Leia isso em português

DEFI comes from the English "Decentralized finances" and basically means giving users power over their own finances, shortening paths and eliminating third parties through the blockchain. For those who are already in the crypto environment, it is very common to manage their funds through the famous wallets, without any control from the government, banks or companies. Want to learn more about the topic? Follow this article to the end!

Understanding Decentralized Finance (DeFi)

To understand the concept of DEFI and how it works, it is important to look at how the structure of centralized finance works.

Centralized finance

In the traditional environment (centralized finance), our money is stored, handled and kept by banks and financial institutions whose main goal is to make more money, and therefore we are abusively taxed for every service we use. Until recently, for example, we had to pay to make a simple transfer, to maintain an account, or to make withdrawals. We also pay absurd interest rates on loans, which are often bureaucratic and complicated to obtain, and are not adequately rewarded when we lend our money to the state through investments.

Financial services in most parts of the world are extremely bureaucratic and inaccessible to the poorest part of the world's population. It is clear that people with greater purchasing power are favored in the delivery of services and in the provision of good service by institutions. However, most people do not receive good service from the banks and companies that serve this sector.

Decentralized finance

At DEFI, people can transact through the blockchain without using the structure of financial institutions. Initially, it was only possible to transfer financial amounts and trade assets quickly, cheaply, without intermediaries, and to any place in the world.

But development has gone so far that today we can lend, borrow, negotiate, and make more profitable and secure investments than in the traditional market. All this is done with the help of software that automatically records and verifies financial actions in databases. This database is distributed and accessible in multiple locations; it collects and aggregates data from all users and uses a smart contract to verify it. Today there are some customization applications that are super intuitive and accessible, and that deliver profitability beyond what the conventional market provides.

The big proposal of the concept of decentralized finance was to change the timing of each transaction and democratize access to financial services. Even though the percentage of the population that uses or knows about DEFI is small, we can say that the purpose of decentralization is fulfilled. Nevertheless, the topic is still very broad and we have a lot of content to discuss on this topic. Do you know DEFI? Would you like to have more content on this topic? Do you already use a DEFI platform or tool? Comment on this article on our Telegram channel or on our Linkedin page.

Leia isso em português

DEFI comes from the English "Decentralized finances" and basically means giving users power over their own finances, shortening paths and eliminating third parties through the blockchain. For those who are already in the crypto environment, it is very common to manage their funds through the famous wallets, without any control from the government, banks or companies. Want to learn more about the topic? Follow this article to the end!

Understanding Decentralized Finance (DeFi)

To understand the concept of DEFI and how it works, it is important to look at how the structure of centralized finance works.

Centralized finance

In the traditional environment (centralized finance), our money is stored, handled and kept by banks and financial institutions whose main goal is to make more money, and therefore we are abusively taxed for every service we use. Until recently, for example, we had to pay to make a simple transfer, to maintain an account, or to make withdrawals. We also pay absurd interest rates on loans, which are often bureaucratic and complicated to obtain, and are not adequately rewarded when we lend our money to the state through investments.

Financial services in most parts of the world are extremely bureaucratic and inaccessible to the poorest part of the world's population. It is clear that people with greater purchasing power are favored in the delivery of services and in the provision of good service by institutions. However, most people do not receive good service from the banks and companies that serve this sector.

Decentralized finance

At DEFI, people can transact through the blockchain without using the structure of financial institutions. Initially, it was only possible to transfer financial amounts and trade assets quickly, cheaply, without intermediaries, and to any place in the world.

But development has gone so far that today we can lend, borrow, negotiate, and make more profitable and secure investments than in the traditional market. All this is done with the help of software that automatically records and verifies financial actions in databases. This database is distributed and accessible in multiple locations; it collects and aggregates data from all users and uses a smart contract to verify it. Today there are some customization applications that are super intuitive and accessible, and that deliver profitability beyond what the conventional market provides.

The big proposal of the concept of decentralized finance was to change the timing of each transaction and democratize access to financial services. Even though the percentage of the population that uses or knows about DEFI is small, we can say that the purpose of decentralization is fulfilled. Nevertheless, the topic is still very broad and we have a lot of content to discuss on this topic. Do you know DEFI? Would you like to have more content on this topic? Do you already use a DEFI platform or tool? Comment on this article on our Telegram channel or on our Linkedin page.