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What is DeFi and why do we need it?
Decentralized Finance (DeFi) is a hot topic in cryptocurrency and it's a genuine threat to centralized financial institutions and a giant leap for blockchain.
Many countries experienced immense economic collapse forcing businesses to close it's doors and leaving citizens without jobs at a time when hyperinflation rendered their life savings worthless, with the most recent case being Venezuela as a result of excessive banknote printing to compensate for the decline in oil production, collapse in oil prices and the country's debt.
In late 2018 LocalBitcoins started seeing a rising volume of Venezuelans resort to cryptocurrencies as a store of value to avoid further losses as a result of inflation.
Weekly volumes of Venezuelan Bolivar on LocalBitcoins. Source Coin Dance
Storing our hard earned funds in local currencies is getting riskier every day. Trusting centralized banks with our hard earned funds, who take more than they give, while making fortunes in interest from our earnings is not ideal either.
In A Nutshell
Blockchain is a transparent, modification resistant distributed ledger. By design it's data is resistant to tampering and it's records are permanent.
Decentralized Finance is a sector refering to digital assets, Decentralized Apps (Dapps) and smart contracts focused on financial inclusion. It's essentially a new monetary system putting you in control of your funds and aiming to bank the unbanked, eliminating third parties and hidden fees, potentially eliminating many if not all of the risks involved in using centralized banks, some of the commonly used instances of DeFi includes;
• Non-Custodial Wallets
• Decentralized Remittance
• Decentralized Lending
• Decentralized Exchanges
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Always remember,
NOT YOUR KEYS, NOT YOUR COINS!