Know why Crypto World is talking about DeFi

1. Know why Crypto World is talking about DeFi Since the adoption of crypto technology in our day-to-day life, several platforms have been working round the clock to help the advancement of the technology. However, the most significant trend that changed the crypto world was the introduction of DeFi technology. DeFi or decentralized finance refers to an open finance system that relies on blockchain technology to improve and decentralize traditional financial services such as

2. trading, lending, borrowing, etc., of currencies. While DeFi has been around for quite some time now, several people are still unaware of the technology and capabilities. If you are one of those people, it's time to hop on the wagon, as they say, better late than never. What Is DeFi? Decentralized finance is the new addition to the crypto to revolutionize traditional financial services. DeFi uses different tools and dApps (decentralized apps) as the foundation stone for several blockchains and crypto projects and makes them stronger, faster, and more effective. Blockchain has a big hand in making crypto space truly centralized as it facilitates trading between crypto using a peer-to-peer connection making it more transparent. Also, it omits the need to rely on any individual financial institution to control the narrative. By not relying on any third party for transactions, it removes the middle man and their associated fees. DeFi enables buyers, sellers, and lenders to interact directly using software written on blockchain technology. However, DeFi does not solely rely on blockchain technology as it might consist of a mix of different open-source protocols and proprietary software. For example, platforms such as Zionodes use smart contracts to provide a marketplace for crypto miners to get together and leverage the pooled resources. Regardless of the protocol used in DeFi, it is designed to make the crypto space independent of any middle man and improve traditional financial services. DeFi is

3. usually referred to when talking about the crypto world and blockchain technology. However, its potential far exceeds that and can even enhance the existing financial system considerably. What Has DeFi Technology Become So Popular? As briefly discussed above, DeFi has several advantages and capabilities, which is one of the reasons why it is so popular in the crypto world. According to several experts, DeFi will revolutionize the future of the financial system, decentralized or otherwise. Some mainstream benefits of DeFi technology are: 1.Global access Currently, over 1.7 billion adults around the world do not have bank accounts and rely solely on cash for every transaction. This large number is partly because they do not have access to a financial institution. Decentralized finance can help bring down these barriers and provide more people with access to financial services. 2.Affordable payments One of the most significant advantages of DeFi technology is that it makes payments cheaper and faster. DeFi will remove intermediaries between cross borders and lower the global remittance fee from 7% to an average of 3%. 3.Improved security and privacy Traditional financial institutions are prone to theft and privacy leaks, making them highly unreliable and unsafe. However, as DeFi does not rely on a single network or institution

4. that can be breached, it provides complete security. Also, as it depends on a peer-to-peer network, it guarantees complete privacy. Additionally, the blockchain is immutable, which means that it cannot be modified once a transaction is recorded on it. 4.Censorship resistant As DeFi is not controlled or moderated by any centralized institution such as the government. It brings more stability and a better option to the existing financial institutions that are deemed as corrupted. 5.Simple apps DeFi apps or dApps act as building blocks for blockchain projects and ensure a smooth and intuitive user experience. These apps ensure that every platform has a smooth functioning and optimal performance. While all of these benefits are robust on their own, they can provide even profound implications when combined. Considering the several use cases that DeFi can bring while providing connectivity and powerful banking services worldwide, it is safe to say that DeFi was a necessary addition to the financial world. Different Types Of DeFi Applications DeFi has numerous applications in both virtual and real-world. Some of the popular applications include: Decentralized exchanges

5. Using these exchanges, users can exchange their fiat or cryptocurrencies for other currencies to yield more profits. DEXs work a little differently than a typical crypto exchange as it connects buyers directly to the seller so they can trade without any intermediary. Stablecoins Stablecoins are a form of cryptocurrency tied to some asset in the real world, such as gold, dollar to stabilize its price. Lending platforms Lending platforms leverage smart contracts to remove middlemen such as banks while providing financial services to users. Wrapped Bitcoins (wBTC) wBTC is a way to transfer Bitcoins to the Ethereum network so that it can directly be used in the ecosystem. In turn, users receive interest on the Bitcoin they lend to the platform. Prediction markets

6. Prediction markets allow betting on upcoming events and work the same way as standard betting but without any intermediaries. Yield Farming Yield farming is a new concept and addition to the crypto mining industry. Yield farming allows users to earn yields by using their existing crypto assets. Currently, only a few platforms, such as Zionodes, offer such services. Liquidity Mining Liquidity mining is a type of yield farming where a DeFi application entices its users by giving them free tokens for their support. Conclusion DeFi is considered by many as the latest disruption to financial services. Using blockchain technology, DeFi can revolutionize the way users interact with financial services by making them more robust, secure, and private. Also, it will help to reduce costs for transactions by eliminating intermediaries. DeFi has several use cases and platforms, such as Zionodes that create a unique marketplace where cryptocurrency miners, mining farms, and hardware sellers can pool their resources to develop a beneficial solution for every party. For more information about how smart contracts work, you can visit Zionodes