In the article “What is DeFi? How DeFi can change the financial world?”, we already know about the definition of DeFi and why it’s been adopted and become the revolution of the financial world.
In this article, let’s find out with FinFan some cases of applying DeFi in life.
The emergence of blockchain technology has paved the way for decentralized lending platforms that connect lenders directly with borrowers, eliminating the need for intermediaries. Peer-to-peer lending allows individuals to lend or borrow funds without relying on banks or financial institutions.
Smart contracts play a crucial role in facilitating secure and transparent transactions in decentralized lending. These self-executing contracts ensure that both parties fulfill their obligations without the need for a third party's involvement.
Decentralized finance (DeFi) has further expanded the possibilities of decentralized lending and borrowing by offering a wide range of financial services such as stablecoin loans, yield farming, and liquidity pooling.
By embracing decentralized lending and borrowing, individuals have greater control over their finances while enjoying lower fees, faster transactions, and increased accessibility. This transformative approach holds immense potential to reshape the future of finance as we know it.
With its decentralized nature, loan transactions will take place more safely and transparently when no third party can access or steal both parties' information to commit other fraudulent acts on the Internet.
Borrowers and their relatives will not be bothered or constantly mentally tortured, leaving them in a status of confusion and fear.
On the contrary, the lender also does not have to waste time collecting monthly debt payments because before receiving the loan, the borrower had to over-collateralize one of their crypto assets to receive the loan. get a loan. If the borrower fails to repay that loan, they will have to accept the loss of the crypto assets they previously pledged.
In general, over-collateralization ensures the lender has a margin of safety. More importantly, borrowers do not need a credit score to access crypto loans, unlike traditional bank loans. This means that crypto lending is more accessible to people with poor credit scores and no credit history or to self-employed people who find it difficult to meet the lending requirements. Traditional loans are more stringent.
DeFi lending platforms have revolutionized the way individuals and institutions borrow and lend digital assets. In this section, we will explore some of the most popular DeFi lending platforms currently dominating the market.
These are just a few examples of the popular DeFi lending platforms available today. Each platform offers unique features and benefits, catering to different needs within the crypto community. As the DeFi space continues to evolve, these platforms are likely to play an increasingly vital role in reshaping traditional financial systems with decentralized alternatives.