If you have ever heard the term crypto currency and Ethereum in the news this year you were actually following news about the broader term known as Decentralized finance or DeFi.
Decentralised finance (“DeFi”) is an umbrella term used for the blockchain form of finance that is open to anyone. Essentially, it cuts out the need for middlemen using a decentralized system that can consist of a mix of open-source technologies, blockchain, and proprietary software and can be vastly complex, virtually lawless and often hard to grasp.
What does DeFi do?
- Offering people more control over their own money is one of the more enticing aspects of DeFi, but it doesn’t stop there.
- It is also largely censor free and highly programmable.
- DeFi is evolving at a fast pace with some countries already adopting cryptocurrency as a formal mode of financing.
However it is not without risks that can include hacking and scams.
DeFi for the Future
As DeFi evolves, it is certain to play a large role in the future of finance options for humans around the globe. Since the Covid-19 pandemic, and our increased reliance on the internet, the idea of global financial services independent of banks is certainly gaining momentum.