Defi or Defi or distributed financing is a rapid growth in the world of Cryptocurrency that replaces existing financial services with distributed technology. DEFI handles financial transactions in a transparent and safe manner using blockchain technology instead of relying on banks or other intermediaries. This ensures more comprehensive, accessible and efficient business ways.
Why is Defi different?
The most important feature of Defi is that it runs on a distributed network such as Etherrium instead of the central agency. In traditional finances, banks, insurance companies and other financial institutions are brokers who promote transactions. Defi removes these brokers and replaces it with a smart contract (smart contract). This agreement is an automatic code that is automatically performed when a specific condition is met, so it minimizes the need for human intervention.
Basic principles of Defi
Defi offers a wide range of financial services, including borrowings, borrowings, trading assets, savings, and insurance. This allows users to get interest on digital assets, get loans without intermediaries, and participate in trading without relying on traditional scholarships. All transactions are stored in the block chain and cannot be open and unchanged.
Smart contracts play an important role in Defi because they automatically perform the conditions of each transaction. For example, if a person receives a loan, the smart contract can automatically comply with the loan conditions such as interest and duration without a bank without checking it manually.
Risk and challenge
Defi offers significant advantages, but there are also risks related to the use of these systems. The Defi platform is often open source and not regulated, so it can be vulnerable to bugs, hacking or other security issues. In particular, there are also concerns about transaction speed and costs during the networking period.
Also, the law on Defi is still unclear. Designation of these platforms makes it difficult for the government and regulators to protect and protect them from fraud. This is the result of both participants and extensive financial systems.
The relationship between Defi and other industries
Defi affects not only the financial world but also other sectors. For example, the injury of Defi has developed a variety of platforms and applications that may be associated with online gambling sites. This platform can use similar blockchain technology to ensure safe and transparent transactions, contributing to the growth of the digital gambling industry.
conclusion
Distributed financing provides a revolution by providing financial services. Defi uses blockchain technology and smart contract to make financial transactions without a broker. There are many advantages, but you should not underestimate risk and legal uncertainty. But Defi remains interesting and promising in the financial technology world.