The existing financial system can provide many things. However, it cannot provide its services to everyone, and sometimes its efficiency is very troublesome. The good news at the moment is that there is a bold alternative called DeFi (distributed finance), which can solve customer pain points.
With DeFi, people all over the world can no longer feel the lack of financial affairs. They may bear the risk of losing hard-earned funds because of the risk appetite, mistakes and fraud of financial institutions. How to solve these problems? You can find the answer below.
First of all, what is distributed finance?
DeFi aims to provide alternatives to many traditional financial products and services, such as transactions, loans, and investment opportunities, while remedying their shortcomings and opening the system to everyone.
It also creates the infrastructure for the crypto assets to be used instead of putting them in the user's wallet. But the killer function of DeFi is how it reshapes the basic mechanism of financial solutions and improves their efficiency through decentralization and cutting-edge technology. Here are some of the key points:
1. Realize risk control and upward optimization through distribution and automation.
In DeFi, users can fully control and understand the information of their own assets. This means that their funds cannot be invested in riskier projects without their knowledge. Users can transparently see all the necessary data about financial products on the blockchain and make the best decisions on how to use their funds.
2. A variety of ways to make money and use cryptocurrency.
DeFi also provides many opportunities to make profits while continuing to keep your cryptocurrency! This can be done without meeting strict requirements like traditional finance, so even 1.7 billion unbanked banks are welcome.
3. Become a shareholder and not just a passive user in the DAO organization.
Many DeFi projects have launched DAOs (Blockchain-based Decentralized Autonomous Organizations) to enable users to become some kind of shareholders, vote on the functions and development methods of these DeFi solutions, and obtain benefits from them.
All in all, DeFi provides users with greater freedom to participate in the solutions they need in a decentralized manner under the conditions of their choice, without any hidden dangers and intermediary costs. At least this is what DeFi claims... but is it really effective?
Why haven't all of us switched to the DeFi world?
Rather, this is a new concept. It will need to better adapt to customer needs and solve some of its maturity issues:
1. Few DeFi projects can provide users with realistic revenue-generating models.
Many projects there provide users with opportunities to make money, such as game theory. This means that you put in money and then withdraw more, but don't understand what caused the total amount to appreciate in the pool. Such a revenue-generating model is unsustainable in the long run, and it is not surprising that it scares off many users.
- DeFi still lacks an overall, user-friendly ecosystem.
A real bank can provide you with a complete set of solutions to process your funds and increase your funds in many ways. It is not very common to provide the same services in DeFi. . Therefore, users must switch between different solutions, pay repetitive fees, spend time on research and registration, and bear the risk of keeping sensitive information on multiple platforms.
3. Few Defi projects are fully audited and compliant, which limits their growth.
Since all financial products in DeFi are based on smart contracts that automatically execute transactions, not company employees, you need to make sure that they execute transactions correctly. You also want to make sure that the behavior of the DeFi project complies with the law and that no one will bother the team with all users fleeing and crashing.
Recently, some good DeFi solutions are solving these shortcomings. Take Nimbus as an example. This is an established financial technology company that has joined DeFi now, aiming to root it in practical applications and develop DeFi applications that are more friendly and efficient to ordinary users.
Nimbus is a platform to watch in the next wave of DeFi
Nimbus is a well-known financial technology company with a reputable team and a year-long record of providing blockchain-based financial solutions to 50,000 users. In the coming days, it will launch a new DeFi ecosystem, which is likely to be at the forefront of DeFi in the next few years.
why? Because Nimbus combines all the best practices of traditional finance and decentralized finance, and solves the main pain points of DeFi users in an overall manner. Managed by an experienced team with a highly relevant background.
Get to know Nimbus: A DeFi ecosystem based on a clear profit model and dedicated to providing users with at least 10 profit strategies.