The importance of DeFi in the evolution of the economy
Mainly in Ethereum, but eventually in other blockchains such as Solana or Binance Smart Chain, DeFiis a concept that is becoming more and more relevant in the evolution of the economy.
All financial services managed on public blockchains such as Ethereum are known as DeFi or “Decentralized Finance” Although this is an elementary concept, especially for those with moderate blockchain knowledge, it is important to establish some of the main characteristics of DeFi as a starting point to understand its important interaction with other blockchains and its influence on the diversification of the digital tokens.
The DeFis allow common financial operations, such as loans, interest generation, buying insurance, trading, savings and more. All this with a fundamental difference: decentralized finances are faster and do not require intermediation.
The activity of the blockchain is almost by definition P2P, or what is the same, a direct interaction between two people and not through a central system, the DeFi are consequently, what characterizes these operations at a financial level.
Why is DeFi so important?
If Bitcoin as a precursor to Decentralized Finance, it was a disruption in the financial sector, leaving giant intermediary structures like Wall Street out of the game, and all the economic expense and in terms of time that this implied, the evolution of DeFi is underpinned to be the default trend for financial operations globally. In addition to making centralized systems obsolete, DeFi guarantees the democratization of financial markets, being more open, free, fair, accessible and above all: infinitely more agile.
Advantages of DeFi
The advantages of DeFi are diverse, and can be isolated in the following:
- Accessibility: The only requirement to participate in DeFi is by creating a wallet.
- Privacy: It is not necessary to compromise any personal data such as name, address and email.
- Flexibility: DeFi guarantees the ability to carry out operations under any conditions without problems of transfer management or payment of commissions.
- Speed: Both interest rates and rewards, and the speed of transfers are particularly fast compared to traditional financial activities.
- Transparency: Contrary to the secrecy exercised by intermediary companies, everyone involved in a DeFi transaction can have full access to all transactions
Currently, all users can participate in DeFi through the use of decentralized applications. Its use does not require all the protocol for opening accounts that conventional banks usually require.
The operations that any DeFi user can perform with the simple creation of a wallet, range from obtaining loans, p2p operations such as buying and selling, savings in crypto assets, purchases of tokens and various assets and plus.
Beyond the myth of speculation surrounding decentralized finance, its use and integration as a financial tool means long-term investment potential for users of this cryptographic utility.