achieved several significant landmarks. In its decade long evolution crypto market and has turned into a legitimate asset. Derivative market maturation, government or central bank digital currency development, cryptocurrency trading platform token sales, coin offerings, and Securities and Exchange Commission are few significant milestones. But in this 2020, the DeFi revolution is completely taken the crypto space by storm.
Like always, this means there will be astronomical gains in the token price of DeFi projects. Many new decentralized derivatives exchanges are experiencing monumental price surge since launch. DeFi markets are today showing huge growth, especially because of the total value tag in them. According to an analysis, over 8.5 billion was locked in different DeFi contracts last month. The same was a mere $1,000 a year back. The figure says it all. In the last few months, the interest in DeFi projects has sky-rocketed.
What is DeFi?
What led to the sudden surge and demand in DeFi? Why the interest in crypto space exploded? Well to make it easy, DeFi is decentralized finance. This means the application of different financial services using Blockchain like decentralized technology. DeFi projects aim to provide different institutions that don’t need middlemen or intermediaries or centralized entities to operate.
Presently faith and trust within the existing financial system are mainly based on regulatory bodies and financial institutions. But the million-dollar question is — Have they instilled necessary trust? Security vulnerabilities, delays, and errors are frequent and raising concerns among all. Also, these institutes haven’t come forward to fix the age-old system and keep trust. Moreover, there have been very less signs in the last few decades or years of financial institution’s willingness to find efficient, innovative, and cost-effective solutions.
Now because of all these limitations, DeFi is slowly gathering steam. DeFi is all about creating a whole network of global financial services that can seamlessly work and operate without involving any intermediaries. This also means financial institutes can operate independently without any holding an inefficient or unfair stake in the whole system. To make it simple DeFi is an open financial network. As crypto traders can easily buy and sell cryptocurrency Australia, now DeFi will make that possible for traditional financial institutes. With DeFi you can send or receive money without joining any private network services or banks.
Why it is so useful?
The decentralized technology that underpins new infrastructure effectively eliminates the approval, permission, or involvement of middlemen, as it is with normal institutes today. Even in this 21st century, all financial institutes are operating in a centralized architecture. A smart contract eliminates all middlemen and facilitates execution as well as completion directly between two parties. Decentralized applications running on these contracts facilitate the peer-to-peer transaction. This new system also allows users to directly access a plethora of financial services. Smart contacts now enable users to send money from one party to another transparently and securely like that in a popularcryptocurrency trading platform.
DeFi is the new wave in the crypto community, a buzzword which is garnering attention everywhere. A decentralized financial system is the next big thing which will give complete freedom to common individuals. In today’s age of internet and technology, every individual has the right to gain control over his or her finances. Now financial institutes can be easily run by Blockchain, computers, and rules which is free from permission.
With the traditional system, it takes a long time to open a bank account and then the age-old verification process before you can use the services. With a popular cryptocurrency trading platform, it takes a few minutes to complete verification and start trading cryptocurrencies. These platforms need very less information and there is no tedious form filling up or other processes, making things easier for commoners. The best platforms allow you to buy and sell cryptocurrency Australia in few clicks from your smartphones. Now imagine the same with your regular financial transactions. That is where DeFi is different and so effective. Users don’t have to wait or grant permission from anyone to use their own assets.
What is driving DeFi today?
DeFi has suddenly become a hot topic, the reason being its high-yielding opportunities. Users are today depositing tokens within the DeFi to generate high-yield in a quick time. DeFi assures a higher rate of return than a conventional savings account, hence there is all the buzz. Yield farming is all about moving money from different markets or investments to gain the highest return. However this may also involve riskier investment options, but high yield result compensates for the risk taken.
Also, returns can be boosted by other means, where an investor can receive token alongside the rate of exchange return. The main idea is that usage of the cryptocurrency trading platform increases the overall token value, thereby creating a positive feel.
In this short period, DeFi has made a breakthrough in global financial services. This new concept is reinventing how common people can use their hard-earned money and other financial affairs. More importantly, it is providing a robust and smart alternative to age-old financial systems. Any popular cryptocurrency trading platform provides a multitude of trading options, same will be the case with upcoming financial services now. Thanks to DeFi. Any individual with an internet connection and smartphones can get access to DeFi services. This will bring democracy to the financial world. Isn’t it the best thing for every common individual on this planet?
Bottom-line
With significant problems coming up in the global financial system off late, the need for revolution was always in the cards. DeFi now seems to be the catalyst that will only gather pace in the coming days. At a time when scams and frauds in the global financial system are growing concerns and trust issues among common people, the time has come for the transition. Migration from political currencies such as Dollars and Euros to decentralized currency is the need of the hour. The DeFi world will be technologically advanced, where no one will accept or use politically manipulated currencies anymore.
Covid has changed the world. In the coming few years the change will be accelerated because of dramatic changes all around. It is now about smart technologies and innovations to overcome economic depression. Defi and cryptocurrencies are undoubtedly the most important concepts that hold trillions of dollars. It is time to make inroads for developments in these fields for a better future. Like traders buy and sell cryptocurrency Australia online, traditional currencies can be operated without third-parties with DeFi. Now that’s the power of DeFi!
Originally published at https://www.ausfinex.com on October 22, 2020.
