Hello Friends
Hope the weekend went great for you and is Monday here in India but there can still be Sunday in some countries because of geographical differences.
While I was reading about decentralised finance and in short this is also called DeFi. It's a new form of investment in the cryptocurrency market. It only exists in the cryptocurrency market and its concept is sound. It's good because it encourages investment differently. I mean we can keep control of our coins even after investing in some defi portal. If I do the comparison between this defi and the banking system then there is no similarity instead, both are on different fundamentals.
When we invest in banks then we lose access to funds or we can say lose control. We know that it's ours but we have to follow the rules defined by the bank. For example - if you open a fixed deposit for 1 year then your funds are locked for 1 year and before this period, you can not get it. You can not even make any changes to the plan as the bank does not allow it. You have the option to get the money bank before maturity but in that case Bank will charge some penalty. Even in some cases, they don't pay any interest in case of premature withdrawal. Why would someone invest if they're not getting anything in return while the bank has made money out of it?
Now coming back to the defi thing which is relatively new but impressive. For example, you have 1 BTC and you can deposit this in any DeFi protocol. DeFi platforms are called defi protocol so please don't get confused here. You need to use the non-custodial wallet and there you can keep your coin. You can provide the liquidity in DeFi protocol and you will always have the option to cancel it and even change the pool for any reason and there is no need to ask anyone. Just one transaction is enough to get it done. If it's on the Ethereum blockchain then the even fee will be too less. Here on this defi stuff, I get complete control with more returns, and probably banks can never match it.
Now you say that there is more risk on DeFi which is true in a way but also understand that with higher risk we also get the same probability for returns. It's on both sides so I don't think it's a problem. I don't know how it will be in the future and can't even say DeFi can replace the traditional investment. I see this as a good option and I genuinely expect that this should grow more and if that happens then possibly it can bring more people to the cryptocurrency market.
It's really hard to say if this can replace traditional investment and it's because the cryptocurrency market has not grown much. I can't say anything about the future but if you are in cryptocurrency now then you must be very happy as you are an early adopter.
This is all to discuss in this post and I will try to share more about this in future posts. I like this and will try to bring more insight into the topic.
Thanks for stopping by
Posted Using LeoFinance Alpha
