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Introduction to Radix - The New Home For DeFi And Possible DeFi Applications On Radix

By Iforbusiness | Cryptos and blockchain Blogs | 7 Aug 2020

In the world, a big percentage of people are still living in the era of CeFi (Centralized finance) because they are unaware of DeFi (Decentralized finance) and even if they know about DeFi but they quite confuse to use which platform to adopt for DeFi so in this article we will discuss the importance of DeFi, some strong points of DeFi that makes it more powerful than CeFi, and what makes Radix DLT to a most suitable platform for DeFi.

Before starting this article, we should briefly discuss what is CeFi and DeFi.

CeFi: Centralized finance is the financial system where you need to trust people that means CeFi totally controlled by big organizations, managers, and head of the department of that financial system, so the users haven't power to control the system.

DeFi: Decentralized finance is fully opposite to the centralized system where you need to trust technology and its community, which means the system is not in the hand of a single organization, managers, or head of the department. DeFi fully controlled and governed by the users of it who have all the powers and security and safety of the system depends on the technology.

Advantages of DeFi over CeFi:

The decentralized financial system created on the top of the blockchain, so it eliminates a single point of failure and all data get recorded over the blockchain, DeFi is independent of location, institutions, and middleman where everything run on a trustworthy automation process, as DeFi eliminates the middleman so it reduces huge fees and charges.

Where CeFi is full of middleman and controlled by the institution and provides location-based services and in CeFi there are lots of intermediaries between the user and service providers, so users have to pay huge fees and charges. So I hope you understand the overview of Defi and let's come to our major topic, where I will tell you what makes Radix DLT to the most suitable platform for DeFi.

What is Radix?

Radix is a decentralized finance protocol created to solve some major problems of a centralized financial system like lack of access, poor liquidity, and high costs, etc. Radix provides the best first layer 1 protocol specifically built to serve DeFi so you can able to build next-generation financial apps and service for your users.

Possible DeFi Applications On Radix

As Radix solving solve some major problems of a centralized financial system like lack of access, poor liquidity, and high costs, so there are so many possible DeFi application we can get on Radix platform like below.

Creation of Borrowing & Lending application and service on Radix:

You can able to create your open borrowing & lending application on the Radix platform, which gives you many advantages over the traditional system, like easy and instant settlement, collateralize digital assets, no credit checks, borderless service, secure cryptographic verification method, reduce counterparty risk, lending and borrowing cheaper and faster {Reference}.

Monetary banking services on Radix protocol:

Radix can be the best solution for the Monetary banking services like issuance of coins, mortgages, and insurance. Radix provides you all support and tools to create your own token, coins or assets where you can able to issue your own coin according to your need, and radix also support smart contract so this can be helpful to provide mortgages and insurance services on the Radix protocol {Reference}.

Decentralized Marketplaces:

This is a challenging task for all existing DeFi platforms because a decentralized platform not only includes decentralized crypto but also includes many security tokens and a wide range of conventional financial instruments. Here Radix provides the first layer 1 solution to the decentralized exchange, which provides less maintenance and transaction fees for your decentralized marketplace with limitless scalability {Reference}.