DeFi - Fixing the Current Financial System 💸

DeFi - Fixing the Current Financial System 💸

Photo by Jason Leung on Unsplash

Decentralised Finance as the name suggests is a complete financial system backed by decentralised services that are ‘blockchain’. Think of a financial system that is hackproof, user-owned and simple. It’s possible with DeFi.

But why do we actually need this? 💭

Let’s see the problem that our financial system currently has -

  • Centralized — Our money with the banks or any other institute is not as safe as we think it is. hackers are continuously trying to steal money from these banks and bypass their security. Because there is one single control, we are under their ‘Terms and Conditions.

  • Our Benefits — Banks lend our assets(money) to others and give us a very small cut of their profit.

  • Services — Banks do have a lot of services and they charge a lot for using them. They charge us for Messaging service, Debit/Credit card, Online Transactions, Maintenance and a lot more. Also, opening a new account is a complete mess. Some people don't even get access to banks for their services.

  • Security —As we don’t know how they manage our funds, we don’t know if it’s being misused. Bank Accounts can get hacked over the network and your fund can be withdrawn by an unauthorised user.

Photo by Georg Bommeli on Unsplash

So, DeFi can solve this? 🔑

It is completely possible to fix all these issues with Decentralized Finance. First of all, it’s decentralized, which means that no one can stop you from accessing your funds and you will have control.

  • It is easier to set up your wallet and get into the world of DeFi. You just need a wallet and an internet connection. You will have complete control over your funds which means that you can lend them, borrow from others or stake them without any intermediate.

  • It’s peer-to-peer, so you can decide what and how to lend your money. You can get better deals using this.

  • You will be charged only for the transactions you do and that too will cost very less as compared to banks.

  • It’s completely secure to do transactions on platforms like PancakeSwap, 1inch, Uniswap, and Curve. Just make sure to verify them on the internet, it can be done easily.

  • On a blockchain, you own the wallet. This means that you are not restricted to using other services, you can try as many DeFi products using your single wallet.

Learn more about DeFi using these official docs from Ethereum here

NOTE : On a blockchain, your wallet is everything and you can use your wallet to access these DeFI Dapps. Don’t sign in to any Dapp without reading its permission. Keep your wallet safe. 🔒