Decentralized financing (DeFi) is an emerging financial technology based on secure distributed lasers used by cryptocurrencies. The system removes the control of banks and institutions over money, financial products and financial services.
On the other hand, some of DeFi main attractions for many customers are:
1. It excludes fees charged by banks and other financial institutions for using their services
2. You keep your money in a secure digital wallet instead of keeping it in the bank
3. Anyone with an internet connection can use it without the need for authorization
4. You can transfer funds in seconds and minutes
Decentralized finance uses blockchain technology that uses cryptocurrencies. A blockchain is a distributed and secure database or ledger. So, applications called dApps are used to manage transactions and run blockchains.
For example, from anywhere you have an Internet connection you can lend, trade and lend using software that records and verifies financial activity in a distributed financial database. A distributed database is accessible in a variety of locations. Similarly, it collects and aggregates data from all users and uses a consensus process to verify it.
Decentralized Finance This technology enables anyone to use centralized financial models to access financial services anywhere or anytime.
However, DeFi applications give users more control over their money through personal wallets and trading services that cater to individuals.
Decentralized money is still in the early stages of evolution. For instance, it’s uncontrollable, which means the ecosystem is still riddled with infrastructural crashes, hacks and scams.
Above all, the open and distributed nature of the decentralized financial ecosystem can create problems in existing financial control.