DeFi is the general name given to decentralized financial transactions consisting of the words decentralized and finance. DeFi is the name given to financial structures that are not dependent on any center or authority. Detailed information about what is DeFi, DeFi features, what does it do, how to use it, what are DeFi coins, etc. is in the continuation of the content. You can browse here for information about Illuvium coin (ILV).
What is DeFi? DeFi Features!
Systems that are decentralized and lacking decision-making authorities, such as Bitcoin and Ethereum, are ideal examples of DeFi. However, since financial instruments are not limited to sending and receiving money, it would be correct to bring more advanced financial functions to mind when DeFi is mentioned. These include borrowing, lending, decentralized stock market, insurance, shopping, marketplace and the like.
What is the purpose of the DeFi system?
DeFi was launched to build a more democratic financial system after cryptocurrencies emerged for the purpose of freedom. Another most important purpose of DeFi systems is to enable people who do not have access to traditional financial systems to do their financial work.
About 1.7 billion people around the world do not have access to the traditional financial system, namely banking transactions. DeFi systems aim to reach these people, whom the current financial system cannot reach.
DeFi usage areas!
DeFi claims to offer a better system than traditional financial systems. DeFi usage areas can be summarized as follows:
- To be able to transfer very cheap, fast and secure money to all over the world.
- With the established borrowing systems, users can both borrow and lend.
- Ability to tokenize an owned asset. Thus, it both gives a value to that asset and ensures that it can be transferred.
What Are the Disadvantages of DeFi?
DeFi system has advantages as well as disadvantages. In many ways, DeFi aims to radically change the traditional understanding of finance. Being at the very beginning of this change causes there are still open spaces in some areas of this system.
DeFi systems currently have two aspects that may be missing. Although it aims to be usable all over the world, the number of people using DeFi is very small at the moment. As a second problem, so many transactions have to be stored as data in some way. There is not an adequate infrastructure for the storage of these data.
Who is the founder of DeFi?
DeFi does not have a single creator. Decentralized finance (Decentralized Finance or DeFi) emerged with the development of Bitcoin, the first cryptographic, peer-to-peer electronic money system developed in 2009 by the mysterious inventor, Satoshi Nakamoto. However, DeFi applications are built on the Ethereum network invented by Vitalik Buterin. The first major DeFi app is MakerDAO, founded by Rune Christensen.
Caution: The information contained in this content is for informational purposes only. It is not investment advice.
For information about cryptocurrency: https://en.wikipedia.org/wiki/Cryptocurrency