Will DeFi become a disruptor in the financial industry?

DeFi includes many different agreements and participants around the world, and they are pushing people to have more open access to financial services. Institutional interest is also increasing.

What is DeFi?

Decentralized finance (usually called DeFi) refers to the transition from a traditional centralized financial system to a point-to-point finance based on distributed blockchain-based decentralized technology.

From lending and interest rate platforms to stablecoins and other tokenized assets, the DeFi ecosystem has launched an extensive network of integrated protocols and financial tools. There are a wide range of use cases for individuals, developers, and organizations.

You may all have heard of Bitcoin, but most of this development has occurred on a different platform: Ethereum. Ethereum is an open source blockchain platform with a built-in programming language that allows the development of other products and services. And it doesn’t stop there: we are beginning to see DeFi activity on other blockchains as well.

Will DeFi become a disruptor in the financial industry?

As of 2021/7/31 Defi application total lock-up (TVL)

DeFi is generally considered to be just a company, or only one use case, and is accused of being unfriendly to consumers. In fact, DeFi includes many different agreements and participants around the world, and they are pushing people to have more open access to financial services. Institutional interest is also increasing.

What does DeFi look like in practice?

The DeFi solution under development covers a wide range of fields and meets many consumer needs in the encryption field-from privacy to liquidity, insurance and transfer. The following examples begin to show the world of possibilities created by these new solutions.

Argent-Neobank of crypto assets

Argent is a simple and secure self-custodial wallet designed to allow people to control their digital assets and identities. It provides easy access to other applications built on the blockchain, such as Aave and Uniswap. Argent achieves this through a Neobank-like user experience that provides easy account recovery and transaction protection. Argent allows people to use “guardians”-friends or trusted devices-to approve transactions to untrusted addresses.

“DeFi provides transparency, community ownership and rapid innovation. We want to make it as simple and secure as the best traditional financial technology.

Itamar Lesuisse, Co-founder at Argent


Zumo is a decentralized financial platform that brings the benefits of blockchain and cryptocurrency to people all over the world. Their proprietary platform provides consumers with the safest and easiest way to gain a new and better financial future while seamlessly cooperating with traditional currencies. Their platform combines ultra-secure non-custodial crypto wallets, borderless peer-to-peer payments, electronic currency accounts in British pounds and euros), exchange functions, and Visa debit cards. In the next few months, they will launch savings and lending products.

“We believe that consumers should have access to safe, simple and regulated blockchain-based financial products, from which they can earn passive income, borrow money without affecting their credit score, and spend a small portion of the cost internationally. Transfer funds. Zumo uses the power of blockchain to provide efficient alternatives to traditional savings accounts and expensive international remittances and other failed legacy products.

Nick Jones, CEO and co-founder of Zumo money

Aave-liquidity agreement that supports lending

Aave allows users to earn interest through their cryptocurrency. According to the current market borrowing needs, those who provide cryptocurrency provide liquidity to the market and earn passive income. They and others can borrow the assets provided to the agreement. The Aave protocol is open source, funds are allocated in smart contracts, and its code is public, and is formally verified and audited by a third-party auditor. The use of public blockchain technology means that all transactions are transparent, and different types of risk exposures between different types of assets can be seen. This is an important development in lending and currency markets.

“Defi is now a fascinating field and it is developing rapidly”

Nexus Mutual-DeFi’s answer to insurance

Nexus Mutual is building a decentralized insurance alternative where the community can gather together, pool funds and share risks. They want the community to have insurance, promote it, and stay in the community for profit. As DeFI develops a new economy and a new financial framework, insurance is necessary for people to take risks and know that they are protected. When users deposit funds into smart contracts, there is a potential risk of code errors in these contracts. It is very difficult to write perfect code, so if the smart contract is hacked, the main product of Nexus will pay the claim.

“We are building a community-owned alternative insurance to support the transition to a decentralized financial framework”

Hugh Karp, founder of NexusMutual

What are the next developments worthy of attention?

In-browser payment will be an exciting next step. Web authentication means that people can access secure private keys in their web browsers via touch or face ID, which means that encrypted payments can be used in the real world. A website will only ask for payment in cryptocurrency without knowing the username of the person it is asking for.

Companies such as Transak and Slope are also stepping up to bridge the gap if someone wants to send money in crypto, but the recipient would prefer fiat currencies such as British pounds or U.S. dollars.

“The user experience of crypto will continue to improve. Companies from wallets to exchanges to social media platforms and browsers are working hard to make it easier to accept and send crypto than fiat currencies, thanks to the mainstream – especially millennials – —The increasing popularity. Where cryptocurrencies were difficult to obtain in the past — and full of risks — with the start of regulation, I hope to see cryptocurrencies and NFTs become a routine aspect of daily life in the near future”

Erica Stanford, founder and CEO of Crypto Curry Club

What needs to be done to increase customer trust and adoption?

Clear regulation: This really helps to adopt stablecoins and other assets on a large scale and build confidence in the company’s stability, legality, and trustworthiness.

Brand confidence: People buy Nike sneakers and then buy Nike stock. Therefore, people may start to own certain types of coins and then become more comfortable using the wider services provided by the network.

Strong investor appetite: Appetite from venture capitalists will also help, because to get them to join, you need to prove that you can build a successful network.

Will DeFi become a disruptor in the financial industry?

(Existing product line on the eth chain)

The future of DeFi

The promise of cryptocurrency is to make money and payments available to anyone, no matter where they are.

The decentralized financial movement takes this promise a step further. Imagine a global open alternative to every financial service (savings, loans, transactions, insurance, etc.) you use today, accessible to anyone in the world with a smartphone and internet connection.

As an investor in this field, it is remarkable to have witnessed the growth and maturity of the defi agreement in the past few years. This is a sport that is flourishing in every corner of the world. With the global user base and investment from top US investors, some global champions choose the UK to build their vision and team. As a global financial technology leader, by providing a clear regulatory framework and a supportive innovation ecosystem, the UK is fully capable of becoming the preferred destination for top crypto and DeFi startups to build future financial technology champions.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/will-defi-become-a-disruptor-in-the-financial-industry/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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