Why DeFi?
With DeFi you control of your own assets without any intermediary.
Though many new-age banks and other firms that promise to provide more control to the users, still, you are trusting in them to manage your funds. The objective of DeFi is to provide the users with full control of the funds with the help of decentralization and blockchain technology. Also, nowadays many developers of financial apps are preferring open-source protocols for trading through decentralized exchanges.
Here the protocols are completely open allowing anyone to build new financial products on top of them. This also makes developers across the globe collaborate with each other to create new products leading to faster innovation and a secure network.
The platform facilitates anyone to store, trade, and invest their assets in blockchain securely and earn a much higher return than from the traditional financial system. Since there no middlemen handling your asset, you have complete control over your investments.
Why Defi Getting Popular?
First, regulators have been behind the curve and Decentralized Finance Development (DeFi) has been able to flourish in this vacuum. For instance, in the traditional or normal way of lending, there is a legal requirement that lenders and borrowers know one another’s identities. And that the lender assesses the borrower’s ability to repay the debt. In DeFi, there are no such requirements. Instead, everything is about mutual trust, preserving privacy, and complete security to the funds.
One of the major challenges in financial innovation is the hostile environment created by rules and regulations of the banks making the traditional trade more complex.
But with defi, the platform operates based on smart contacts. Smart contracts are basic lines of code that stay on a blockchain. They automatically complete the transactions when certain conditions are the same, assuring the users to enjoy highly scalable, secure, and low cost to execute. An essential tool for all blockchain developers, smart contracts have accelerated the adoption of blockchain technology. They also contributed to the increasing momentum of the DeFi industry as a whole.
This allows users to enjoy anonymity and complete privacy. Unlike others, you don’t have to specify your details like name, financial history, or other things
