DeFi (decentralized finance) is the crypto version of the finance industry.
It refers to financial services like depositing, withdrawing, lending, borrowing money, and many more with the help of smart contracts (a program that runs when certain conditions are met) instead of trusting financial institutions such as banks or exchanges like the NASDAQ.
DeFi comes with all the crypto features because its underlying technology is public blockchains like Ethereum and Solana. If you haven’t already, read our article on What is Solana?
DeFi has a lot of advantages over CeFi (centralised finance) like:
Source: Odyssey DAO
In CeFi (centralized finance), you need to rely on a bank to send money, earn interest, and get a loan.
For example, there was a breach of trust when loans without proper checks were issued to famous industrialists like Nirav Modi, leading to a loss of about ₹11,356.84 crores. It would not have been issued in DeFi because it relies on code, which means every transaction is public and will not be completed if proper checks in the smart contract are not met.
For example, in CeFi (centralized finance), you need to apply for opening an account in the bank before using any bank’s financial services. But in DeFi, you don’t need anything to create your wallet to access any service of a DeFi app.
For example, in CeFi (centralized finance), you don’t know what the bank does with your money. But in DeFi, the process your money goes through is public because the code is public on the internet.
For example, suppose an individual wants to transfer money from anywhere in India to Europe at any time. In that case, there is no way in centralized finance to execute this transaction instantaneously with minimal cost. Still, using DeFi, this transaction can be performed instantaneously at a low cost at any time of the day.
dApps(decentralized apps) are used to access DeFi. Anyone with a wallet can engage with these dApps, so no need to “open” an account with any centralized authority.
Users generally use DeFi applications for
The DeFi scene is bursting with innovation and investment that can change the landscape of current financial systems.
With many rug pulls, high complexity for users, and an unpleasant user experience, it isn’t easy to navigate through DeFi for beginners. To ease everything, Flint provides returns up to 10% p.a. with controlled risk and no lock-in period.
DeFi will continue to grow just as India grows, and Flint will continue to offer its services as DeFi expands further. If you haven’t already, learn How Flint generates 10% returns?
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