DeFI stands for DECENTRALIZED FINANCE that is operated by the blockchain.
DeFI is meant to give the people and institutions freedom from central banks that been controlling the money circulating and supply for decades. As everything old has limits and needs an upgrade, the blockchain gives the power back to the people and doesn’t have restrictions, neither regulations.
Advantages of DEFI are :
- You’re in control of your finances.
- Earn money…on your money
- Access to other forms of capital
- Permissionless (anyone can participate)
DISADVANTAGES of DEFI are :
- Data feed centralization
- Capital inefficiency of DeFi loans
The first DeFI major coin was MakerDAO, found by Rune Christensen.
DeFI products are mostly used to borrow and lend loans, especially flash loans.
In reality, DeFI it’s built on Etherum and based on dAaps and smart contracts. Everyone can create an DeFi app if they have access to smartcontracts from Etherum. DeFi apps don’t require information from users like personal information. The easiest way to start using DeFi is through MetaTask which is a Google Extension that Is created to connect Dapp Ecosystem easier. It’s also used as a wallet.
Daap stands for decentralized apps, and basically, they cut the middle man for confirmation and transaction and instead of that its used daap that is created under blockchain
The DeFI market is over 11 billion right now, and It’s growing every day due to new application and adoption in real world.