Those who have studied history well may remember the city-states of medieval Europe. At that time, caravans of merchants traveled from one city-state to another, carrying luxury items and news from distant places. It was this lifestyle that gave these merchants freedom of movement and choice. This concept is very similar to what Michael Ondaatje describes in his book The English Sick. The author imagined complete freedom, without borders and nationalities, which limits people in their pursuit of development and progress.
Today, greater access to the financial markets through decentralized finance marks the beginning of an open world. DeFi has been very positive when it comes to wealth accumulation and cheaper financing, and has given new meaning to the term “finance for all”. By eliminating intermediaries using blockchain technology, DeFi expands the volume of financial transactions while significantly reducing costs. DeFi is definitely the future of the financial industry and other industries. There is only one question left: how fast can we get there?
DeFi generally packaged
It’s amazing how in just ten years we’ve moved away from the concept of Bitcoin (BTC) as a digital currency (and a personal bank in the traditional sense) and come to Wrapped BTC, farming and all other cryptocurrencies. alchemy.
Basically, there are several types of DeFi applications, which reflect the depth of their integration and the extent to which they are used. Decentralized exchanges (DEX) are a large class of DeFi operations, and offer authority-free trading in cryptocurrencies. Stable currencies are linked to external assets such as fiat currencies and precious metals. Lending platforms and prediction markets are also widespread in this sector.
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As you know, DeFi allows you to harvest and extract liquidity, and provides a niche way to profit from cryptocurrencies that are now widespread.
Entire cities are now adopting the new model and preparing to welcome crypto-savvy citizens. For example, Seoul has developed a strategy to become a global leader in blockchain technology in 2019. The then mayor, Park Won, soon unveiled a plan to promote Blockchain City in Seoul, which would be the basis for the fourth industrial revolution. Even before the presentation, many administrative services already used blockchain technology in 2018. However, the new plan will expand the reach of the technology to include direct democracy, online verification and mileage management through the issuance of S-Coin, Seoul Citizen Cards and more.
The proposed encrypted city in Nevada is another matter. This is an experiment by Jeffrey Burns, a cryptomillionaire who bought land in Nevada and decided to lay the foundation for building a city based entirely on the blockchain. The initiative met with opposition from the local government, which became one of the main obstacles to the founding of a new city. The element of decentralization scared politicians of the possibility of losing control. Recent congressional hearings on Web3, however, give hope that we will find common ground on this issue.
In particular, Dubai launched its Dubai Blockchain Strategy initiative, which has become an important part of the UAE Blockchain Strategy 2021, which aims to move at least 50 percent of public transactions to the blockchain. The government saw an economic opportunity for positive change in its innovative approaches. Dubai is currently attracting blockchain missionaries and nomads from all over the world.
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It is beginning to become clear that the inability of the authorities to realize the potential of DeFi and blockchain can lead to economic delays in their countries. The launch of a central bank’s digital currency (CBDC) has been an important sign that governments are moving towards using blockchain-based technology.
The Atlantic Council has developed a tool to track all countries in the various stages of their CBD projects. Please note that Ukraine, China, Sweden, South Africa, Malaysia, Singapore, Thailand, South Korea, Saudi Arabia, the United Arab Emirates and many other countries have already launched beta versions of their CBDCs. Meanwhile, Nigeria, the Bahamas and their own eastern Caribbean countries have launched their own digital currencies from the central bank as business enterprises.
Some view authorities not only as advisory institutions but also as active service providers. DeFi-driven global economic freedom will allow governments to choose which ones provide the best services in terms of quality, speed and efficiency. This especially applies to taxation of cryptocurrencies.