yield is non-existent with Japanese Banks these days.
wait a year and I get a few pennies, kind of defeat the whole point of banking.
Problem is, crypto is still too foreign for most end-users in Japan.
I suspect a few more years of education would change how Japanese people perceive risk considering the inflating Japanese yen…
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Benefits of Defi:
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With the use of governance tokens, Defi offers users the power to modify the protocol; an active example of this is the $YFI token of yearn.finance. This is something that is not achievable with the conventional banking system, expressing the notion that a user is powerless to alter the current financial system.
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With complete automation, Defi helps users in earning interest from interest.
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Pseudonymous, flexible, fast.
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Fully transparent, no middle man, permissionless.
Trustless system using verification process
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No middle man can freeze my funds or decide what I can and cannot use my funds for.
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As more people continue to use Defi platforms it gives more value to all participants thanks to the blockchain protocol.
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It is seemless and allows one to control funds easily.
So it is easily assessible,no long queue or waiting time. Transactions are done anytime and anywhere.
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- Banking the unbanked
- Marginalized / unbanked populations having access to funds and making money
- Possible to exchange value even in the face of unstable political situations in a country (see Russia/Ukraine)
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faster, easier to use, instant transfer from party a to b, more versatile, no credit checks
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Another benefit would be to branch out to other sectors. Let me take real estate as an example. It is hard for a new investor to start investing in centralized real estate, due to the high starting price. Maybe 5000 for a parking spot would be a cheap one in some areas. However, a parking spot is not yet the real estate game you probably want to play. With DeFi it will be possible (and already is) to purchase little units of the type of real estate you are actually interested in, even if you cannot afford a whole unit (similar to BTC itself).
A drawback to decentralization here is, that the real estate could still be destroyed, occupied by outside actors or even stolen by a government. And there are other drawbacks for sure.
Also maybe I should rather compare this concept to a REIT (Real Estate Investment Trust), not an actual piece of real estate.
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Yes, its interesting. The banks basically destroy their own value proposition from a marketing point of view, but stay in business, because their government buddies create circumstances to force people into their business.
So inefficient and sad.
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The flexibility of assets that can be provided by any smart contract developer (via tokenization) compared with the slow, geographically restrictive and expensive process of doing something similar via state agencies.
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Lower cost for the user coming from the removal of the middle man
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You have the keys to your money, and no one can block it without your consent, as has happened in some countries.
A very good point, I am with you!
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An additional benefit is that DeFi has low fees compared to centralized banks etc… There is no account fees or limits on funds! You are the bank and no one tells you how to control your money.
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And no one charges you a fee or tells you how much you need to open an account like banks!
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Middleman cut is taken out of the equation
The biggest benefit by far is DeFi and blockchain in general is trustless. Meaning you don’t need a middleman. Why would someone choose to pay fees, when such an option exists!
Yes, agreed, that’s priceless. You can access the market from anywhere and anytime as long as you have an internet connection with just one click!
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One other benefit is that human error is removed thanks to smart contracts (unless it’s not well written).
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