Centralized financial institutions have been the gatekeepers to financial services in the past. Unfortunately, this has led to high barriers to entry, especially for those without access to traditional banking channels.
DeFi is the use of blockchain technology to decentralize finance. This means that instead of having a centralized authority control financial transactions, they are handled by a network of computers.
This makes the process more secure and transparent and faster, and cheaper. DeFi also allows for new forms of financial products that are not possible with traditional finance.
DeFi works by using smart contracts to execute transactions automatically. These contracts are stored on a blockchain and can only be executed if all the conditions are met.
This ensures that transactions are reliable and secure, as well as transparent. DeFi also allows for peer-to-peer lending and borrowing, which cuts out the need for traditional banks or financial institutions.
Decentralized finance (DeFi) is an emerging area of cryptocurrency that seeks to address these issues by removing the need for a third party. DeFi applications are built on top of blockchain networks and allow users to interact with each other directly.
This allows for equal access to financial services and streamlined processes that are much faster and cheaper than traditional methods.
DeFi also introduces new possibilities for financial products and services that were not possible before. For example, decentralized exchanges allow users to trade cryptocurrencies without relying on a third party.
This can provide greater security and transparency than traditional exchanges. Another exciting development in DeFi is the advent of decentralized lending networks.