From the point of view of someone having an early investment, by discovering DeFi I found a way to never again to sell my BTCs and ETHs in order to benefit from them. With MKR I can mint new DAI, or with AAVE I can borrow USDC at a low rate of interest (very much lower than the bank in my country). Either stablecoins can transform into FiAT and enjoy the spending or investing into new ventures.
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So many great answers in this thread. I am just going to add one more benefit: you are in control of your own money and nobody, no government, no institution can bar or restrict what you want to do with your money in Defi. Of course, we have to be responsible and accountable for handling our own money here. There is no going back once a transaction is done as a smart contract is automatic and immutable. It is a good idea to start small and be pretty good at Defi protocol before investing a larger amount.
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Transaction speed when sending money across the globe
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Yes! Participating in the network is permissionless
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Through DeFi, you are presented with the option of engaging in peer2peer lending. Again, you wonât have to get approval from any intermediary and you are free to do business with whom ever you choose. This does not mean that transactions are going to be interest free, or devoid of fees it just means that your selection pool will be borderless allowing you transact with individuals from other countries should they meet your lending criteria. A win for both parties involved.
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leapfrog the bankless through DefI: provide an opportunity for bankless people by using a simple phone or device connected to a computer
decrease expenses on remittances; the world still has lot of forced migration where those people send money to their families in their homeland.
Accesibility to financial instrument only allowed to wealthy and big insittutions: derivative assets are huge part of the traditional TVL https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2020/ where TVL in 2020 was +$500T if Defi through ETH gets only 0.5% it would result in a 2.5T TVL from a $70B currently
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Trustless & Transparency : We donât have to trust the institution, bank, company we invest our money in. The way it will work is all in the smart contract that is open-source.
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Yes flashloan is clearly another advantage of DeFi that doesnât exist in CeFi. Simply because in DeFi code is law and therefore you can easily prove that your strategy (=the bit of code showing how you intend to use the flashloan) works or not => unlock a flashloan.
In CeFi itâs just impossible to do such predictions as the process isnât programmed.
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you get to participate in an experiment that may one day lead to a viable alternative to the corrupt, bureaucratic, rent seeking, legacy gatekeepers of the current finacial system
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Benefits:
-no need to interact with a bank (thank goodness, these institutions have sucked enough of my time)
-significantly lower transaction fees
-allows user to select their own level or risk and terms (either within the same dex or by choosing a different dex), rather than being dictated toâŚ
-outpace inflation (I have yet to find a bank product that does this)
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Make fund raising easier. Win-win for everyone involved.
Getting funds in shorter time, no wasting of time waiting for approval
Greater return - something you will not get from the greedy bankers
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Trustless and can let people earn through a lot of means
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The main benefits of defi are that these protocols donât discriminate based on your geographic location or anything else. Thus, anyone can have access to financial services. As long as they have the funds to post collateral or liquidity, then there is no reason to discriminate.
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- Accessible 24/7
- Traceable
- Connect people around the world and unify cultures
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one more benefit is fees, i had a traditional bank charge me 6000 in fees and would not work with me or close account it would take every penny of my paycheck and give me the middle finger. defi does not have this problem
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I was on hold with my bank for 45 minutes last week, gaining access to a locked account.
I had to sacrifice my own time to gain access to my own money because if an authority error.
Efficiency and Transparency in De-Fi is a huge one. A downside is potentially the lost Jobs for many people in the current financial sector.
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Literally just having access to your own money 24/7 is priceless
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+) Access around the clock
+) No fees to use
+) No need to make time for visits to a bank building to lend, open accounts etc.
+) All can be done without needing a middle man
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Hi Josh,
On top of the benefits you mentioned in your video, namely
- tech
- accessibility (in time and space)
- permission-less
- immutability
- permanence
- transparency
- composability
- fast and cheap (in the future)
- financial
- yield
- token appreciation
- user experience
- no more exchange rates
Iâll add those two:
- Open protocols with no barrier of entry allows tapping into a larger talent pool: individuals with a knack for sophisticated finance -who might have otherwise remained obscure, have an opportunity to contribute their creativity.
- This makes the world of finance, money and value transfer in general more relatable to the larger population. It gives everyone an incentive to be financially literate. It could therefore reduce polarisation and lack of understanding between a financial elite and the rest of the population. Sounds abstract but -who knows, maybe DeFi will help avoid future social conflicts or civil wars.
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Agree. The existing banking system can be so frustrating. Existing mechanisms for KYC, fraud prevention and AML prevention in the end do not really help prevent what they are supposed to prevent. They just end up creating friction, hurt user experience, hurt users emotionally with constant suspicion, and threaten userâs physical security because of leaked KYC info.
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