2020 has become a pivotal year with regards to the growth and adoption of DeFi protocols. DeFi pulse analytics shows that the aggregate TVL (Total Value Locked) of the biggest DeFi protocols on Ethereum has risen from 500 million USD to over 9 billion USD, a staggering increase of nearly 1800% in the last year with no signs of slowing down.
To make sense of this exponential growth, we take a look at the advantages of DeFi over legacy financial systems:
- Trust in a decentralized network and open sourced code (Ethereum and Smart Contracts) instead of a central intermediary (Banks and Financial Institutions).
- Bordlerless and censorship resistant — anyone can access DeFi services as long as they have an internet connection.
- Anyone can be the customer or the service provider. Protocols such as Aave and Compound allows for anyone to be able to loan out their capital and earn borrowing interest. Depositing capital into a liquidity pool on Uniswap for LP tokens is akin to owning a fraction of a currency exchange service.
- Permissionless — no KYC requirements, no credit score check. You control your privacy. The same rules apply for everyone.
- Non-custodial — Because value is exchanged via smart contracts directly on the blockchain, you retain full control over your financial assets at all times.
Simply put, DeFi is just objectively better and more efficient than traditional finance, thanks to Blockchain and Smart Contract technology.
Yet despite the recent growth, in comparison with the market cap of banks in the world, we believe that DeFi is only getting started.
The DDF Project is building a suite of DeFi products. Feel free to follow our progress and join our community!
- Website: https://dokidoki.finance/
- Twitter: https://twitter.com/dokidokifinance
- Telegram: https://t.me/ddnfg
- Discord: https://discord.gg/K32BeEY
