Power is centralized in the hands of those who control money in a world where money is power. People all over the world suffer as a result of their reliance on them, as their financial opportunities dwindle. Individuals must regain control of their financial futures, and thus their lives, if power is to be decentralized and returned to them.
Fintech and traditional finance failures
During the COVID-19 pandemic, world governments printed tens of trillions of dollars in a panic to keep their economies afloat, diluting citizens’ purchasing power globally. Inflation is now on the rise: 6.8 percent in the United States, 4.48 percent in India, and 3.8 percent in the United Kingdom. Governments around the world have made it abundantly clear that they can print as much money as they want, regardless of the cost. People are tired of being dependent on the state’s policies, which rob them of financial opportunities, such as money printing, bank bailouts, trade wars, and business subsidies.
Fintech has the potential to reduce as well as increase access to financial services. Insurance rates are determined by inhumane automated systems, Wall Street’s big players manipulate the markets, financial institutions harvest people for their data, and governments take a cut of every dollar citizens earn before they’re paid.
However, this is only true for those who are fortunate enough to have access to financial services in the first place. While bank accounts and loans are common in Western countries, many people in developing countries do not have any financial access at all. College loans, homeownership, insurance coverage, investment opportunities, and stable pay are all foreign concepts to the unbanked.
A New Economic System
DeFi is an acronym for Decentralized Finance, which refers to a new type of financial system in which individuals use cryptocurrency technologies to provide financial services to one another without the use of centralized authorities or middlemen (like banks and escrow services).
Blockchains, which are decentralized records of transactions, and smart contracts, which are bits of software that run on decentralized computers and enforce agreements in cyberspace, power DeFi. Blockchains and smart contracts, when used together, enable trustless financial cooperation in which all financial agreements are automatically enforced. Banks, credit agencies, loan officers, and escrow accounts were no longer required. Blockchain and smart contracts replace them all, removing middlemen, increasing financial efficiency, and lowering entry barriers.
Nobody can prevent others from joining DeFi because it is decentralized. Anyone can access cryptocurrency trading, peer-to-peer loans, and high-yield savings programs by visiting a DeFi platform in their browser. Here are some additional advantages to DeFi:
- Unbanked people can use DeFi to bank themselves.
- Individuals can earn passive income by providing services to others using DeFi.
- There are no credit scores, so everyone has equal access.
- Growing DeFi ecosystems are significant investment opportunities in and of themselves. middlemen or centralized authorities (like banks and escrow services).
So, why hasn’t DeFi taken off? The truth is that DeFi is still in its early stages, and some kinks have yet to be ironed out. While the engineering behind DeFi platforms is safe and secure, the majority of them are difficult to comprehend and use. DeFiChain, a people-oriented DeFi platform, can assist in this regard.
DeFiChain believes in empowering individuals and is aware of the needs of its users. This motivates them to develop decentralized financial services that are quick, intelligent, and transparent, and that are available to everyone. Let’s take a look at some of the things they’re working on to make DeFi easier:
- A safe platform based on Bitcoin’s principles.
- A comprehensive learning platform with simple DeFi guides and educational videos.
- A full-fledged mobile app for exchanging tokens and mining liquidity for up to 200 percent + APR rewards.
- An innovative platform that allows users to mint stock-based tokens, giving them exposure to securities.
DeFi’s Minor Victories
While it hasn’t yet reached mass adoption, DeFi is making waves and generating buzz. Adidas, Coca-Cola, and other well-known companies have entered the DeFi NFT market. There have been a few successful launches of Bitcoin ETFs around the world. Homes are being sold using the blockchain. Sponsorships for sports teams are obtained from cryptocurrency projects. El Salvador has also made Blockchain legal tender. DeFi victories are popping up all over the place, and the world is slowly becoming a freer place.