Democratising Financial Services: The Benefits of Decentralised Finance (DeFi)
Decentralised finance is an industry that is growing in popularity. Decentralised finance is a more accessible, more transparent, and more efficient alternative to traditional financial services. By eliminating the need for centralised financial institutions, we create a more open and trustworthy financial system, and one that’s far more accessible.
For a lot of people, decentralised finance is the best way to secure funding. Traditional finance options can be limiting, and in some cases, completely inaccessible. Secured by blockchain technology, decentralised finance will reduce the risks of fraud. It will also make managing finance far more cost-effective and efficient.
Regardless of what you’re seeking to accomplish, using a DeFi platform in place of doing business with a traditional financial institution can offer several benefits.
- Accessibility: Some people are unable to open bank accounts or receive loans, but anyone with an internet connection can access a DeFi platform. That high level of accessibility means that DeFi transactions occur without any geographic restriction.
- Low fees: With no intermediary, transaction fees are greatly reduced. People who borrow and lend money via DeFi networks typically incur much lower fees than those charged by traditional financial institutions.
- Complete transparency: Blockchains are immutable, meaning they cannot be changed. Smart contracts are available for anyone to review. Whilst DeFi platform users benefit from the blockchain’s transparency and security, smart contracts are executed in a way that protects the privacy of the platform’s participants. The publicly available transaction data does not reveal your real-life identity.
- Eliminated intermediaries: The Global Financial Crisis of 2008 illustrates the interconnectedness of banks and governments and the inherent risks of centralised systems. Individual financial institutions holding your money can face corruption or become over-leveraged. The decentralised nature of DeFi mitigates much of this risk. DeFi platforms don’t rely on centralised financial institutions.
Final Thoughts
The DeFi movement promises to bring a lot of benefits to customers and investors, including accessibility, greater transparency and eliminating intermediaries and central oversight, making finance more accessible and creating new opportunities.
Given DeFi’s impressive growth to date, it’s hard not to feel optimistic about the future of the space. At Flashloans.com, we are excited about DeFi’s future and we’re proud to contribute to the sector’s success.
Flashloans is a new DeFi tool that allows users to create and perform a Flash loan backed trade from an easy to use UI. For more information go to www.flashloans.com
