I tried to explain what DeFi is in comic strips.
I explained what DeFi can do and what the drawback of DeFi is.
The idea of a DeFi is contrary to traditional finance which is decentralized, transparent, pseudonymous, flexible and open to all. It is a financial service that runs on the top of blockchain. The technology helps the financial system run without third parties and it forces the system to become more efficient or it will cost more on participants which will discourage users to anticipate. Of course, when the network is busy, it costs more to use such a service too. The benefits are DeFi will have a transparent, flexible alternative to traditional finance options. Although it may not be the best solution, it is a good way to choose when traditional finance is not only an option for one to use.
Types of DeFi
There are many options including lending, loan, trading, savings, derivatives, gambling and insurance. There will be more to come. It opens other options for users to anticipate and choose from.
Downsides of DeFi
As the crypto market is fluctuating, the cost for people to anticipate can be steep. The Ethereum blockchain is also very expensive to use when the network is busy. For many people to join with limited resources, it can be difficult for them to join.
What Are Missing
There are more details on how DeFi can be used and other aspects on how DeFi can be utilized. It is also possible that DeFi runs on the Bitcoin blockchain that is coming. There are many more possibilities to come in DeFi and makes financial services more accessible.
Of course, DeFi has lots of scams too. Bad characters are trying to lure beginners and take away their investments. Therefore, to be able to use DeFi, you may require extensive study and comprehensive knowledge about the technology behind the DeFi.
DeFi is one of the future. It gives an option for people to use without a high bar to screen out the opportunities in traditional finance.
Check out my another article Crypto Comics – What is Token