The so-called DeFi, or Decentralized Finance, is called: decentralized finance or distributed finance. Decentralized finance refers to those applications in various financial fields developed in an open decentralized network. The goal is to establish a multi-level financial system based on blockchain technology and cryptocurrency to recreate and Improve the existing financial system.
What are the different forms of DeFi?
Just as there are many different decentralized applications, there are also many different decentralized financial applications, including:
1. Payment-Payment-type decentralized financial applications generally have their own digital currencies. Users can use them for transactions/transactions, and will also provide money/package addresses for users to hold these digital currencies.
2. Borrowing D-Decentralization Borrowing D is a core application that tries to decentralize the economy. Unlike now, people have to go to banks/banks to obtain housing D. The goal of decentralized lending is to allow people to obtain D funds from more funded lenders and democratize the entire D borrowing process.
3. Stable currency-stable currency is an asset with price stability characteristics, so it is suitable for functions such as transaction medium, accounting unit and value storage. Compared with digital assets such as Bitcoin, Ethereum and other volatile digital assets, stablecoins have received more and more attention in the field of digital assets because of their price stability.
4. Decentralized exchanges-Decentralized exchanges allow users to trade digital assets such as Bitcoin and Ethereum. Decentralized exchanges were created to solve the problems of centralized exchanges. In centralized exchanges, users do not have their own private keys, so they cannot control their own property.
At present, there are thousands of DeFi projects. In addition to the above four types, there are decentralized wallets, insurance platforms, prediction markets, identity authentication, etc., all belonging to the category of DeFi. We can see the early stages of a new industry, and the entire DeFi ecosystem is booming.