What is decentralized finance?

Decentralized finance. Financial services with no central authority. Usually open-source, permissionless and blockchain based. Decentralized finance (commonly referred to as DeFi) is an experimental form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial

What are the advantages of decentralized lending?

Open, decentralized lending offers numerous advantages over traditional credit structures including: Secured lending using open protocols like MakerDAO and Dharma are designed to rely on the trust-minimization that Ethereum affords to reduce counterparty risk without requiring an intermediary.

What is a decentralized prediction market?

Decentralized prediction markets are one of the more compelling components of open finance that are highly complex but offer enormous potential. Augur launched last year to much fanfare as a censorship-resistant prediction market based on Ethereum, and other platforms like Gnosis are set to follow suit.

Is cryptocurrency volatility a problem for Defi?

Cryptocurrency volatility is a problem for lots of financial products and general spending. The DeFi community has solved this with stablecoins. Their value stays pegged to an another asset, usually a popular currency like dollars. Coins like Dai or USDC have a value that stays within a few cents of a dollar.

Is Ethereum a decentralized financial service?

There’s a decentralized alternative to most financial services. But Ethereum also creates opportunities for creating financial products that are completely new. This is an ever-growing list. As a blockchain, Ethereum is designed for sending transactions in a secure and global way.

How can we see the potential of Defi in the future?

One of the best ways to see the potential of DeFi is to understand the problems that exist today. Some people aren’t granted access to set up a bank account or use financial services. Lack of access to financial services can prevent people from being employable.