Can Decentralized Finance Become the Future’s New Digital Economy ?
2021年9月26日 - 1:49AM
NEWSBTC
Over the past two years, DeFi has perhaps become the most striking
event in cryptocurrency reality. The rise of this new star is
closely tied to Ethereum, the second-largest cryptocurrency network
by market capitalization, on top of which almost every existing
DeFi application runs. The fact of the matter is, Ethereum is not
only a digital asset that allows you to make transfers on the
blockchain network but also an entire ecosystem within which you
can provide services and perform more complex tasks, such as
writing smart contracts. It was these two functions that became the
foundation for the emergence of the DeFi phenomenon, which
ultimately became something of a spontaneous market response to the
request for freedom of financial services and their equal provision
to any participant in the ecosystem, regardless of the social
status and geographic location. Over the past year, the
capitalization of the DeFi market has grown by almost 60 times
reaching a height of $130 billion, and the total value of user
deposits (total value locked, TVL) has grown about 100 times,
reaching roughly $100 billion. Many analysts predicted the industry
to have the quickest decline in history, but DeFi withstood every
problem it faced thanks to its underlying network. Being overloaded
with transactions allowed for a general correction in the
cryptocurrency market, which brought down the cost of the first
cryptocurrency and along with it, the rest of the crypto assets in
the spring and summer of 2021. Despite all the negative events,
DeFi continued to grow. What was the fundamental driving force
behind this growth? The art of cutting off obstacles The coolest
feature of DeFi is the elimination of middlemen from its financial
processes. In CeFi (centralized finance), the transaction’s
confidence is provided by an intermediary: a bank, a stock
exchange, a brokerage office, a settlement center, etc. The
intermediary typically performs important functions for the economy
such as storage and movement of funds, as well as lending to
individuals and organizations. Everyone is more or less familiar
with the shortcomings of these organizations: due to their complex
and demanding structure, they exclude more than a billion
inhabitants of the planet from economic life, and the high
commissions they charge customers guarantee neither a quick nor a
trouble-free transaction. Often transactions, especially
international ones, may be delayed for no apparent reason, and some
of them may be regarded as suspicious. All this leaves the feeling
that your money does not belong to you, it’s as if someone is
disposing of your funds at his own discretion. This situation,
however, has greatly changed thanks to blockchain — a transaction
register protected from unauthorized access, distributed among
users, and belonging to everyone and no one in particular at the
same time. Due to its decentralization, a common transaction log
serves as a general source of truth for all network participants.
And if some network participants are motivated to give their free
funds to others, while others take these funds as a loan from a
bank, then there is no need for an intermediary: the role of the
trusted party is played by the blockchain itself, and a
self-executing smart contract guarantees the fulfillment of the
conditions. The same applies to any other economic interactions —
insurance, the issuance of stable assets backed by currencies or
individual advantages of protocols, and even the sale of unique
works of art in the form of NFT tokens. The uniqueness of DeFi lies
in the fact that the users of decentralized applications (DApps)
get rid of not only financial intermediaries from the real world
but also centralized crypto platforms that require them to verify
their identity with the personal information disclosure, which
essentially violates one of the basic principles of
cryptocurrencies — anonymity. DeFi, with its decentralized
exchanges (DEXs), allows its users to trade without having to go
through identity verification, interference of anti-money
laundering regulations, or any other restrictions that centralized
exchanges were forced to impose. DeFi is more than fintech. Most
fintech projects are a digital shell that wraps up old systemic
phenomena. DeFi, on the other hand, functions on a completely new
basis as it gives total independence to people when it comes to
choosing a path in the financial world. Of course, DeFi still faces
problems. For example, the congestion of the Ethereum core network
with the popularity of DeFi itself leads to the birth of too many
transactions, which then results in higher fees. On top of that,
many applications still have awkward, clumsy user interfaces. As
such, DeFi can be considered as a simple local phenomenon, which
only people from the crypto world or those well versed in technical
nuances can enter. Because DeFi is still difficult for those who
are far from being tech geniuses. These are important problems that
need to be addressed, and whoever overcomes these obstacles will
emerge victorious. How the LocalTrade ecosystem solves the pressing
problems of DeFi In fact, despite the explosive growth, DeFi is
still beyond the attention of most financial market participants.
