The Rise of Decentralized Finance Systems
The first cryptocurrency created is a peer-to-peer electronic cash system that is not controlled by a central entity. It is believed that only 8% of the world’s money exists in physical form. The rest exists in digital form. Blockchain solutions seem to see massive growth due to a lack of regulatory clarification and a level playing ground for the industry.
Decentralized Finance(DeFi) is an ecosystem of financial applications developed using blockchain technology. Defi aims to provide a transparent, opensource, permissionless, and decentralized financial environment. DeFi solutions bypass restrictions in investment and easy investment approaches that may have issues related to governmental restrictions, but this is getting out of hand as the sector keeps growing. With blockchain and decentralization, everyone is able to participate in financial systems.
In the past few months, DeFi has seen unprecedented growth. This has led to a shift in preferences in the cryptocurrency industry. There have also been heated arguments on how DeFi will end in the near future. Some argue it is a mere bubble and others insist we are just in the early times and more yet to come.
THE DEFI SYSTEM
DeFi systems work with the help of these three components
1. Blockchain Technology
2. Decentralized Apps
3. Smart Contracts
WHY IS DEFI GAINING MORE ATTENTION
In the early months of 2020, the word DeFi wasn’t given much attention, but by December, you could only hear about DeFi in the crypto industry. The total value lock by December was well over $12 billion compared to a value of less than a billion-dollar in the early months of 2020.
We can see that the number of people who have an interest in DeFi keeps growing. This may be due to factors not limited to:
1. Low restrictions. Unlike those in the banking system and big financial institutions that require strict customer verification, high minimum investment, DeFi has a direct opposite to this. All users need is to hold a crypto asset. People can start investing in programs such as lending, staking, yield farming, and others and earn from participating. Users do not have to do through a know-your-customer verification to participate in the programs.
2. No third party. With centralized systems, commissions are paid to middlemen who facilitate the business. The fees are increased to make up for this. Others also add up to the fees to cater for maintenance and others. The rise of DeFi has seen fees on these platforms reduced as there is no third person to pay commissions to. The fees charged are minimal compared to centralized systems.
3. In addition to the above, DeFi protocols cannot be manipulated once the contract is deployed. We all love a fair world, and for this matter, many DeFi is the best place to invest as it is free from external or internal manipulations.
4. Transparent. All transactions are broadcast on the blockchain network for public consumption. Everyone can view a transaction’s details from the blockchain explorer giving it a high level of transparency.
5. Self-custody. Users are able to possess their assets by having access and control over their keys. They determine how much of their funds to use for investment, and the remaining will be left untouched even if still connected to the platform.
THE FUTURE OF DEFI
With the recent growth in DeFi and many entrepreneurs experimenting and bringing innovation such as Injective and Reef to DeFi, there is no doubt that DeFi is here to stay.
DeFi gives a lot of advantages over centralize systems, giving it an upper hand in the cryptocurrency industry.
DeFi will be the driving factor to get crypto to the mainstream, although the word crypto is now getting known even without DeFi.
MRWEB FINANCE
MrWeb Finance is a simplified and trusted Decentralized Financial system for people looking to earn from the crypto space.
WHY MRWEB FINANCE
DeFi is not risk-free; while it can yield great returns on your investment, there may be smart contract bugs, liquidation risk, admin key or governance compromise, rug pull, and many others. You can lose a lot of money if you don’t do the right thing.
The aim of Mrweb Finance is to make DeFi easy for everyone while reducing the possibility of risks involved. We are bringing programs that are focused on giving the best yields to our community.
The possibility of a rug pull is highly reduced.
We have a lock schedule for over 70% of our tokens. When the locked tokens are released into circulation, we will determine whether to lock them for another period or use it for one of our investment programs. This is done to reduce the tension in the community over rug pulls. All our token lock events will be publicly shown on the blockchain for community verification.
More about Mrweb finance can be found on our site: mrweb.finance.
Website: https://mrweb.finance
Twitter: https://twitter.com/MrwebFinance
Telegram ANN: https://t.me/Mrwebfinance_official
Medium Blog: https://mrwebfi.medium.com/
Whitepaper: https://mrweb.finance/WhitePaper.pdf
