Prominent cryptocurrency exchanges have opened their doors to the new evolution, adding multiple tokens to support the growth of DeFi todayDecentralised Finance (DeFi) is controversially believed to be “the future of the financial system“, as per media resources. With that being said, the system is being coveted much today by crypto enthusiasts.Major financial specialist websites tackled the evolution of DeFi and the projects that adopted it. Prominent cryptocurrency exchanges around the globe have opened their doors broad to the new evolution, adding multiple tokens to support the growth of DeFi today.
Binance, the world’s largest cryptocurrency exchange in market capitalisation, has just added Wrapped Bitcoin (WBTC), a new ERC-20 token pegged to the price of Bitcoin (BTC), on its trading lists. On its end, Coinbase also announced support for COMP, the token of DeFi. ExMarkets – one of the fastest-growing exchanges in the market that proved its position with its clients, demonstrates its commitment to its users on keeping them at the state-of-the-art financial evolution, and hence, favoured adopting DeFi by opening the much-coveted staking pools.
Staking pools, in principle, earn their traders rewards after they have held their coins in a staking pool for a period of time. ExMarkets took the step after analysing the market’s trends well and observed what major financial specialists think about Staking Pools.
- Compound was one of the first DeFi companies to have gained mass attention as their native token COMP registered significantly high heights in value before correcting to current levels.
- DIA (Decentralised Information Asset), a Switzerland-based not-for-profit and open-source blockchain project.
- ORN (Orion Protocol), the first Dynamic Coin Offering (DYCO), which was one of the most oversubscribed sales in 2020.
- Serum, where the leading crypto derivatives exchange FTX announced recently their new DeFi DEX (decentralised exchange) that is supposed to be built of Solana, under the name Serum- the world’s first completely decentralised derivatives exchange.
- Aleph.im– a chat protocol for machines, is being hailed as “one of the hottest newcomers to the DeFi arena”. Aleph is also said to be one of the anticipated partners to co-run the project Serum.
Most prominent uses of DeFi in lines
Borrowing and lending
Open Lending Protocols is one of the most prominent uses of applications that are part of, or dependent on the DeFi ecosystem.Open and decentralised borrowing and lending has many advantages over the traditional credit system in use currently, from the instant settlement of transactions, the ability to guarantee digital assets, to no-credit verification, with the ability to add standards in the future.
Being built on public blockchain networks, these lending services reduce the amount of trust required and ensure verification methods by means of cryptography. Lending markets on blockchains reduce counterparty risks, along with making borrowing and lending cheaper, faster, and within reach to more people.
Cash banking services
As financial apps, cash banking is an obvious use case on the DeFi programmes, capable of issuing stable coins, mortgages, and insurances. Stablecoin is getting more and more focus and tendency to create as the blockchain industry matures more within time.It is a type of digital asset that is usually backed with a real asset but can be transferred digitally and easily. Since cryptocurrency is volatile, stable and decentralized currencies for daily use can be adopted as digital money as well, that is not issued and monitored by a central authority.
Getting a loan is a very expensive and time-consuming process, given the number of brokers that need to be involved. However, using smart contracts can well reduce insurance and legal fees. Blockchain insurance can eliminate the need for intermediaries, in addition to distributing the risk on more people than one individual. The thing that means lower insurance premiums while providing the same quality of service.
Some of DeFi’s most important uses are decentralised trading platforms (DEXes). The aforementioned ones allow users to trade digital assets without the need for a reliable broker (the platform / the exchange) to hold their money. It is then a direct trading relationship between user portfolios using smart contracts.Saying that, this translates into lower trading fees than using centralised platforms as they require much less maintenance.
In a nutshell
Whether you’re a crypto veteran or a novice in the arena and felt extra excited to roll out your sleeves and start dealing with DeFi, our advice to you is to count to thousand before taking any step, That means, you do need a good consultation by the market gurus to know which grounds you will be standing on.There are a few trustworthy exchanges in the market today that have proven themselves as good hubs for DeFi services, and gained the trust of their clients.