DeFi: The Most Asked 9 Questions And Its Answers
Everything crypto these days doesn't seem to make sense without the addition of DeFi or it's related entities. Many have been asking questions because this word just seems to be traveling faster than many would have expected. Among the plenteous question, here are the most pressing nine people just want answers to and you will surely find your answers here.
What exactly is DeFi?
This word is an abbreviation of two words joined together. It is a short form for the words decentralized finance. So instead of having to call these two words over and over again, it was abbreviated to DeFi. Now, what is this type of finance all about? Decentralized finance is a system that was put in place to make life easier for various financial transactions. It wasn't created to compete with the traditional banks but to stand on its own and create better services for people's financial transactions.
What does decentralized finance mean?
You already know that DeFi is short for decentralized finance but you probably are wondering what decentralized finance is. This finance includes all the digital assets, smart contracts you might have been hearing about which would be explicitly DeFined in one of the questions below. DeFi also includes protocols and decentralized apps that are built under the Ethereum blockchain network. This means that DeFi is primarily a system built on the Etheruem blockchain that allows for financial transactions such as investment, lending and borrowing, and other similar transactions.
How does DeFi work?
The fact that it is a system that is tagged as decentralized simply means it isn't controlled by a general governmental body like the regular banks. With this system in place, every transaction will be monitored and controlled by the owner and thereby give the owner full access to what you own. The way it works is quite simple and straightforward. It works with various smart contracts, the decentralized application configured under the Ethereum blockchain system. Another very interesting thing everyone is talking about DeFi is the universal access to your digital assets. All the built-in systems in DeFi are not restricted to a location so financial services just got easier and faster.
What are smart contracts?
I bet the next question on your mind is what this smart contract under DeFi is all about. Well, smart contracts on the decentralization technology such that it is not controlled by a central authority. In simpler terms, it is a contract that is smart enough to perform any assigned task without any further supervision. It is built using codes by any developer at all and then it begins to self run without any further monitoring. Although, sometimes the contracts are revised and modified they are not controlled by a central body. It is very credible since the contract is irreversible, as the code that backs it up is already built into the blockchain network. There are various types of smart contracts that can be used for any financial transaction included in the contract. Also, this contract can be used by anyone, all you need is to be sure of what it entails and the contract keeps going without any external disruption.
What are decentralized apps and how is it different from the conventional apps?
This is another very common question that is asked among crypto enthusiasts. There are simple applications that are being run under the DeFi system. These applications are short for DApps and it means they are not controlled by a central body and that implies that it cannot just be put on hold by just anybody or just pack up anytime. Now how is it different from the regular apps we use every day?
a) It doesn't need a third party for a transaction or storing value. You just need your specific code and with no assistance whatsoever your transaction can be performed by you.
b) It uses a network called P2P. With this form of network, the background support of the app is more secured and reliable.
c) It works on a system such that the integration of other apps can be done. This simply means different DApps can be merged and the transaction will still be intact.
d) You have full control of your resources locked in the app and every detail is transparent to you which is DeFi in contrast to the regular banks.
How can I benefit in what DeFi has to offer?
The same way you benefit from blockchain is also the way you will benefit from this finance system. The decentralized apps that are embedded in the system are what gives the system the background power to offer great services. You get to benefit by just signing in to the system and running your transaction with a very low cost to it. With all the transparency and easy access, you will just be happy you signed in.
Who can get access to it?
This is one question that some other people that are not familiar with the system have been asking. This is not race-based or country-based rather it cuts across any barrier that might suffice with the universal system. You don't have to be in the country that you first opened your account before you can access it.
Where does DeFi fit in the future?
This new development of DeFi into the blockchain has been coming with some risks, it has been posing lots of question as to whether it will still be effective as it is now. But many are saying that DeFi is truly the great future of digital finance. DeFi is on the path to breaking the conventional system of banking and making it a better way for banking transactions to be done in the most transparent way possible. Who wouldn't buy into that? DeFi is truly the future of finance and its place in the future is not questionable.
What crypto exchange platform can I use?
BitForex is an exchange service platform that can be classified as one of the Top 10 cryptocurrency exchange services. It is focused on providing millions of users with a digital currency trading and investment tool that is not only safe but also professional and convenient. BitForex has a high customer-oriented culture and state-of-the-art financial technology.
BitForex is programmed in a way that it can quickly adapt to the changes of the Crypto market while introducing new features like margin trading, enhanced trading charts, derivatives, and a host of others. The headquarter of BitForex is located in Hong Kong, while there are branch offices in countries like the United States, South Korea, and Singapore.
No doubt, most of your answers are already answered and you are sure of how this whole DeFi thing will turn out. You still need to make a move to belonging to the system and you can start that seamless transaction you ever wanted.
Eazyswap
EazySwap, a sub-platform of BitForex Crypto-currency Exchange will launch on September 5, 2020. EazySwap has one of the most professional and advances semi-decentralized matching Protocols, all the trading records and data will be able to trace by the ERC-20 Blockchain system, EazySwap also provides the most user-friendly structure which designed to solve the "High Gas Fee" problem, while still remain its decentralized advantage. 0 gas fee is charged for any transaction in the system. also, EazySwap will be rewarded up to 80% of the trading fees to each liquidity pool provider.
EazySwap currently supports ERC20 based token and many more mainnet token will be supported soon.
With a low barrier of listing requirements for the project, a unique rewarding system for the user and liquidity provider and one of the most professional and advance semi-decentralized matching Protocol with 100% trading data on-chain structure, EazySwap hope to booth up the Defi market and your participation will make us together achieve this historical and revolutionary moment.
About BitForex:
BitForex is an exchange service platform that can be classified as one of the Top 10 cryptocurrency exchange services. It is focused on providing millions of users with a digital currency trading and investment tool that is not only safe but also professional and convenient. BitForex has a high customer-oriented culture and state-of-the-art financial technology.
BitForex is programmed in a way that it can quickly adapt to the changes of the Crypto market while introducing new features like margin trading, enhanced trading charts, derivatives, and a host of others. The headquarter of BitForex is located in Hong Kong, while there are branch offices in countries like the United States, South Korea, and Singapore.
