Skip to main content

How Decentralized Finance System is Gaining Momentum against Traditional Finance Model

Decentralized Finance (DiFi) will probably set a different trajectory with regard to the understanding of financial structures. DiFi has the potential of shaping the future of banking operations. According to Forbes, DiFi encompasses the perception of a financial system that works without intermediaries such as banks or insurances.
As the world undergoes digital transformation, the financial sector is also metamorphosing at a dramatic pace. Investors are opting for blockchain planetary to bolster their fortunes. Digital currencies like Bitcoin and Ethereum have been growing at a magical rate. 
Decentralized finance is defined as an experimental form of finance that doesn’t depend on central financial intermediaries like brokerages, banks or exchanges to offer traditional financial instruments. 
The question is, “will decentralized finance replace commercial banks?” Majorly, banks operate on the basis of borrowing and lending for the sustenance of market liquidity and earn more on their unproductive possessions. 
Equally, DiFi protocols have been enhanced to allow users to borrow or loan money on a gigantic scale between anonymous individuals, without involving any intermediaries. The interest is then automatically set basing on the forces of demand and supply. Unlike traditional finance models, DiFi are commonly secured by over-collaterization. 
DiFi platform has started offering advisory on financial transactions, just like investment banks. Firms like Synthetix allow the decentralized development and trading of derivatives on assets like currencies, stocks and commodities. 
Cryptocurrencies have also started embracing digital asset management. For instance, Yearn Finance searches for the best returns in the DeFi space and then automatically does the investment for its users. Yearn Finance permits its users to optimize their returns on crypto assets through trading and lending services. 
Just like the exchange of real cash, DeFi also offering the exchange of cryptocurrencies against fiat cash. The advent of decentralized exchanges (DEX) has necessitated the swapping of tokens without necessarily leaving the crypto site.

Comments

Popular posts from this blog

How Musk's Neuralink Blindsight will allow the blind to see

  Scientists are still stunned by Elon Musk's plan to enable blind people to see, using his Neurolink's Brain Computer Interface chip dubbed Blindsight. Neurolink has already partnered with top Spanish scientists and US Santa Barbara to make a device called Blindsight, a smart Bionic Eye powered by brain implants and AI. Blindsight got the approval of the US Food and Drug Adminstration (FDA), though there have been no human trials. Musk confided that Neurolink will perform its first human implant of Blindsight at the course of 2025. Will Neurolink's Blindsight allow Blind People to see? Blindsight is designed to enable people with total visual impairment, as a result of damaged optic nerve but with intact visual cortex, to see. This is enhanced by bypassing the optic nerve and stimulating the visual cortex to create a visual perception. Visual cortex is part of the brain that receives, integrates and processes visual information relayed from the retina.  Blindsigh...

How Human Brain will replace Smartphones in communication

Elon Musk envisiges a future where smartphones are obsolete and communication happens directly through the brain.  According to Musk, Neuralink the brain-computer interface that his company is developing, could eventually replace phones entirely. Imagine navigating the internet, sending and receiving text messages, or even making calls, all with just your thoughts. This sounds like fictional science. However, Musk believes the integration of humans and artificial intelligence is a necessary mileage for human evolution.  Neuralink’s potential extends far beyond convenience; it could disrupt the field of medicine, communication and the way we interact with technology forever. The future Musk envisions is not just coming, it's already in the pipeline. NEURALINK will make Smartphones completely obsolete. Neuralink is a company that was found by billionaire Elon Musk and develops brain-computer interface technology. Its goal is to connect the human brain to computers so as t...

Why President Ruto risks being impeached

President William Ruto is treading a dangerous political path. His recent allegations over bribery in parliament might hound him out of office. The president has found himself in a political quagmire over his public expose on rampant graft in parliament. Legislators drawn from the National Assembly and the Senate were astounded by the manner in which the Head of State exposed their nakedness in the public gallery, instead of initiating prosecution process with the relevant mandated authorities. Majority of MPs were of the opinion that the president should have prosecuted his case with the relevant bodies established by the Constitution tasked to deal with corruption cases. National Assembly Speaker Moses Wetangula and his Senate counterpart Amazon Kingi have been directed by a section of MPs to summon the president to shed more light over his aspersions or risk being impeached. Homa Bay Senator Moses Kajwang' and his Nairobi colleague Edwin Sifuna were irritated by what they...