Over the past year, the decentralized finance industry has made a splash in the financial sector, relying on blockchain technology to decentralize many banking services. The adoption of DeFi services is increasing regularly and all asset types are moving to blockchain.
With the help of non-fungal tokens that popularize the notion of digital art ownership, blockchain technology is reaching unexpected places, and DeFi is expanding its expansion. These unique and at times very valuable icons are especially important today, when art galleries are closed due to the restrictions associated with the global pandemic and cultural events that occur on the Internet more often than ever before.
Throughout 2020, DeFi has seen an explosive growth in ways to create liquidity through markets for financial products, social symbols and governance, and unique pieces of art. Today, a large number of bitcoins (BTC) are used as a store of value, but that is not what it was created for. Slow transaction times, high fees, and a history of rising value keep Bitcoin from becoming a payment system, but that hasn’t stopped the blockchain industry from building other systems.
The emergence of programmable smart contracts has served as a catalyst for the formation of a modern decentralized financial system, making financial services available to anyone with an Internet connection. The exorbitant central bank overhead has made international remittances slow and unprofitable in most cases. However, through the implementation of a set of interrelated protocols, decentralized finance provides alternative ways of distributing value among different communities around the world.
The traditional financial system works for most people, but it can be much better. While blockchain isn’t quite ready to take the reins into its own hands, modern decentralized networks have big ambitions, and as access to digital assets continues to improve, people around the world are increasingly interacting with the global economy without reliable intermediaries, banks or lawyers. … With more development resources dedicated to DeFi systems than ever before, blockchain is the next frontier for any financial company around the world.
Scattered but powerful
The Internet has changed the way data and information is transmitted around the world, and this development of communication channels has had a profound impact on the banking system. As the world begins to shift to platforms that offer faster registration, faster service, and more reliable products, the central bank’s practices remain a stark contrast.
Smart contract platforms allow people to interact with multiple decentralized applications using a single financial identity. With nearly two billion people on the planet without access to financial services, lowering the barrier to entry is in everyone’s best interest.
In fact, some central banks have even started offering cryptocurrency storage services so that users can safely store their cryptocurrencies with a party that may be responsible for their security. While this may seem contrary to the spirit of decentralization and blockchain, centralized storage services can actually benefit the entire industry.
Brian Kerr, CEO of Kava DeFi, told Cointelegraph: “For me, using Kava in the backend to securely lend and cool APY for users is a natural evolution of banking, finance and fintech services.”
According to Kerr, it is scarier for the average citizen to store cryptocurrency than to deposit cash, since transfers cannot be reversed, making mistakes more expensive. “I think that banks that support digital asset custody are a big step towards making encryption available to ordinary users,” he said.
However, as fintech companies continue to improve their products and services to provide a better end-user experience, the current roadmap hasn’t changed much in decades. In addition, as noted by Anton Bukov, co-founder of the 1-inch Decentralized Currency Pool, once banks start offering massive amounts of stable currency liquidity to DeFi platforms, APY will no longer be used for lending and lending in the future.
Over time, networks have evolved to meet different needs, and with Web 3.0, blockchain is not just about decentralizing power in financial systems; This overrides value. In the near future, these systems are likely to become stronger and eventually become a valuable proposition for all types of businesses.