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Decentralized finance (DeFi) is one of the best gifts of blockchain technology, and it is here to stay. And, for a variety of reasons, this financial breakthrough will undoubtedly alter the way global financial services operate, as well as how people transact on a regular basis.
If you are wondering, DeFi is not fundamentally different from traditional finance (TradFi), as many are made to believe. While the biggest difference between the two is inherent in their fundamental technologies, both offer the same services.
For context, DeFi is traditional finance built on blockchain technology. This, therefore, implies that, by employing blockchain technology at its core, DeFi is able to eliminate any form of centralization (or related system) as in the case of TradFi.
In addition, by adopting blockchain at its core, DeFi applications (dApps) are automated and are able to run independently with the help of smart contracts, which technically replace the centralized system found among TradFi services or applications.
That said, you will typically come across the same financial services within the TradFi ecosystem in the DeFi ecosystem. This also means that the concept behind most dApps services is practically the same as those in the TradFi system.
Understanding DeFi Lending and Borrowing
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Continue reading Top 10 DeFi Lending Platforms to Watch in 2022 on DailyCoin
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