zuozuo
Oct 14, 2022 02:55 AM 0 Answers
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DeFi (or “decentralized finance”) is an umbrella term for financial services on public blockchains, primarily Ethereum. With DeFi, you can do most of the things that banks support — earn interest, borrow, lend, buy insurance, trade derivatives, trade assets, and more — but it’s faster and doesn’t require paperwork or a third party. As with crypto generally, DeFi is global, peer-to-peer (meaning directly between two people, not routed through a centralized system), pseudonymous, and open to all.

Why is DeFi important?

DeFi takes the basic premise of Bitcoin — digital money — and expands on it, creating an entire digital alternative to Wall Street, but without all the associated costs (think office towers, trading floors, banker salaries). This has the potential to create more open, free, and fair financial markets that are accessible to anyone with an internet connection.

What are the benefits?
  • Open: You don’t need to apply for anything or “open” an account. You just get access by creating a wallet.

  • Pseudonymous: You don’t need to provide your name, email address, or any personal information.

  • Flexible: You can move your assets anywhere at any time, without asking for permission, waiting for long transfers to finish, and paying expensive fees.

  • Fast: Interest Rates and rewards often update rapidly (as quickly as every 15 seconds), and can be significantly higher than traditional Wall Street.

Transparent: Everyone involved can see the full set of transactions (private corporations rarely grant that kind of transparency)

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