De-fi, known as Decentralized Finance or Open Finance is one of the newer and pathbreaking concepts in the Blockchain ecosystem. Using Decentralized Finance applications, the entire financial ecosystem can be decentralized and made non-custodial. All the tenets of the financial ecosystem like borrowing, lending, trading, exchanging, risk management, and investment are included under the concept of De-fi. Compared to the legacy closed financial structure, this open finance is truly a huge move and brings financial assets closer to underbanked or unbanked populations.
Minddeft is one of the industry leaders when it comes to Blockchain and Blockchain-related applications, including open finance. We’ve developed applications for companies far and wide, and we can help you build decentralized applications for all the services under open finance.
Minddeft’s team of experts helps you tap into the billion-dollar market. Our development services are designed to cater to your needs, and our team of experts is available for support throughout the journey. From the first inception of the idea to the final delivery, Minddeft works in tandem with you to give you the guidance you need. So that you accomplish your company goals while driving fantastic business results!
At Minddeft, we understand the intricacies of Decentralized Finance and have the experience required to assist you through the application development process.
Minddeft, a global Blockchain company has been building innovative Blockchain based solutions for more than 4 years. We have a strong team of Blockchain Architects, Engineers, UX/UI experts, and Security Analysts that helps you build the next big thing in Web 3.0. We are experienced with Ethereum, EOS, and other protocols powering the DeFi ecosystem.
Our DeFi apps are managed by rules written in the Smart Contracts. All the financial instruments, digital assets, and more, are created using Smart Contracts and all the transactions are done in a P2P network without needing intermediaries. Smart Contracts manage the transaction trail leading to high transparency and auditability.
In a De-Fi architecture, the users have a complete control over their private keys. That way, they can manage their assets independently, from anywhere. Users can directly interact with the decentralized network using their crypto wallets without any bias or lengthy process.
Based on Blockchain, the transactions that happen in De-Fi are tamper-proof and are stored immutably on the network. Any user can validate and verify the transactions leading to enhanced security and auditability.
All the different DeFi products and applications are able to communicate with each other using interoperable standards. For instance, Lego, the building blocks and DeFi applications can be combined to form new applications and products, like asset management platforms combining the asset tokenization, asset issuance and decentralized exchange.
Minddeft has a strong team of Blockchain Architects, Engineers, UX/UI experts, and Security Analysts that helps you build the next big thing in Web 3.0. We are experienced with Ethereum, EOS and other protocols powering the DeFi ecosystem.
Decentralized Finance, or De-Fi, is in essence a new monetary system based on public blockchain networks.
You may be aware of Bitcoin and Ethereum and other cryptocurrencies. They are vast, open-source networks that allow you to create applications. These applications foster financial activities without requiring an intermediary centralized institution.
The motivation behind this change in the financial system is the number of people who currently lack access to even the most basic financial services. Although with the existing financial infrastructure we’ve managed to create wealth, a very little of that wealth has gone to the hands of the majorly excluded people.
Decentralization ensures that there isn’t a single point of failure -- by keeping the records across different systems through a P2P network. It is permissionless, so it is open to anyone, irrespective of their location or status. And, whereas a legacy payment processing company (banks, etc.) can close the account of an unsavory customer, blockchains are censorship resistant.
At the beating heart of the drive toward DeFi are decentralized applications, also called DApps. These plug-and-play tools make it easy for anyone with a smartphone to access financial services at lower costs.
Let’s take the example of the remittances market, in which foreign workers send billions of dollars across borders back home every year. The fees for doing this are often extortionate — eating into their modest income.
DeFi services have the potential to reduce these costs by not less than 50%. This incentivizes employees to earn more and be more productive, while supporting small businesses and economies on the other side of the world.
Another example is loans, that can be easily addressed using De-Fi. Right now, unbanked can find it next to impossible to borrow money, because they lack a financial history and other required documents. De-Fi platforms connect borrowers and lenders directly, eliminate credit checks, and enable digital assets to be collateralized.
Other examples of De-Fe include stablecoins -- a type of digital currency that shields consumers against the volatility of crypto by being pegged to another asset such as dollars or gold. Tokenization means real-world assets such as art, property and commodities can be owned and traded on blockchain, while decentralized exchanges mean users hold on to their funds at all times — reducing the risk of cyberattacks, a scourge that many centralized platforms have been struggling to shake off.
Today, tech is way more affordable and accessible, implying a higher percentage of the population has access to the tools and services required to benefit from De-Fi. Indeed, recent research from the World Bank suggests that two-thirds of unbanked citizens now own a mobile device — the selfsame technology they need to begin exploring DeFi platforms.
Public blockchains are also beginning to become more sophisticated, and inventive DApps are being unveiled all the time. Many of them have been built on the Ethereum blockchain.
There are some challenges that lie ahead for DeFi’s proliferation.
Even though it could transform the lives of millions of people, it’s an inescapable fact that DeFi solutions have failed to gain public awareness. Adoption in the crypto world has been modest to say the least — and according to a study published by the Cambridge Centre for Alternative Finance back in December 2018, there are just 25 million verified crypto users worldwide. When compared with the 1.7 billion unbanked people we were talking about before, it’s clear there’s a lot of work to be done.
Hopefully, as more and more people realize the importance of such a decentralized financial system, we’ll see many more improvements on this front!
The first and foremost challenge strangling De-Fi is regulatory hurdles. Tackling them is crucial.
Establishing contacts between DeFi platforms, unlocking new partnerships, and engaging in conversations with decision-makers who can help this technology reach the masses, is nothing short of vital if crypto and blockchain are going to become a compelling alternative to the status quo. Major players in the traditional financial world regularly meet to discuss economic affairs — just look at the World Economic Forum in Davos — and the bright minds aggressively pushing DeFi forward need an outlet to do the same.