Ever had trouble with a bank, or were you always satisfied during opening hours from 9-12 and 1-4 from Monday to Friday? Many centuries after their creations many banks are still in business, but not for long. It is time for a new area. It is time for a new financial system that is powered by blockchain networks. This is called Decentralized Finance (DeFi).
It is easier accessible, inclusive and has no opening hours as it likes 24/7 on the blockchain. Today DeFi products offer joint bank accounts, lending- and borrowing services or currency exchanges. With no middleman!
Everyone can audit all transaction and service. Something that is unthinkable with banks. Until they bust that is.
Here are some of the most important benefits of DeFi:
- No intermediaries or middlemen: Every transaction fee is transparent and mostly goes to sustain the network. This is not the case with legacy financial institutions with obscure rates and absurd situation where you pay fees to a bank that earns money with your money.
- Equal access: User with little capital can participate on equal terms with big market makers. They enjoy the same conditions for interest or exchange rates and other services. Something unthinkable in the legacy financial system where often the big fish eats the small one. Or do you expect to get the same conditions for a loan to finance your house as the CEO of a Global Fortune 500 company? Didn't think so.
- Freedom: You have control over your funds at all time. Although your cryptocurrencies don't sit in the form of a physical gold coin or paper notes that give you the illusion of representing a value, you control your funds. Nobody else. In the legacy financial system you deposit your money and give control away.
Remember: DeFi is still in its infancy. It is not here to make you rich or make you poor, but rather it makes you free. There is risk involved and you should familiarize yourself with it before actively participating but since you are already here, you are on the right path!