This will undoubtedly change soon thanks to the LocalTrade platform
— a universal cryptocurrency exchange and an ecosystem of financial
products that aims to bridge the gap between traditional finance
and the cryptocurrency industry. The LocalTrade ecosystem includes
a full-fledged centralized trading platform and a decentralized
financial platform for investments named DeFi Lab. Combining the
experience and powerful technical infrastructure of CeFi with the
capabilities of DeFi, LocalTrade attracts traders and investors
from fields. If they wish, they can join the world of decentralized
finance just as easily as they would be dealing with traditional
financial products that they understand. LocalTrade intends to
become the first platform that will allow everyone, even those who
have only a fiat bank card and $10 in their account, to get
unhindered access to the most profitable DeFi and CeFi products.
How is this possible? Using the capabilities of CEX, LocalTrade
simultaneously simplifies the process of investing in DeFi products
and makes this investment safer. This part of the LocalTrade
ecosystem is called DeFi Lab, and it includes components such as
NeoBroker smart-fund, DeFi Wallet, a Launchpad for crowdfunding, as
well as last year’s trend — yield farming, and even more.
LocalTrade’s products are absolutely unique, so let’s briefly
describe the essence of the innovative functions that you can
access in the updated LocalTrade platform. LocalTrade’s DeFi Tools
LocalTrade’s DeFi Wallet is not your everyday wallet, but rather a
product that will allow you to promote DeFi and make it mainstream.
This is a smart multi-currency wallet for mobile devices with an
intuitive interface, completely private and confidential with 100%
storage of information locally on the user’s device, full data
encryption, 2FA, and biometric authentication for increased
security. You can set up commissions in the wallet, but its killer
feature is the ability to exchange assets from different
blockchains within the same application. This specific option makes
DeFi Wallet the world’s first decentralized crypto wallet with a
cross-chain exchange functionality. LocalTrade’s DeFi Lab is a set
of special digital tools tailored for investments and are
classified by categories based on their risk factor. DeFi Lab is
designed to meet users’ needs and is available to all retail
investors. These tools are available for investors with different
levels of DeFi knowledge, ranging from pros to newbies. NeoBroker
Smart Fund allows users to invest in company shares before their
initial public offering( pre-IPO), thus becoming a co-owner of such
companies. Yield Farming Protocol offers users high APY rates for
their assets, which will be used to mine liquidity via a variety of
DeFi projects. Token Sale Investpool is a solution that allows
users to purchase tokens from crypto projects that are currently on
the pre-sale/ICO stage in order to get enhanced returns. LocalTrade
Launchpad is a tool for more sophisticated investors, aimed at
supporting and promoting cryptocurrency projects, as well as
allowing the investors to purchase tokens during IDO, at the lowest
price possible. All projects hosted by LocalTrade’s DeFi Lab
undergo strict verification and audit of smart contracts to
identify potential risks and thus prevent users from investing in
intentionally fraudulent projects. There is also an opportunity to
earn money on the platform using the LocalTrade token (LTT), which
is a BEP-20 standard token issued on the Binance Smart Chain. The
LTT token combines utility and governance functionalities, powering
the entire LocalTrade ecosystem. As a link between the LocalTrade
CEX and DeFi platforms, LTT includes a unique token model and is
used in various cases on the platform. There are several ways to
earn money with LTT: Staking, through which users join the DAO
Sharing Economy and can participate in the management of the
platform. Receiving remuneration for attracting new participants.
Adding LTT to liquidity pools and receiving rewards for farming.
The LocalTrade VISA card & The NeoBank application are other
LocalTrade products that allow you to use crypto whilst still
enjoying the full convenience of fiat money. The card instantly
converts cryptocurrency into fiat, after which you can pay for any
purchases. At the same time, cashback in LTT tokens is paid for
using the card. In addition, the card allows you to withdraw cash
at any ATM. Conclusion If bitcoin was the spark for the financial
services’ revolution, then DeFi was the catalyst for this process.
Companies that bring DeFi into the mainstream are doing a huge
service not only to the world of technology but also to the entire
human society. This is exactly the task that LocalTrade has taken
upon itself, providing its users with a full set of tools that will
allow them to enter the world of DeFi as smoothly as possible. On
the platform, LocalTrade conducts step-by-step training in
mastering DeFi within the framework of its university. After
graduating, students will not only have a clear understanding of
DeFi, but also of traditional financial instruments and investing
in general.
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