DeFi: The Rise of Decentralised Finance in Blockchain

MFET
2 min readJul 14, 2023

Blockchain technology has brought many innovations that have revolutionised the world of finance. One of these innovations is an ecosystem called Decentralised Finance (DeFi). DeFi is a structure where financial transactions are carried out through decentralised applications without the need for traditional financial institutions. In this article, we will discuss DeFi’s position in the blockchain, the benefits it brings, and the advantages of DeFi projects.

DeFi’s Position in Blockchain:

DeFi is an ecosystem built on blockchain technology and performs financial transactions using smart contracts. Platforms that support smart contracts, such as Ethereum, enable the development of DeFi projects. This eliminates the need for traditional intermediaries for financial services and allows users to interact directly with each other. DeFi projects benefit from the transparency, security and automation advantages offered by blockchain technology, enabling financial transactions to be carried out faster and more efficiently.

Benefits of DeFi to the Cryptocurrency World:

DeFi has many important benefits to the cryptocurrency world. Firstly, DeFi projects provide access to financial services to those who are excluded from traditional financial systems. Especially for people in developing countries who do not have bank accounts or do not trust financial institutions.

Furthermore, one of the biggest advantages of DeFi is its liquidity. Unlike centralised exchanges, DeFi projects are built on direct peer-to-peer transactions and benefit from liquidity pools. This provides liquidity without the need for any intermediaries and allows users to make faster and low-cost transactions.

Benefits of DeFi Projects:

DeFi projects offer a number of benefits. Firstly, it allows users more freedom to control and manage their financial assets. Without the restrictions and limitations of centralised financial institutions, users can directly control their own assets and transact the way they want.

Also, thanks to DeFi projects, financial transactions become more transparent and secure. Blockchain technology provides a ledger where all transactions are recorded and traceable. This prevents fraud attempts and allows users to feel safe.

Conclusion:

DeFi is an ecosystem built on blockchain technology, where financial transactions are carried out through decentralised applications instead of centralised financial institutions. DeFi projects bring many benefits to the cryptocurrency world and expand access to financial services. By leveraging blockchain’s advantages of transparency, security, and automation, DeFi projects put users in control of their financial assets and allow for faster, efficient, and secure transactions.

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