Blockchain Technology is already showing banks that decentralisation could replace the centralization in banks and that the tech is serious about changing the game for many people. Over the past few weeks, Decentralized Finance (DeFi) has been up like the sun, visible to all and making waves. 

Decentralized Finance,  DeFi

Though, it has been around for quite a while now via many cryptocurrency exchanges but now through many viable projects. DeFi, as it is fondly mentioned by many, provides several banking services in a better and more secure environment. Bitcoin began as a leading financial technology as it improved transaction speed, settling times, security, privacy, and removed border restrictions. DeFi is using the same underlying technology via blockchain smart contracts especially on Ethereum blockchain to provide services that are originally peculiar to banks. Some of these services are interests on savings, automated loans, stablecoins, insurance, analytics, etc. These services are tailored to help users experience banking on the blockchain via cryptocurrency. Now, people who are afraid of trading because of losses can enjoy passive incomes with their token or coin of choice via a widely available and now trending DeFi services around. 

Banking Services back into the hands of the People

The aim is to put banking services back into the hands of the people and let them have total control over their funds. Banks are known to take money from their customers, deduct multiple monthly fees from them while returning very low interest back into their accounts. DeFi is making eligibility for loans easier via smart contract automated loans.

Banking the Unbanked

Being eligible for loans in banks requires a lot of processes and documents that shut the door of certain banking services against many. It is because of these long processes and required documents that many unbanked people in the world today remain so. Analytics from 2018 showed that two-thirds of the unbanked people in the world use mobile phones that could help them access financial services. It is no doubt that DeFi services can be made simpler to service more unbanked people. 

People like Didi Taihuttu (@Diditaihuttu on twitter) and Frisco D’Aconia (@CryptoTraveler1) who are nomads have experienced what the blockchain could do in presenting financial services as they are detached entirely from banks. From @CryptoTraveler1’s experiences, travelling from country to country doesn’t make it easier to have a particular bank since their interoperability is minimal and close to none in many cases. The only way is to keep funds in a safe that is not restricted by borders- Blockchain Technology. 

Will DeFi Current Bubble Burst? 

Bubble Burst or not, the fact remains that the usefulness of DeFis cannot be overemphasized. So far services like these are used, even if the bubble burst, they will continue to be relevant.