“The Internet is programmable information. The blockchain is programmable scarcity,” said Balaji Srinivasan, a serial entrepreneur, angel investor, and essayist. He was co-founder of Counsyl, Teleport, 21.co,21 Inc and Earn.com. He is the former chief technology officer of Coinbase and former general partner at Andreessen Horowitz.
With the huge increase in cryptocurrency investment, individuals and institutions are now starting to explore decentralized finance (DeFi). A misconception is that cryptocurrencies are only used as a medium of exchange. Thanks to DeFi, technology has brought every financial service you can imagine, whether lending, borrowing, paying, or derivatives, onto the blockchain. Let’s focus more on this emerging space. The Findora Block network is an evolution of blockchain technologies such as Bitcoin and more recently the ongoing decentralized finance (‘DeFi’) revolution, however, like the aforementioned technologies, it has its origins as an advancement of centralized finance (CeFi). Findora Founders enables assets of any nature – dollar, bitcoin, equity, debt, and derivatives.
What is DeFi?
Decentralized finance (DeFi) is based on the concept of equal partners, which removes middlemen from the system. Leveraging on the philosophy of equity and self-fulfilling “smart contracts” on blockchain networks, DeFi democratizes finance and replaces traditional centralized institutions such as banks, brokers, and NBFCs (Non-Bank Financial Companies).
DeFi uses smart contract technology on a blockchain network without human intervention. This reduces the chance of errors and increases efficiency.
Some of the main attractions of DeFi for many users are:
- Eliminate fees charged by banks and other financial companies for using their services.
- You store your money in a secure digital wallet instead of keeping it in the bank.
- Anyone with an internet connection can use it without permission.
- You can transfer money in seconds and minutes.
Here are some ways that DeFi technology can be very useful.
Decentralized, secure, and transparent:
There is no central body that controls DeFi applications. Instead, DeFi apps are run by smart contracts that anyone can check and verify. You can also participate in the DeFi application management process by voting on platform proposals.
DeFi gives you complete control over your wealth:
Traditional financial services are tightly controlled by the central office that manages them. However, such a gatekeeper has many disadvantages, such as high intermediary fees, low transaction latency, barriers to entry, and more. Most importantly, with traditional financial services, you have less control over your money.
DeFi can be a tool to end corruption and monopolies:
Unlike traditional financial systems, DeFi applications are run by the people who use them. For a proposal to be accepted, there must be a majority consensus. Furthermore, as already discussed, DeFi applications are public and anyone can audit their transactions. Hence, there is no place for corruption in the DeFi space.
