Decentralized Finance (DeFi) started off as a buzzword in the crypto space in 2017. It went on to not just be a buzzword, but a new way of presenting finance to the masses by harnessing the power of blockchain technology.
DeFi aims to make financial practices and processes decentralized, efficient, and transparent by relying on the permissionless innovation of blockchain technology.
The applications of DeFi have been however limited to borrowing and lending of cryptos and other digital assets.
Just recently, another technological innovation broke into the crypto space and the technological space in general. It is the metaverse.
The metaverse is often defined by a lot of people as a digital space where people can interact and socialize with each other through their cartoon-like avatars.
Some of the interactions that are expected to be seen in the metaverse are, holding meetings, playing games, running businesses, buying and selling digital assets, and also taking part in events and other social gatherings in the metaverse.
The integration of both technologies is what is newly regarded as MetaFi in the crypto space. This new concept has stirred up a lot of debates in the crypto space.
With the buzz around DeFi and the Metaverse, and also both of the being innovative technologies, it is has seen as best not to mix these two technologies up.
It is without a doubt that the integration of DeFi in the metaverse is going to be revolutionary for the digital creator economy. But just as a lot of people would love to see that, they will also want to know how feasible the idea or the concept of MetaFi is.
The MetaFi is seen to comprise of products, protocols, and services that help in carrying out complicated financial exchanges between Non Fungible Tokens (NFTs) and fungible tokens or their derivatives.
The connection of NFTs in MetaFi is expected to introduce DeFi principles in the metaverse.
To have a good understanding of the MetaFi, it is important to know how it is structured and what makes up the structure.
The foundation is the first aspect of a MetaFi protocol. It is the building block that often consists of the core frameworks. These frameworks serve as layers zero, one, and two and are also used in building applications.
DeFi, which is the very most important foundation in the MetaFi consists of financial applications available on the core frameworks.
The verses are the final parts in the structure of the MetaFi which are a collection of parallel verses that build the metaverse.
With DeFi and the Metaverse already gaining popularity in the crypto space and the tech space at large, the use of DApps in the metaverse will help in introducing the DeFi principles which will eventually empower the metaverse
