Iive Bit Presents What is DeFi and why should you care?

DeFi has been all over the crypto news lately, as its value continues to grow. With a total market cap of $275 million at the start of 2019, DeFi surpassed $5 billion in stored funds in August 2020. So what is DeFi, and why is everyone so excited on this subject?

Why you should care about DeFi

DeFi is the abbreviation for Decentralized Finance and describes a modular set of dapps (decentralized applications) that can be used to perform various financial transactions online. Unlike traditional centralized finance where your data and money are stored in silos controlled by private or government banks, DeFi stores information on a blockchain. The rules of financial transactions are controlled by smart contracts, and useful information about market conditions and coin prices is often transmitted through oracle networks, which provide smart contracts with data that is not stored on their blockchain. .

You should be concerned about DeFi if you've ever felt concerned about your bank's control over your money. If you've ever found your account frozen for "suspicious" behavior (while you were just on vacation), or had to jump over it simply to transfer money from one account to another, or if you've been shocked at the cost of sending money to a loved one in another country, then you probably understand the desire to have more control over your money.

What is DeFi doing to give users additional control thru their finances?

This lowers the bar for many forms of investing, such as real estate. This removes human bias from the equation, ensuring that you won't get a worse interest rate or service denied because of your race, gender, age, or where you live. It makes it easier for people in unbanked and underbanked areas (both remote and urban) to access the financial tools they need. This gives users the ability to vote on the direction the platform is taking, in order to best serve the interests of users, rather than those of a business.

What DeFi currently offers users

DeFi is still a young industry. Although its growth has been meteoric, that $5 billion is still only a tiny fraction of the money in the world, if not in the crypto-economy. However, it is growing and changing every day as new platforms appear to present new offers to users.

The future of DeFi

What will DeFi look like in a year, or 5 years or 10 years? It's hard to say. Every day brings new developments in the industry, so it is almost impossible to predict. Our hope is that lawmakers and regulators will craft laws that will allow DeFi to thrive, and that over the next few years we will see mass adoption as more and more people seek alternatives to centralized banks to the old that no longer meet their needs.

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