DeFi and cryptocurrency, how decentralization change the financial world; details

In 2021, the crypto industry witnessed hitting new prices and major institutional buy-ins from mainstream companies. The year has marked rocket high usage of cryptocurrencies and the interest of Indian’s has also increased to a broader range. The crypto ban was lifted by RBI in March 2020 and the surge in customer registration is a point that has to be noted. News and data on cryptocurrency are now almost known to the public but the real facts and figures on DeFi – decentralized Finance are not yet fully known. 

Decentralized finance, or DeFi, is a system by which financial products become available on a public decentralized blockchain network. That makes them open to anyone to use, rather than going through middlemen like banks or brokerages. Unlike a bank or brokerage account, a government-issued ID, Social Security number, or proof of address are not necessary to use DeFi. 

More specifically, DeFi refers to a system by which software written on blockchains makes it possible for buyers, sellers, lenders, and borrowers to interact peer to peer or with a strictly software-based middleman rather than a company or institution facilitating a transaction.

Blockchain companies, however, want to decentralize at least some aspects of existing technologies, like how we manage our data, money, health and legal systems for instance. DeFi enthusiasts expect this ideology to trickle down to finance, which will help them develop virtual marketplaces that could be similar to their traditional counterparts.

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When you want to send money back when most of it goes for paying remittance fees and if your local bank is shut for the weekend or for a public holiday, in the two cases, you opt for a decentralized economy. On the other hand, people won’t trust DeFi products because it doesn’t have any central authority. 

However, for a decentralized economy to better align with the real world, the concept of open finance must be accepted in its entirety. This is why BitOasis and other crypto exchanges are emphasizing its use cases by listing DeFi-relevant tokens. With mass adoption at the doorstep, DeFi tokens, and their offerings will be hard to catch once their full potential is put to real-world use.