May 17, 2021
As DeFi projects pick up steam, and Mark Cuban names DeFi as an industry with the potential to explode, the monthly volume of decentralized exchanges has soared from just $39.5 million in January 2019 up to $41 billion in March 2021. And this fact sounds impressive.
Today we will pay close attention to the growing trend – DeFi and identify the most promising areas of its development. Let’s dive into it.
We all can admit that the implementation of new technologies in financial services is not new. Most transfers are processed thanks to them. However, third-party interference is still needed to navigate the legalese of jurisdictions, competing for financial markets, and different standards to make transactions possible.
DeFi puts technology at the front in companies. It can be placed in blockchain and cryptocurrency spheres. But its abilities are much wider.
Decentralized finance uses tech to eliminate centralized systems and provide financial services for anyone worldwide. DeFi services and apps are commonly based on public blockchains. They also duplicate existing offerings built on the rails of common technology standards or they give new solutions custom-designed for the DeFi system.
In addition, DeFi apps give consumers the ability to manage their funds through personal wallets and trading platforms that work with individuals instead of institutions.
DeFi projects are integrated within 12 different areas nowadays:
Here are the major pros that these applications can provide. Take a look at them:
But are all of these services and platforms risk-free? Undoubtedly, the answer is “No”. Just like an apple that may contain a worm, DeFi products have their own problems and risks.
Despite all the advantages of this tech, alas, there are currently no popular or successful global projects on DeFi in the financial sector. It is so due to financial authorities and firms. They are not ready for integrating new technologies, and they see DeFi as a threat, not an opportunity.
But the best is yet to come, and its future looks quite prosperous. As the world hurdles further towards a digital and decentralized future, we are already seeing tokenized currencies including digital gold, Non-Fungible Tokens (NFTs), and artworks become more common while many governments around the world are seeking to establish central bank digital currencies (CBDC).
The use cases for smart contracts are exponential, spanning from DeFi to gaming, tokenized real-world assets, prediction markets, payments, gambling, and betting apps.
As the manner in which both individuals and organizations interact, share information, and utilize financial tools continues to be revolutionized by decentralized technology, smart contracts, and DeFi will continue to create and supply its users with transparency and financial freedom.
That’s all for now. Stay tuned for more great content coming soon!
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