How One DeFi Project Changes Everything?
Decentralized finance, or DeFi or Open Finance for short, is built on blockchain networks where all the traditional financial services we use today (deposits, loans, trade, insurance, and more) are accessible worldwide by anyone with an internet connection, computer or smartphone. express the financial applications ecosystem.
Defi is not really a revolution, even if it sounds too good to be true when you read the definition and makes you think that this is an alternative revolution to banking. DeFi is an evolution of the consequences of the new world order. In my undergraduate education on International Relations, I graduated in 2014 at a time when the world ruling empires, international balance of power and bipolar system and the east-west poles disintegrated and then the walls collapsed, multinational companies took the role of states as actors and rapid money-fast capital reached the fastest point. i had been A lot has changed since 2014 and we first said “Farewell” to the unipolar world, then we saw a period in which every country and troops rebuilt their walls with trade wars.
Today, we are experiencing a new and important development that could be the beginning of a new enlightenment era. There is a transition to decentralized models that are centrally modeled in all areas of both our individual and social lives. In this age of the world, we go in all directions at the same time. We are decentralized. Of course, we need decentralized finance in this decentralized world.
In traditional financial structures that we are still subject to, currencies are controlled by Central Banks. In this system, we need banks and financial intermediaries to use our money. Besides not having control, we also have to pay extra money for the service. With blockchain technology, all transactions in DeFi projects are transparent, secure and traceable. The control of the money and the system is in the DeFi project. Defi projects are used in many areas such as cross-border money transfer, loan solutions or tokenization. With everyone being integrated into the system, DeFis are built on a fully distributed system. In these fully distributed systems, there is no hierarchy, chairman, father, chairman of the board. When all the participants are of the same value, the rules of commerce, creativity and society change. Defi plays a role both as a result and as a cause of the social situation. DeFi is an alternative for people who do not have access to financial systems, as well as people who do not trust the banking and financial sector, who suffered major losses in the 2008 Crisis.
Decentralized finance aims to increase financial security and transparency, uncover liquidity and growth opportunities, and support an integrated and standardized economic system. It leverages the basic principles of the Ethereum blockchain for its goals. This explains why Ethereum rose to the 42nd place among many global companies with a market value of $ 233 billion. While funding for DeFi projects in the second quarter of 2020 was at the level of $ 1 billion, it has now reached $ 43.5 billion. Such a serious increase in a year shows how fast and inevitable the adaptation process and demand for DeFi projects are. We understand that the interest of the society is increasing day by day to provide DeFi-based loan withdrawal / lending, deposit and return on deposits.
The main purpose of this ecosystem, which aims to carry out transactions without a central authority, is to ensure that everyone who owns a digital wallet has the right to benefit from these opportunities. In the classical financial ecosystem, you have to overcome many bureaucratic steps in order to benefit from certain services. Signatures, forms, commitments, etc. The new generation finance is open to anyone with a digital wallet and internet connection. It continues to serve by growing day by day.
As listed on Defi Pulsa, currently the largest DeFi application is the MakerDAO project founded by Rune Christensen. To talk about other major DeFi projects and their distinctive features;
Aave, Compound, Maker; It ensures that passive income is obtained from your assets with certain interest rates and that you can borrow by showing the assets as collateral. Maker and Compound define their owners voting rights with management tokens. In this way, for every change to be made on the platform, this situation has been taken under control with an environment where everyone with a management token can vote.
TokenSets provide buying / selling through smart contracts against certain commissions, without entrusting the asset to another person.
Kyber, Uniswap, dYdX, You can perform clearing transactions via blockchain by connecting directly with your wallet without entrusting your assets to an exchange.
Our national pride, Avalanche, is suitable for partially ordered applications such as payments or asset transfers with the goal of keeping the DeFi ecosystem on itself. Although Avalanche’s decentralized exchange, Pangolin, was opened 10 days ago, it reached a daily transaction volume of $ 36 million in liquid assets of $ 250 million.
It is not risk-free to carry out all these transactions and many other financial transactions through Defi applications. We will only be able to see the vulnerabilities of the applications by living. It is obvious that every newborn project will experience similar problems. DeFi is growing day by day and progressing with parts that complement each other.
Being a part of researching blockchain studies, DeFi projects, cryptocurrencies does not mean finding the right thing, because there is no such thing. The point is to select and create the project that best serves our purpose, the context ahead, the values we have and our goals. As the context, values and goals of humanity are constantly evolving, the way we envision the economy and projects has to change with each passing day.
What we can and must do today is to bring together the best of the ideas that emerge and thus create a new economic mindset that is constantly evolving rather than never ending. I think that we will reach our desired place not with a single Defi project, not with a single crypto currency , but with the formation of tens of millions of blockchain technologies, proving their old age and proving their interoperability. Come join this crew!