DeFi 101
Decentralized finance, powered by blockchains, eliminates centralized intermediaries.
That means you don't need a bank account or a credit score to access financial services.
So... how are DeFi projects able to deliver everything from loans to derivatives without the involvement of a single human being?
Two words: smart contracts.
These contracts are part of the construct of the future of money. They execute automatically when certain conditions are met.
Some protocols offer more competitive terms for loans than major banks - as well as higher interest rates.
DeFi can:
- Make remittances cheaper
- Speed up cross-border payments
- Allow anyone with a phone to manage money
There are benefits for current crypto investors too, as assets remain in their control at all times.
Given the DeFi space is only a few years old, there have been some headline-grabbing hacks and thefts. Some decentralized exchanges are also a little complicated to use if you are not familiar with crypto.
That being said, this nascent industry has taken great strides when it comes to security and usability.
If you’re interested to learn more about DeFi, check out my KZitem video here: • What is DeFi?
#crypto #finance #futureofmoney
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