Decentralized finance(DeFi) has taken the blockchain network by a storm and is now arguably the most discussed topic. Although it has been a roller coaster ride, the DeFi network has grown enormously in size and number. Today, the total value locked in DeFi contracts is more than $11b.
Forex Market Alone is More Than $6 Trillion
DeFi’s growth and hype can be attributed to several reasons, mostly bordering around profitability and ease. Essentially, DeFi or open finance allows users to utilize traditional banking services like credit systems, saving, investing in a peer-to-peer permissionless protocol, which is usually Ethereum. Most importantly, open finance is a careful attempt to eliminate third parties and intermediaries while offering traditional finance services.
Although DeFi can never compare to traditional finance in size (the forex market alone is more than $6 trillion in size), there are many similarities in model. DeFi’s fuel is volatility, practically a cash flow/circulation cycle….