Closely related to DeFi’s interoperability and composability is that innovations in financial products and services are not restricted to a few big players with huge capital. Innovative developers and entrepreneurs can invent their own protocols or build new products, from DEXs with enhanced interface to entirely new tokens, and compete in the decentralized space.
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Agreed. The possibility of taking out a loan without first establishing a credit score can help many people to get access to much needed financing. On the other hand, the trustless nature of DeFi also protect lenders from frauds or defaults.
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Privacy and transparency all rolled together
Excellent point, loan without a greedy bank and no marks on your credit
I would say, SPEED is one of the benefits, as funds can be transferred very quick in a minutes, without needing of another approval.
very good, I like this benefit, very well said!
defi is protected by maths and not humans, which makes it way more trustworthy.
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Fast money transfers with high transparency and minimal fees. We are still far away from this (gas) ;-(
Possibilities to increase one’s capital even with small monthly savings
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Yes, we can let the creative juices flow and build whatever we want. And at a much faster pace than the old banks. I have worked as a developer for multiple big banks in the past and by the time they are finished with a project, the tech they used is already outdated.
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I think one very interesting benefit of DeFi is democracy. Many DeFi platforms have governance tokens that anyone can buy and the holders of those tokens can vote on what features and changes the devs should implement. Governance tokens can be a good investment as well, as the value will increase if the platform is successful.
Traditional banks are mostly dictatorships in my opinion.
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I think a great advantage is that it is available anywhere. I’ve read a lot about crypto functionality in Africa- for example, Cardano has a mission to bank the unbanked. People don’t have to wait for a brick and mortar bank to be built. If they have a phone, they have a bank and access to services. This will transform society
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Great post Maddie. I think back to the banking crisis of '08 and ‘too big to fail.’ Maybe DeFi will save us from that happening
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You own and have full control over your funds which are outside of the current system which is looking quite vulnerable these days.
Another benefit would be that there is a huge range of ways to make money ie: Staking, Yield Farming, Metaverse Play to earn, Gaming NFTs, NFT art and much more.
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Another great benefit of DEFI is the governance, owner’s of the protocols token can vote on future changes and improvements to the protocol.
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You can use arbitrage opportunities from one DEX to another and take out flashloans from the liquidity pool and make a nice profit if you pay off the initial loan but this really all depends on how the chainlink price oracles from one exchange and another and how all these contracts interact with one another although it is rare it is still possible
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Everyone is threated the same based on know rules coded in the protocol (these rules being fair or not is a different point)
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You covered it so well it’s hard to think of anything new to add that wouldn’t fit in those three titles.
One that does come to mind is how you can cover your investment with the insurance protocol in Defi. I definitely love the idea so many others have listed about taking the profits from the bankers and giving to the community.
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I definitely have stepped out of my comfort zone with this new knowledge but so far I am loving the whole new world it is opening up to me. I am taking this education one day at a time and can’t wait to see where the journey will take me in the months to come. This new freedom does feel liberating. Thanks
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