What is Decentralized Finance?
Decentralized finance (known as Defi) is possible due to the emergence of crypto technologies such as Ethereum and blockchain technology. Thus, many decentralized applications (DApp’s) were created and developed using Ethereum. In this way, you can transact with many cryptocurrencies and tokens. DeFi platforms make use of smart contracts, digital assets, NFTs, and much more.
Clearly, decentralized technologies are transforming an already colossal industry. Try to imagine millions of distributed computers, investors, and liquidity providers located in many places around the world, in order to aggregate more decentralization, transparency, quality of the network, and sustainability of the protocol or ecosystem.
How to Use DeFi Protocols?
Currently, decentralized finance platforms allow many forms of use, for example, Yield Farming, cloud storage mining, staking, swap, blockchain games, lending and more. The most dedicated enthusiasts always discover a different way to appropriate decentralized technologies to balance their portfolios.
The ways to enjoy DeFi are endless. Some protocols allow exchanges to be carried out with extremely cheap and fast transaction fees. Some decentralized exchanges such as Uniswap for example allow a token to be changed by another effortlessly and with complete liquidity, as well as yield farming platforms like Harvest Finance. Risks exist, and you need to study and get confidence in your decisions.
Why Is Everyone Talking About DeFi?
We can begin by analyzing the disruptive potential of DeFi. It allows people to choose and obtain a new form of finance. In addition, at the time I write this article, there is already over $70.19B of total value locked on DeFi technology protocols.
I must also point out that it has provided many jobs and new opportunities for technology creators to innovate and put into practice their skills. Programmers, marketing professionals, designers, and technology experts have won job vacancies in this sector. It is therefore also creating real-world economic growth.
There are still very few accreditations formalized for the technologies being built. Decentralized finance is a formative sector. Clearly, disruptive technologies are highly positive and contribute to more people and give access to the financial system without barriers.
Will the World’s Money Totally Decentralize?
Some people are trying to imagine the future, but understandably it can be hard to predict. After all, we know that the technological advances of DeFi protocols are constantly surprising us, but we still have difficulty visualizing all nuances of what will happen in the coming years. Regardless, I like to think we can try to imagine a little.
2037: The planet has more financial freedom. People work honestly and earn their payments with coins of their choosing. Transactions and exchange of products and services are faster, maybe even instantaneous.
The streets are safer and crimes have been reduced, after all, security and privacy systems have become more critical than ever before. In addition, the cleaning of cities and concerns about the dangers of the emission of harmful gases and sustainability are mandatory, humans are more conscious and respectful of each other.
Coming Back to the Present Moment…
Anyway, we can imagine a whole scenario, but we still have no certainty about how our future will be with decentralized technologies and the many other fantastic things created. So, keep thinking and creating hypotheses and sharing comments and ideas.
I believe that financial decentralization is positive and moves an entire ecosystem that allows ordinary people to have passive income and access to new financial systems. So it’s worth knowing more.
The Best Practices for the DeFi Market
You must be aware that the Defi market is very recent and is adapting and improving over time. In addition, you need to study a lot and practice reading whitepapers, protocols, tokens, aggregators, and more. When you study more, you can make more informed decisions.
The market study is essential, and creating a strategy around your goals is very valuable. Find out that decentralized finance can mean freedom for everyone to access money. The success of DeFi is a reflection of several factors: transaction fees, transaction speeds, and the possibility of users exchanging their fiduciary currency.
The constant collaboration of the innovators in the ecosystem optimizes the gears and multiplies the possibilities and challenges that can be overcome. For many companies with a vision of the future emerging, it may be difficult to bet against this giant known as DeFi.
In conclusion, you need to seek knowledge and discover the news about decentralized technologies. Digital finances are widely accessible to everyone. So if you want to learn more about the potential of all this, keep notifications enabled and be sure to interact to get your questions answered.
Comment your point of view and share.
Thank you very much for reading!
About the author:
Roney Laurent, 28 years old, Brazilian, growth hacker, tech guy, and cryptocurrency specialist.