Why is everyone talking about DeFi (simple explanation)

What is DeFi?

DeFi is the concept that practically every financial service we are familiar with may be modified and recreated decentralized.

You have, indeed. Everything relating to payments, loans, borrowings, deposits, interest, and even wealth management is well known. But, because of blockchain technology, anything can be decentralized.

As a result, the opportunities are vast, as is the work to be done.

And, if the terms decentralization or blockchain are unfamiliar to you, know that it is a method of improving all the internal procedures required to generate financial services and goods.

DeFi has pushed the Bitcoin idea even farther, which was innovative at the time and continues to be so now. However, it is still absurd to envisage worldwide money that a financial organization would not issue. I'm writing it myself, and despite my expertise with the product, I'm still stunned.

Having said that, Satoshi Nakamoto, the founder of Bitcoin, provided us with the fundamentals and developed a new way of viewing things, particularly money. A decade after discovering this new monetary notion, the participants gradually moved a stone into the structure after the ecosystem had grown. Finally, all financing (rather than money) was merged into this new decentralized paradigm.

What does DeFi look like now?

After reading these few words, you're probably wondering what DeFi's current operating services are.

Rest assured, we will not be discussing AI in the past tense since many of its applications are still 'in process.' No, with the blockchain, we will see pre-existing projects and apps.

DeFi services have been available for almost two years, and the industry is still expanding. As of this writing, the total quantity of Ether in the DeFi market has surpassed $1 billion.

When I said the massive market, I failed to mention that this is simply the beginning.

The majority of this capital is invested in lending and borrowing platforms. It is, indeed, DeFi's flagship - at least for the time being.

It suggests that the primary sites of decentralized finance are associated with cash lending sites (crypto or FIAT). These are the websites where customers may borrow bitcoin or fiat money (euros, dollars, and so on) at interest rates. Simultaneously, users with digital currencies deposit their funds to earn interest on their capital, as with the best platform Veneraswap.

Super, isn't it?

Veneraswap is an excellent example of a decentralized finance site. A site where you can earn interest and borrow cryptocurrency or Venera.

Or is this a great formula worthy of first-time crypto enthusiasts? Well, it's time to tell you the benefits of decentralized finance.

Why are decentralized finance platforms are good to customers — compared to traditional finance platforms?

Although I like to write on this topic, a bullet point here will be necessary to determine how drastic the advantages are (thanks to decentralization):

• Speed of money transfer

We are far from the endless time it can take for a traditional bank to allocate credit).

• No administrative paperwork and administrative weight

Registration is as simple as a few mouse clicks.

• Customer profiles are documented online

You can submit your supporting documents and identification papers with a single click.

Availability 24 hours a day, seven days a week: no agency, no appointment, no clumsy or incompetent employee. Each client has access to their money and wallet.

• Money Security

Although this is the Achilles heel of cryptocurrencies, all sites today know how to protect themselves and their clients from hacker attacks. On the other hand, traditional finance is not immune to hacking attacks.

• Customer equity and ease of borrowing

Unlike traditional finance, where each customer is evaluated based on their financial history, blockchain puts everyone in the same boat. Without any discriminatory regulations, anyone may borrow (within the legal framework that allows the company to operate). It was a tribute to a time when black lives mattered.

• Dependence on the platform

To borrow, one must deposit collateral. There is no such thing as terrible motivation or a bad player. We can only have what we have. DeFi systems encourage customers to hold their assets and help them get additional funds. Although decentralized financial services.

Conclusion

In reality, with a bit of perspective, we can add numerous benefits, but this will impact other sectors at the crossroads of finance and economics.

So, here's a short post to explain what DeFi is and what decentralized finance comprises.

The subject remains huge and somewhat tricky. Of all, this is still a young sector with a lot of potential.

Similarly, we can observe how decentralized finance may help many nations' economies. Because the continent has already learned a lot and improved its entire economy due to Veneraswap's discoveries, it looks that DeFi will take the shape of a cake.

We are passionate about decentralized finance, as many other articles will always seem to understand better how exciting this new era is.