DeFi also known as Decentralized Finance indicates a decentralized Finance system.
In other words, a new movement that exploits decentralized computer networks in order to transform various types of financial products into systems with transparent and secure protocols that can operate without the intervention of any intermediary. Decentralized finance is a new financial system based on blockchain and which does not provide for a centralized control body, as for example happens for FIAT coins, which are controlled by the relevant Central Banks.
Decentralized finance: what is it for
The DeFi or decentralized finance system has its foundation on the use of smart, IT systems and usually based on a public blockchain. In this case, therefore, autonomous organizations arise that respond exclusively to the computer and mathematical rules that are set by programmers. Decentralized and non-intermediated financial companies can be used to manage different financial systems. For example, DeFi is used for managing exchange decentralized, for derivatives, for DAOs, for the management of various digital assets, to tokenize real assets, for insurance, for staking. With DeFi it is also possible to do trading operations on cryptocurrencies, obtain loans or lend your crypto-assets in exchange for interest.
How DeFi works
DeFi has two fundamental characteristics: smart contracts and the use of decentralized networks. The former serve to carry out processes in an automatic, safe and predictable way. The use of decentralized networks, on the other hand, makes all this functioning public, open, transparent and secure. With the use of decentralized applications there is no need to have intermediaries or brokers. Users manage funds freely and through the use of secure blockchains.
The services that are distributed using blockchain technology are safe and impartial. As, all data is recorded and subsequently distributed in thousands of nodes. In this way, any censorship or suspension of a financial service becomes difficult if not impossible.
Another feature of DeFi is that it presents itself as a highly valued tool by investors. As it allows free and secure access to these services even to those who could not do so by operating in the traditional way with the various intermediaries. In short, with the decentralized finance system it is possible to allow even those with lower funds to operate and exploit the various financial products.
Is DeFi Safe?
Many wonder if DeFi is financially safe. Unfortunately, its security in terms of data protection, keys and information is not mirrored by that of the user's investment. In fact, this is not a regulated market, so the user who chooses to invest has 100% responsibility for the correct use or not of this instrument. In addition to the financial risks, it is also necessary to consider how navigation and user experience are not yet simple and suitable for all investors.
DEFI Projects and Token List
Here is the list of some DEFI projects, they are divided into Payment projects, infrastructures, stablecoins, insurance, custodial, investment, loans, derivatives and real exchanges