Blockchain & DeFi
Decentralized finance, or DeFi for short, is a rapidly emerging sector that promises to disrupt the traditional financial industry with blockchain-based tools and services that mimic banking, investing, and trading services. Since its staggering growth in 2020, we started to witness many DeFi alternatives to traditional financial services. Open lending platforms, decentralized exchanges, and digital asset staking are among the most common use-cases, but new tools and platforms are emerging regularly.
Decentralized finance leverages key principles of the Blockchain essence to increase financial security and transparency, unlock liquidity and growth opportunities, and support an integrated and standardized economic system. With basal benefits like Immutability, Interoperability, Transparency, Permissionless, and Self-Custody, you can manage your own digital asset finances without relying on centralized financial institutions.
DeFi Use cases
|Stablecoins – Stablecoins, a form of digital asset, maintain a value pegged to another asset such as fiat money or exchange-traded commodities. The primary objective is to mitigate volatility in the cryptocurrency market.
|Open Lending Platforms – Decentralized lending platforms, often implemented through decentralized applications (dApps), enable users to lend or borrow digital assets, earning interest on deposits or paying interest on borrowed amounts. This occurs without the need for traditional financial intermediaries.
|Decentralized Exchanges (DEXs) – DEXs are digital asset trading platforms that operate without a centralized authority. Using mathematical algorithms and liquidity pools, DEXs establish token prices, offering users a decentralized and efficient trading experience.
|Decentralized Insurance – DeFi solutions extend to insurance, providing decentralized alternatives to hedge against rare or catastrophic events such as market crashes, hacks, or smart contract failures. These platforms offer transparent and automated insurance solutions.
|Synthetic Assets Issuance – DeFi facilitates the creation of synthetic assets—digital tokens representing the properties of real-world assets like precious metals, traditional financial instruments, or other digital assets. This innovation expands the scope of accessible assets in the decentralized ecosystem.
|Yield Farming (Liquidity Mining) – Yield farming, also known as liquidity mining, involves users locking up digital assets to provide liquidity in decentralized finance protocols. In return, users receive rewards typically distributed through smart contracts. This practice enhances liquidity availability and incentivizes user participation.