Why DeFi Is Scaling So Fast & Why Does It Matter?



The 2008 financial crisis was an eye-opener on how fragile our current financial system is and heavily reliant on banks and financial institutions that act as intermediaries in providing any financial service.


Financial infrastructure has structurally not changed since the industrial revolution and it is similar to software in the pre-internet era. High entry barriers, opaque and inefficient processes and high transaction cost has resulted in limited innovation in core finance.


In India, over 190 million adults don’t have bank accounts; merchants have to pay 2-3% on every card or online transaction; small businesses find it difficult to avail credit from banks and international wire transfer is expensive. Trades in capital markets are executed electronically yet the settlement period is T+2 days.


While many fintech startups have emerged in the last decade, they are built on top of existing financial rails. The creation of financial products and services has always been a top-down process dominated by a few large financial institutions such as asset management firms, commercial banks and insurance companies.


DeFi is a bottom-up innovation that takes the component of centralised finance and replaces human trust with math-based trust, paperwork with smart contracts, legal enforcement with cryptographic enforcement, and third party audit with open source code and public ledger.


It is enabling developers to create new financial products such as decentralised banking, decentralised money markets and decentralised asset management firms.


DeFi aims to be 10x better, faster and cheaper compared with today’s financial services.


Source >> https://economictimes.indiatimes.com/markets/cryptocurrency/why-defi-is-the-biggest-thing-in-the-history-of-finance/articleshow/89745980.cms


DeFi Development Company


Sellbitbuy, the leading DeFi Development Company, offers world-class exclusive DeFi development services and solutions for you to start an independent financial business across global countries. Our hands-on-experience in this field acts as a helping hand for the clients who require P2P decentralized finance development solutions like our self-executing smart contracts, dapps, & more.

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