The past few years have seen movements in the financial technology sector that are bound to transform services from payments to smart contracts. One of these emerging systems creating so much buzz is decentralized finance. It comes as no surprise that several cryptocurrency marketplaces, including the Dan Schatt and Domenic Carosa-led Earnity, have pushed for decentralized finance in recent years.
Decentralized finance, or DeFi, describes financial applications built on blockchain technology. DeFi apps are decentralized, meaning there is no single point of control. This also entails that they are trustless, meaning that users can interact with each other without the need for a third party to verify their transactions. Some examples of DeFi applications include decentralized exchanges, decentralized lending platforms, and decentralized credit scoring platforms.
Revolutionizing an Industry
Because DeFi allows users to interact without the need for a third party, it can help reduce transaction costs and increase transparency. Additionally, DeFi applications can help promote financial inclusion by allowing users to access financial services without a bank account or assistance from traditional financial institutions. Finally, DeFi applications can help promote financial stability and independence by enabling users to store their money outside the conventional financial system.
Looking Forward to a Brighter Future
DeFi is evolving rapidly, and new applications are being developed continually. Some of the most exciting advancements include the development of decentralized stablecoins and decentralized exchanges. These DeFi applications could help further promote financial stability and reduce the risk of price volatility, which has been the hallmark of most crypto.
Visionaries like Dan Schatt and Domenic Carosa of Earnity champion DeFi because it offers a way to store digital assets without relying on centralized exchanges. This system is highly beneficial for crypto buyers since they can trade their cryptocurrencies on decentralized exchanges without worrying about the security of their funds.