A growing crypto industry that hasn’t received many sensational headlines but has the potential to completely change the game in blockchain space – decentralized finance. 0 Comments It’s no surprise that blockchain industries have been hitting their stride in recent years. Ever since the inception of Bitcoin in 2008, new developments and innovations in the world of crypto are steadily changing blockchain platforms from niche tech services into a worldwide industry with hundreds of millions of users.
While crypto is growing, there are still many people who avoid blockchain-based ecommerce due to major technology barriers, and the tech knowledge gap continues to stand in the way of mainstream adoption.
Plenty of flashy headlines do catch the public’s attention – like the digital artwork that sold for $69 million as an NFT, or the famous ‘Disaster Girl’ meme image which sold for $500,000 – but there aren’t many uses of crypto that appeal to tech outsiders.
There is, however, a growing crypto industry that hasn’t received many sensational headlines but has the potential to completely change the game in blockchain space – decentralized finance. What is DeFi?
Decentralized finance (DeFi) is just what it sounds like – finance that is decentralized. The many products and services provided by traditional financial institutions, like transferring money, lending, borrowing, and investing, are centralized within the institution itself.
Even with government oversight and regulation, this system has not been able to eliminate the misuse and mismanagement of funds, fraud, and embezzlement. DeFi decentralizes these services, making them far less vulnerable to these kinds of corruption.
DeFi systems run off of peer-to-peer networks rather than centralized systems, making them nearly impossible for a controlling authority to intercede with transactions in these systems. Furthermore, they can’t be affected by world events as profoundly.
For example, the COVID-19 pandemic made getting a loan or borrowing money from central banks or brokerages far more difficult, but this would not be a problem using DeFi services.
Since fiat currency runs the worlds’ economies, centralized financial institutions have become entrenched on the global landscape. However, DeFi has broad appeal because of the innovative and financially advantageous crypto applications being developed.
There are a wealth of ways crypto can be used these days other than as a simple asset you can acquire. Services like PayPal now allow users to pay select purchases by converting their crypto holdings to fiat currency, and new NFT collectible games like NBA Top Shot and Dark Country are drawing the attention of typically uninterested parties like sports fans.
While these emerging uses draw huge crowds of newcomers to crypto industries, DeFi services can help them manage and grow their electronic funds.
Many crypto-novices wonder, how exactly does a person start using DeFi? Let’s look at Nimbus , one of the leading DeFi services, to offer a better understanding of how DeFi really works. DeFi Demystified
DeFi employs decentralized applications (dApps) that come in many forms. They run on software code called smart contracts that operate on blockchain infrastructures like Ethereum and Binance Smart Chain.
Essentially, smart contracts are authenticated and recorded on public ledgers, and this system of blockchains and smart contracts is what makes dApps decentralized. Consider a dApp that allows a person to lend cryptocurrency they own to borrowers in order to earn APY or annual percentage yield.
The lender and the borrower are immediately and autonomously connected by a smart contract on a cryptocurrency blockchain to accomplish their transaction.
A host of these dApps exist in addition to those that let people lend and borrow money: dApps that let people exchange cryptocurrencies for other cryptocurrencies, dApps that protect assets, dApps for arbitrage, dApps for IPOs, and many more.
The Nimbus platform assembles a suite of dApps to allow users an easy way to manage their crypto holdings and ventures. Combining multiple different DeFi dApps creates a single central hub for DeFi services, far more appealing to newcomers unfamiliar with crypto than relying on different services with different exchanges.
By providing access to these dApps, Nimbus offers users sixteen possible revenue streams to grow their crypto holdings. So far, Nimbus hasn’t introduced KYC (Know Your Customer) systems, which simplifies access for newcomers because they don’t need to provide any personal or financial information.
Understanding the hesitancy of newcomers, the creators of Nimbus also made significant effort to make the platform intuitive to use and applicable to newcomers’ financial goals. “I believe that this stage of market development completely needs to be concentrated on the involvement of new people,” said one of the minds behind the Nimbus […]
source Far from a scam, DeFi could change our financial systems forever, with the help of Nimbus