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Hello friends, good to have you back here. I trust you're keeping well. Welcome back. So today we would be looking at another interesting topic. Defi is what we would be discussing, we would also be exploring it benefit.
As usual, I would be simplifying it to the best of my ability...in such a way that even a slow learner would be able to grasp something from this post. Let get into it guys!
|**Introduction**|
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The financial realm is one that is fast evolving and the good thing about this realm is that blockchain is gradually being incorporated into this realm and it's funny how that it fixing most of the major challange we have in this realm. One of the medium of fixing these challenges is Defi.
Since the inception of the Defi, users have found it very useful and highly beneficial when compared to the traditional financial system. Hence it continuous growth and improvement over the few years it has spent so far.
|**What is DeFi**|
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Defi mean **Decentralized Finance**. So what we are talking about here is all about a decentralized financial system which enable individual carry out seemless financial transaction without the interference of unwanted intermediaries that have always been one of the challenges faced by users.
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One fascinating thing about Defi is that it is open and accessible to all such that with your internet connection and mobile device or PC you can enjoy Defi service to the fullest using a peer-to-peer model.
DeFi system leverages on existing blockchain related technologies like smart contracts, digital wallets and assets and auxiliary services like Oracle to create a solid foundation for an efficient and more beneficial financial operations.
The goal of course is to sideline the various intermidiaries we have in the financial realm such as banks, regulators, government, brokers, traditional exchanges and other forms of middlemen.
Services offer by DeFi are not very different from those offered by the traditional financial system...they include payments, loans, insurance, investments, assets managements and so on. Over the years, there have been several improvement as touching the services rendered by these DeFi platforms...
|**Smart Contract in DeFi**|
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We can't really explore defi to it fullest if we fail to talk about smart contact and it impact in the defi system. Smart contract is one of the major component of Defi which make Defi less flawless. I won't say the Defi system is perfect, nah!
It still has so many flaws and that's because it still being developed as it yet in it infancy stage. So it still very vulnerable to attacks and the likes. Nevertheless, a lot of successes have been recorded so far with Defi.
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Smart contract helps validate transaction in a trustless manner, you do not even need to know or meet the individual you want to transact with before a successfull transaction can be carried out. Neither do you need an intermediary to facilitate these transactions.
What smart contract does is to ensure that the conditions for transacting with another person are met. Once there is a breach somewhere, the transaction will not be executed. Smart contracts are actually self automated/executing model that are specially designed to execute a contract when all conditions have been met.
For example, having gained this knowledge about Defi, if I need a loan, I do not need to approach my bank that would surely want to subject me to all many of scrutiny and checks, signing all manner of document, coupled with the waiting time for approval...
With Defi, you won't need to go through all of those rigours, once you locate a very good defi platform, and have gone through their conditions which of course is not as rigid as that of the bank...you would only need in most cases a crypto asset which would serve as your collateral for obtaining a loan.
This wouldn't take so much time to acheive. This is the reason why people are finding Defi really interesting and efficient. We would still see more improvement in the defi space in years to come. Our fingers are crossed.
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|**Conclusion**|
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There you go friends.I would love to wrap it up at this juncture. I want to believe you've gotten so much from this piece. As my usual custom is, I would always encourage that you DYOR to be sure of every financial step you would want to take as I won't be liable for any form of loss encountered by you.
Feel free to share with me your thoughts in the comment section. Thanks for your time once again. Gracias!
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**Disclaimer: This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your own research and consult a financial advisor.**
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Regards
@lhorgic♥️
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