The fast-growing blockchain technology is positioning the financial services sector on the crest of a wave. Starting from online payments and remittance to cryptocurrency trading and digital asset management, everything is based on the blockchain mechanism. Well, the recent advent of decentralized finance (DeFi) has efficiently fortified the blockchain in the finance industry.
The term DeFi, short for decentralized finance, is backed by blockchain technology. It leverages open-source platforms and decentralized networks to transform the traditional financial space. A variety of blockchain-based decentralized applications are being developed and deployed as alternatives to traditional financial services. Decentralized finance is setting the trend by offering impressive and easy financial features to individuals and businesses. Recent reports say that decentralized finance has grown more than tenfold over the past year.
Benefits of Decentralized Finance
DeFi’s evolution has transformed the financial sector with unprecedented benefits to customers and investors. It has removed the intermediary agencies, and middlemen involvement, and made the financial market more accessible to everyone. Utilizing blockchain properties, DeFi has created investment and business opportunities for the world around finance.
It’s no surprise that decentralization by the term itself clearly indicates what change it has bought in the finance world. Decentralization being the important aspect of blockchain technology aims to move independently without relying on any other corporations. Now, the need to rely upon oversight, server space, data storage, and so on has been waived off with DeFi, powered by blockchain.
With the decentralized approach, the transaction history is being shared across the servers that could be easily accessed by all of the members - from anywhere in the world. So any change to any of the banking and finance data (that is on the blockchain network) can be easily traceable. Well, undoubtedly we are already traveling in the permissionless fintech industry while being independent of third-party interference.
With transparency being one of the blockchain’s nature, all the activities that take place on the blockchain network are open and are shared with everyone. The data on the network is available for inspection and analysis. Also, the data is recorded and stored only after verifying its genuineness. So the open-source DeFi applications with high transparency features eliminated the scams and data violation practices. It’s all transparent today!
The open-source DeFi platforms, powered by blockchain are truly discovering the impossibilities in the finance sector. In addition to the above-mentioned features, decentralization has got high-security powers which makes it difficult to manipulate the stored records on the blockchain network. All the open-source DeFi apps (blockchain-based applications) bring in a convenient and smooth user experience and peer-to-peer networking with enhanced protection against fraudulent activities.
DeFi's various features convey its potential and advantages to each individual and business. And one among them is cost-effectiveness. Decentralized exchange can tackle tough financial transactions or any other non-financial activities with great efficiency. Also, it has made real-world applications simple by eliminating the limitations involved in them. Certainly, no involvement of intermediaries reduced the operational and administrative costs.
Being the stellar of the finance industry, DeFi has taken over various challenges and provided numerous opportunities for financial institutions to grow. So if you are into DeFi and would like to do some groundbreaking work in the DeFi space, count on us. Let’s connect and together build something that’s innovative and incredible!