It is undeniable,:decentralized finance, called DeFi (Decentralized Finance) is enjoying enormous success in the last period. But let's start from the beginning, what is DeFi?
DeFi can be defined as a set of modern financial instruments based on decentralized means and networks, thus essentially a large platform that uses the Blockchain and Ethereum's smart contracts to function.
The main features of DeFi are precisely the use of decentralized networks and smart contracts, which are useful for its functioning. Decentralized networks as we know make the functioning of DeFi transparent, public, secure, immutable, open and shareable within the Blockchain. While smart contracts allow the automatic execution of processes, in a safe and predictable way. A smart contract built for the provision of loans between individuals, for example, will allow the automatic execution of the loan process between individuals in a totally safe, predictable manner and without the intervention of a third party.
Among the most interesting DeFi applications we find decentralized exchanges such as Uniswap where it is possible to buy and sell tokens in peer-to-peer, without intermediaries, without volume limits, with the possibility of keeping the keys of one's "wallet" without entrusting them to centralized exchange, or platforms where it is possible to grant or request cryptocurrency loans without an intermediary such as Compound, or how not to mention the most important De-Fi platform in the world of lending i.e. MakerDAO, which grants loans in DAI stablecoin, anchored to the US dollar. Zero documents or authorizations: it is enough to possess the cryptocurrency Ether (Ethereum) in sums exceeding 50% of the loan, to be deposited as collateral.
DeFi therefore continues to be hugely successful because the enormous potential is undeniable. Development is still in its infancy and will surely hold us other pleasant surprises in the future.
