What DeFi Is Doing to Your Money is similar to Postal Service as a Result of Email

What DeFi Is Doing to Your Money is similar to Postal Service as a Result of Email

DeFi News
June 15, 2022 by Diana Ambolis
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Years from come, I believe Q2 2020 will be seen as a watershed moment in the growth of DeFi and the solidification of Ethereum’s unavoidable network effects. Everything worth constructing is being built on Ethereum, and the drive to create a new alternative P2P banking system is propelling this feeling. We’re talking about money legos
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Years from come, I believe Q2 2020 will be seen as a watershed moment in the growth of DeFi and the solidification of Ethereum’s unavoidable network effects. Everything worth constructing is being built on Ethereum, and the drive to create a new alternative P2P banking system is propelling this feeling. We’re talking about money legos that stack to save time and money and offer wider global access to applications with incredibly cheap fees, high yield, and no middlemen.

Q1 of 2020 already brought about the highly public milestone of $1 billion total value locked TVL placed into DeFi applications. Still, it was unexpectedly followed by the worldwide economic crisis connected with the coronavirus pandemic. After a nearly 50% drop in pricing across crypto-asset markets at the end of Q1, I could never have guessed that Q2 would rebound to a historic high of $4 billion placed into DeFi applications and protocols.

Describe finance.

Finance can be thought of as a societal tool for managing resources, risk, and rewards over time and geography. Saving, borrowing, lending, investing, budgeting, and forecasting are all examples of financial management. Financial services now account for roughly 20% of global GDP.

What exactly is DeFi?

Decentralized finance, or DeFi, is a word used to describe applications that employ “blockchains,” a type of software that may be used for everything from simple value transfers to more complex financial activity. Ethereum is where the majority of DeFi activity takes place. Anyone can use these decentralized applications (Dapps) and protocols (instructions for computer-to-computer communications) and construct services on top of them without requiring authorization. DeFi offers new capabilities and answers to the same timeless economic needs: pay, save, trade, and invest. In DeFi, there’s something for everyone.

There’s a simple explanation for all this growth beyond the flashy stats and hard-hitting data you’ll find in this report: DeFi has something for everyone. The modularity of DeFi money legos, combined with the world’s largest community of Ethereum developers by many orders of magnitude, has resulted in new P2P money applications for lending, borrowing, trading, stablecoin swaps, DEX aggregators, margin trading, futures, BTC futures, tokenized BTC, options, derivatives for commodities and forex, and, thanks to Balancer, newly launched ETF-like exposure. In barely three months, most of this was launched or made generally available for usage.

Also, read – This is How DeFi is Innovating The World of Finance

In three months, DeFi on Ethereum has seen more innovation than legacy finance has seen in three decades.

It’s not difficult when you use these apps regularly and see that they not only operate but also provide an asymmetric value that our community would be devastated to lose. If you remember the first time you used email, AOL Instant Messenger, or Napster, you can’t deny their revolutionary usefulness. DeFi is transforming money in the same way that the postal service was transformed by email.

There’s something for everyone, thanks to the wide range of DeFi applications built on Ethereum. It would be a shame if you read this ecosystem report and don’t test one of the many DeFi applications that are redefining how future generations will transact peer-to-peer, but one word of caution: once you see this, there’s no going back.