Decentralized Finance, or DeFi, is an ecosystem of applications designed on blockchain networks in the banking and finance sector. It is also referred to as open finance since it functions in contrast to the traditional concept of centralized finance and does not involve intermediaries. Today, decentralized finance has become an extremely active sector in the blockchain space.
Decentralized Finance Use Cases
DeFi has gained popularity in recent times as it has contributed immensely towards democratizing finance. The centralized finance models allow institutions, banks, and governments to restrict individuals or organizations from accessing their assets. Blockchain technology offers increased access by eradicating traditional financial barriers. The applications are made more accessible as well as more inclusive.
DeFi use cases include the following:
DeFi Asset Management
Also known as ‘asset custodians’, DeFi asset management tools primarily include wallet applications. They are not directly involved in any commercial or banking services. Instead, they provide tools to assist cryptocurrency holders to manage their assets.
DeFi Asset Management also plays an important role in helping new customers familiarize themselves with the world of cryptocurrency like setting up wallets, etc. In essence, they help eliminate complexity in accessing the crypto industry.
