The attractiveness of DeFi decentralized finance

DeFi or decentralized financial market is what is gradually getting hot lately. Many people also estimate that DeFi decentralized finance will become the global trend of the future. So, to understand this better and see the attraction of DeFi decentralized finance, let’s enter the following article to find out more.

What is DeFi?

To understand better To understand what DeFi is, let’s get into its concept as follows.

Decentralized Finance or DeFi (short for Decentralized Finance) is a decentralized financial system, managed in a decentralized network and based on Blockchain technology.

DeFi specifically solves the problems of the traditional centralized financial market, thus providing a variety of products to support users in the most optimal way.

DeFi decentralized finance is managed in a decentralized network and is based on Blockchain technology.

Characteristics of DeFi

No complicated procedures are required

When joining, you don’t need permission from a third party, everyone is considered completely equal. And above all without having to go through complicated registration procedures like a centralized financial market.

Transparency

Transparency is a great element of this decentralized financial market. The problems affected by investors will be absolutely limited. Because they are registered and completely open to all DeFi participants.

This feature helped the participants avoid the effects of the sight of the sign. It also revisits an important DeFi advantage.

Preferential cost

Low cost is a strong point for convincing participants, when this is seen as a dilemma in the traditional model. The reason why DeFi decentralized financial market participants will receive low costs is because there is no third party intervention, so all costs are also significantly reduced and reach a very favorable level for users.

The attractiveness of DeFi decentralized finance

The appeal of the DeFi decentralized financial market is immense. It is estimated that in the future it will become a global open financial market. Are these words too pompous for that? So, to see this attraction, in addition to solving the above question, let’s go into the following analysis.

The appeal of the DeFi decentralized financial market is immense

Interest rates are reduced

One factor that led to DeFi’s initial appeal was that participants received lower interest rates than centralized financial markets.

Unlike renting loans from banks, you have to accept huge interest rates. So with decentralized finance, with a peer-to-peer mechanism, you can easily negotiate with your “shoulder object” that the interest rate is significantly reduced.

Furthermore, not having to go through a third party is also a factor that helps the interest rate reach a “nice” number that you can accept.

No documentation required for certification

The second factor cannot fail to mention that the decentralized financial market is not required to have complicated documents for certification when receiving financial loans.

If for bank loans you have a lot of problems with paperwork to certify that you are eligible to make your loans. Knowing this is essential for banks to easily monitor their customers. However, it causes a lot of complications and is time-consuming.

For decentralized finance, you don’t need to do the above. As this is a market that operates on a decentralized basis and Blockchain technology platform, there is no need to spend too much time on the above. And you can easily get a loan you like after the deal.

Don’t worry about the attack on personal investments

Equally important is that DeFi participants don’t have to worry about attacks on personal investments.

All information is recorded by the system and transparent to all participants. This helps protect against personal attacks, as participants can easily identify them.

When to borrow loans will be established by smart contracts. This ensures that the loans go smoothly.

The potential of DeFi decentralized finance in the future

The influx of money here is increasing over time

The DeFi market is receiving more and more inflows. As the price of ETH decreases, the amount of ETH locked into DeFi also increases. This helps the participant to remain extremely profitable and also to benefit from the future sale price.

And the fact shows that the number of coins stuck in loan applications is increasing and the size of DEX or Decentralized Exchange is also increasing over time.

The DeFi market is receiving more and more inflows of money

Expect more asset classes

Real estate services or intellectual property platforms are expected to become a new asset class to be defined in the future, in addition to many existing assets such as securities, insurance, insurance and other services.

DeFi not only wants to receive attention from participants for the trading process but also other useful applications it brings such as loans, system management applications, … that’s why the decentralized finance market still has a lot of expectations in the future and will become a global trend. in the next future.

The potential of DeFi is huge in the current development trend

You can see that the DeFi decentralized financial market has many new and improved features with the limitations that the traditional centralized market brings. Hopefully, this article has shown you an objective view and a sense of the future potential offered by DeFi. I hope this article is really useful to you.