DeFi: What is it?
Decentralized finance, or DeFi, provides financial services without relying on brokerage firms or banks.
Which are the largest DeFi projects?
DeFi projects like Aave, Maker, and Compound have been around for a long time and become the most adopted by institutions over the past few years.
How do these DeFi projects function?
You can borrow and lend cryptocurrencies using the aforementioned protocols
You can borrow immediately if you can provide a certain amount of collateral
You can also lend out cryptocurrencies and earn interest.
Other DeFi initiatives:
Uniswap, a decentralized exchange on the Ethereum platform, lets you trade any cryptocurrency for another.
As a result, you won't need a middleman to exchange one cryptocurrency for another.
Synthetix—synthetic assets—allows you to purchase tokenized stocks, giving you access to the stock market without having to use a stockbroker or traditional exchange.
How will the DeFi industry develop in the future?
According to estimates from the World Bank, providing financial services to the world's 1.7 billion unbanked individuals is DeFi's most significant opportunity.
DeFi can compete with traditional financial systems in addition to providing unbanked individuals with access to financial services.
A single transaction between two parties can take days to complete, and banks and intermediaries often charge the user a significant portion of the cost.
On the other hand, DeFi transactions can be significantly cheaper and take only a few seconds on most blockchains.
