Hi, and welcome to another article!
I thought I would make this post clarifying what DeFi is for people that might not be too sure.
To start with DeFi stands for "Decentralized Finance", and is essentially a collection of smart contracts allowing anyone to manage their finances, without any central governing body such as a bank or anything like that.
DEXs (like CubFinance and Uniswap), staking portals, portfolio managers and even publishing platforms (like LeoFinance) all constitute DeFi.
DeFi is set to take on CeFi (Centralized Finance) because of the following advantages over CeFi:
- Higher earnings: On most DeFi platforms, you can garner interest rates of over 500% a year. On most CeFi platforms, the max you can get is 12%. This huge difference is why most people move towards DeFi.
- More freedom: For most CeFi products, you need to register and complete KYC before you can use the product. However, all you need to use DeFi is an address.
- Less management required: Because DeFi is run autonomously, there is less management required for DeFi products. This means less downtimes and less technical failures, because everything will be programmed to perfection knowing there will not be support afterwards.
In my next guide, I will go more in-depth into DeFi tools. Follow for more content!