Decentralized Finance (DeFi) has become a revolutionary force for cryptocurrency and attracts lots of people into the space. It allows users to bypass hefty fees and lend out their currency while earning interest off the assets they hold. The influx of DeFi projects reflects how far the DeFi revolution can progress - disrupting traditional lending practices and bringing power back to consumers.
We will explain what the DeFi revolution is, its transformative solutions, and the 10 best platforms paving the way for a global non-intermediary financial environment.
What is the DeFi revolution exactly?
DeFi is a vast industry with different applications and products such as derivatives, DEXs (Decentralized Exchanges), lending, and payments - all based on smart contracts, aiming to remove intermediaries facilitating financial services and systems.
The total value (TVL) of all ETH and ERC-20 tokens locked in smart contracts has grown to over $105 billion. A meteoric rise.
DeFi's success is in a way forcing legacy financial institutions to accept its transformative potential. Arthur Cheong, founder of Asia’s largest DeFi focused crypto fund, DeFiance Capital believes “DeFi will eat traditional finance during the next decade”. In June this year, Andreessen Horowitz announced its $2.2 billion Crypto Fund III. One of the largest commitments to the crypto ecosystem in history.
Existing CeFi (Centralized Finance - e.g. banks) operations are focused on instruments like cash flow, supply chain finance, and liquidity — all areas improvable by embracing blockchain technology. CeFi transactions remain the same - cumbersome. Now DeFi provides them an opportunity to innovate. This is something many CEOs can't afford to ignore and miss out on.
What makes DeFi so transformative is how it challenges the finance status quo. DeFi offers a different approach to finance as opposed to the plug-in model presented by CeFi.
An innovative approach providing a different perspective to centralized institutions, DeFi presents new opportunities by offering alternatives to established financial services.
What does DeFi solve?
The DeFi revolution is a reaction against the self-serving agendas of centralized institutions which sought to make themselves stronger in times of crisis. The decentralized economy emphasizes individual freedom and responsibility for one's success.
In the wake of recent economic turmoil, many people are looking for new ways to preserve their wealth and grow it.
The DeFi revolution is based on smart contract functionality and was developed to progress the narrative of Bitcoin envisioned as an efficient, democratic alternative to TradFi. DeFi complements aspects of Bitcoin like democratizing finance for all people instead of just those with access or income.
DeFi provides individuals the option to take control of their financial destiny and relieve themselves from dependency on banks or other economic forces.
10 Best Platforms leading the DeFi Revolution
Uniswap ($UNI)
A decentralized cryptocurrency exchange (DEX) introduced in 2018, Uniswap was developed on the Ethereum Network. Unlike other exchanges, Uniswap charges near-zero fees. Users have more control of their funds, and Uniswap's smart contract exchange enables token swaps and allows the addition of any ERC-20 tokens to the exchange.
Compound ($COMP)
A DeFi lending platform modeled on the Ethereum blockchain. While the smart contracts are built on the Ethereum Network, the platform itself is an open-source marketplace. Users can also deposit and trade with different cryptocurrency tokens such as DAI, USDC, and ETH and access liquidity pools and earn interest.
Synthetix ($SNX)
A unique DeFi lending platform focused on tokenizing and issuing real-world assets like gold, stocks, and fiat currencies.
The platform uses an ERC-20 smart contract to introduce the non-blockchain world to the cryptocurrency ecosystem. Synthetic assets are financial instruments in the form of ERC-20 smart contracts known as “Synths” that track and provide the returns of another asset without requiring you to hold that asset.
Aave ($AAVE)
Aave is a complete DeFi ecosystem complete with a decentralized marketplace facilitating the borrowing and lending of digital assets. Aave is an open-source, non-custodial decentralized lending protocol that mirrors the services of traditional banks via smart contracts to ensure borrowers and lenders have access to a wide range of digital assets and interoperability with several DeFi platforms.
Curve Finance ($CRV)
Curve Finance is a decentralized crypto exchange allowing users to swap Ethereum tokens using a market-making algorithm that automatically trades tokens based on their price spread to offer much-needed liquidity to the DeFi market.
MakerDAO ($MKR)
Among the pioneers of the DeFi industry, MakerDAO is a lending platform designed to offer price stability and provide easier options for its users to develop a collateralized debt position on the network. At its core, MakerDAO operates like a credit facility issuing loans with specific interest rates. It issues the $DAI stabelcoin and facilitates collateral-backed loans without an intermediary.
Yearn Finance ($YFI)
Yearn Finance is a group of Ethereum based DeFi aggregated lending and borrowing protocols that utilize a product-first approach to yield farming for revenue income. Yearn switches automatically between different DeFi protocols to maximize its users' profits and provides autonomous services enabling passive income.
PancakeSwap ($CAKE)
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PancakeSwap is a Binance Smart Chain (BSC) based DEX, enabling blockchain developers to launch crypto projects, stake their assets, and exchange their tokens. The platform employs automated market-making services for decentralized exchange swapping of BEP-20 tokens.
InstaDapp ($INST)
InstaDapp is a trustless DeFi smart wallet which allows users to monitor and optimize their assets while receiving the highest returns. InstaDapp allows people to oversee their portfolio across platforms like Compound and Uniswap, acting as a bridge connecting several decentralized protocols.
Relite Finance ($RELI)
Relite Finance is an interoperable and decentralized, cross-chain lending protocol built on Polkadot ($DOT). Relite's protocol enables native ERC-20 and Bitcoin assets to exist in a single ecosystem. Relite has a reserve fund designed to ensure a better collateral ratio and provide a safety cushion during high market volatility.
Our Verdict on the DeFi Revolution
A new age of financial access is upon us. Cryptocurrency promises to make money and payments universally accessible – but it won't stop there.
The Decentralized Finance movement is an open, global alternative to every financial service existing today.
Imagine a world where users can access any financial service anywhere in the globe. The DeFi revolution takes this promise one step further and makes it accessible for anyone worldwide.
Frequently Asked Questions (FAQs)
What is a DeFi revolution? The DeFi revolution aims to empower and provide access for all users of decentralized financial platforms. By encouraging self-sustainability, this new breed of finance fosters individual freedom from traditional institutions while promoting an escape velocity away from the old systems of traditional finance.
Will DeFi replace banks? The potential for DeFi to replace many banking services is undeniable. With the pace of progress and development, it's become one of the newest frontiers in finance--a frontier that will require significant improvement, but with each step forward comes new opportunities!
How do I get DeFi crypto? There are several ways to get involved in DeFi. CEXs and DEXs offer several DeFi tokens and services to get involved. Sites like DeFi Pulse and DeFi Llama provide comprehensive breakdowns of the DeFi economy.
What are the best DeFi to invest in? Our article shares some of the best DeFi platforms leading the DeFi revolution. They're among the most prominent protocols and projects in DeFi and are a great place to start.
$RELI Uniswap contract address: 0x0E58ED58E150dba5fd8e5D4A49F54C7e1E880124
Note: Please be aware that the only contract address for RELI is that stated above. There will be fraudulent versions of RELI. If in doubt, please ask an admin in the Relite Community.
Note: Please be aware that the only contract address for RELI is that stated above. There will be fraudulent versions of RELI. If in doubt, please ask an admin in the Relite Community.
Stay tuned via Relite’s social media to learn more about what’s to come.
