In light of the forging, I want to say a big welcome to the newest community in hive #deFi and it's collaboration with #project.hope and #hodlcommunity.
In my post I'm going to give a overview on what is DeFi and how is it different from traditional finance?
Before getting right to it I'll like to define some terms; DeFi and Traditional finance
DeFi;
It's an acronym for Decentralized Finance, an ecosystem focused on providing reliable financial services based on vast network with no ruling power.Traditional finance;
University Herald Traditional finance simply states that investors don't make financial decisions on emotions.
There is the assumption that the investor and the market are rational and their decisions are based in the information gathered.
Presently, DeFi is at its beginning phase. It included different level of decentralization for every decentralized applications shortened as DAPPS.
The broad spectrum of DeFi campus includes the following objectives;
To discover talents of those producing contents relating to DeFi without the hive community and appreciate their efforts.
To teach hivers all about DeFi, learn from one another and grow our crypto currencies.
Some of DeFi projects are listed below;
- Alternative Savings
- Analytics
- Asset Management Tools
- DAOs
- Decentralized Exchanges
- Derivatives
- Infrastructure & Dev Tooling
- Insurance
- KYC & Identity
- Lending & Borrowing
- Margin Trading
- Marketplaces
- Payments
- Prediction Markets
- Stablecoins
- Staking
- Tokenization of Assets
How is DeFi different from traditional finance?
Decentralized finance and traditional finance share a lot of similarities but the major difference can be seen in the fact that traditional finance uses intermediaries to complete a single transaction while DeFi transactions occurs between individuals without the involvement of intermediaries.
Decentralized finance just involves the use of good contracts to hold collateral from receivers and deliver interest to the lenders.
Whereas in the traditional financial world, commercial banks usually give interest to people and enterprises who open bank deposits with them in terms of allowing the bank to make other operations using their deposit.
There are dos and donts that one must take into cognizant. It's an online platform and it's subject to scams inform of lookalike websites, click baits among others
Do
- Make a good research;
When sourcing it's evident that one should evaluate the source of information. Try to watch out if the information is coming from a reliable source or a paid advert.
Dont
- Don't invest in a lot at once;
Ever heard of the saying, "don't put all your eggs in one basket". Well the same first for DeFi. Give it a try with a little and personally evaluate if one is satisfied with their financial services.
Currently I have no experience with DeFi campus. I just heard about it a while back and I decided to make a post on my understanding of all I learnt.
This interpretation is solely for me. I'm not in any way using it to influence the opinion of others.
