One of the best ways to see the potential of DeFi is to understand the problems that exist today.
- Some people aren’t granted access to set up a bank account or use financial services.
- Lack of access to financial services can prevent people from being employable.
- Financial services can block you from getting paid.
- A hidden charge of financial services is your personal data.
- Governments and centralized institutions can close down markets at will.
- Trading hours often limited to business hours of specific time zone.
- Money transfers can take days due to internal human processes.
- There’s a premium to financial services because intermediary institutions need their cut.
|You hold your money.
|Your money is held by companies.
|You control where your money goes and how it’s spent.
|You have to trust companies not to mismanage your money, like lend to risky borrowers.
|Transfers of funds happen in minutes.
|Payments can take days due to manual processes.
|Transaction activity is pseudonymous.
|Financial activity is tightly coupled with your identity.
|DeFi is open to anyone.
|You must apply to use financial services.
|The markets are always open.
|Markets close because employees need breaks.
|It’s built on transparency – anyone can look at a product’s data and inspect how the system works.
|Financial institutions are closed books: you can’t ask to see their loan history, a record of their managed assets, and so on.
- Applications and Use Cases of Blockchain Technology
- Applications and Use Cases of Decentralized Finance(DeFi)
- How Does Decentralized Finance Work?
- More Applications of Decentralized Finance(DeFi)
- Don't Just HODL Crypto Make Money While You Sleep With It