Smart contracts for ICOs once caused a big “explosion” in 2021. For a long time, this way of collecting money remained the main advantage of blockchain. The main one, but not the only one. Now a new revolution called decentralized finance is starting.
Last spring, U.S. Forbes called the DeFi sector “a new dynamic that has reinvigorated the cryptocurrency industry. Decentralized finance has indeed become a trend in 2019, and so far, its popularity continues to gain momentum.
DeFi is a financial instrument in the form of services and applications created on the blockchain, MoneyClip from Wellfield is a great example. The main task of decentralized finance is to become an alternative to the banking sector and replace the traditional technologies of the current financial system with open-source protocols. That is to open access to decentralized lending and new investment platforms for a large number of people. And allow them to earn passive income from cryptocurrency assets, as well as save on transfer fees, loans, and deposits.
Most of the existing DeFi are created on the Ethereum blockchain and the number of new applications in decentralized finance is steadily growing. In early February, for example, the number of Ethereum blockchain-backed DeFi applications reached $938.
Advantages and disadvantages of DeFi-applications
Despite the fact that the decentralized apps sector is just emerging, the benefits are already quite numerous. The main one is that any user can get a particular financial service, for example, a loan, bypassing the bank. Decentralized lending protocols minimize risk and provide 24/7 access to borrowed funds. New products are especially relevant for borrowers from countries with expensive bank loans.
The procedure for creating your own digital asset and putting it on the market has become noticeably simpler and accessible to almost everyone. Payment processing lasts not several days, but a couple of hours at most, interest rates and commissions are much lower. Also, users have new ways to make money on cryptocurrency.
For developers, the obvious advantage is the ease of creating applications due to transparency and open source, and decentralized finance projects can be developed on any platform that interacts with smart contracts.
2022 will be exiting for DiFi
Undoubtedly there will be a lot of DeFi innovations this year. For example, Wellfield Technologies is going to launch its revolutionary MoneyClip app. As you might know in November of 2021 Wellfield’s common shares have become available for trading on the TSX Venture Exchange, under the tickers WFLD. All of these things combined made the company of the biggest players on the market.
As the year is beginning, we expect many new announcements not only from Wellfield but also from other DeFi companies. This will be a great year, do not miss your chances.