If you are interested in crypto currency then it is essential to know about DeFi which is becoming a more topical subject as crypto popularity increases.
Definition
DeFi is an acronym for Decentralized Finance. In itself includes peer-to-peer (i.e. without a third party between two persons) financial services on a public blockchain, mainly on Etherium.
With DeFi it is possible to do about the same thing that banks traditionally do, such as raising interest, lending, lending, insuring, derivatives and exchanging assets. However this is done much faster and without additional bureaucratic requirements; Neither third party is required.
Why is DeFi important?
DeFi takes the Bitcoin template and further develops it, creating a digital version of Wall Street, albeit without the extra resources (offices, bills, salaries). DeFi seeks to use a more open and less regulated environment to give it some form, to maintain the pluses of this approach so as not to hurt the user.
What are the advantages of DeFi?
- Publicity: No additional paperwork is required to open an account. You can access services directly by creating a wallet.
- Anonymity: You do not need to share your name, email or personal information
- Flexibility: You can move your property wherever you want without additional waiting, requests, confirmation or payment.
- Speed: Interest rates and bonuses change quickly and frequently compared to traditional banks.
- Transparency: Anyone can view the full list of transactions (companies rarely allow this)
How does it work?The user has access to DeFi mainly through dapps (decentralized applications) that are on the etherium blockchain. Compared to a traditional bank, you do not need to fill out a form or open an account.
OSSCHain Multi-Chain Crypto Wallet offers several types of DeFi applications:
- Lending: You can transfer your crypto to someone else to have a passive income. Every minute and not every month
- Borrowing: You can get a loan without additional documents; Which is naturally not found in banks
- Exchanges: Peer-to-peer exchanges can take place around different crypto properties as well as stocks, so hiring brokers is no longer necessary
- Deposits: You can turn your crypto into a deposit for profit, which offers better interest rates than a bank by choosing the right cryptocurrency at the right time.
- Buying Derivatives: Short or long term bets can be placed on a variety of properties.
What are the disadvantages of DeFi?
- A variable transaction percentage means that your active trading may be expensive
- In most cases, with a few exceptions, your investment will be quite volatile. The percentage is always moving
- It is necessary for you to produce tax records for legal purposes.
- This area is less regulated at this stage, hence is associated with more risk without a legal guarantee.
DeFi is quite peculiar with its risks and advantages. We, MyGo, even try to help you make better use of various crypto services to avoid related problems as much as possible.
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