What is Decentralised Finance (DeFi)?
Its an umbrella term for peer-to-peer services on public blockchains, primarily Ethereum, faster and doesn’t require paperwork or a thirdy party. With DeFi, one can earn interest, lend, borrow, buy insuarnce, trade derivatives, trade assets etc.
Importance and Benefits
- Fast: Rewards and interest rates update rapidly. Interest can be higher than traditional Wall Street
- Pseudonymous: There is no need of any personal information
- Open: One gets access just by creating a wallet
- Flexible: Assets can be moved without asking for permission anywhere anytime.
- Transparent: Full set of transactions seen by everyone involved(With private corporations its rare)
How people get engaged:
People get engaged via decentralized apps and the ways which people engage with are listed below:
- Trading: Crypto assets peer to peer trades
- Buying derivatives: Trade long or short bets on certain assets.
- Lending: earn interest and rewards by lending crypto
- Saving for the future: Earn better interest rates by putting some of crypto into savings account alternatives.
- Getting a loan: Obtain instant loans without filling paperwork