Decentralized finance has been hailed as a revolutionary system that is borderless, secure, and empowers people to interact together without the middlemen using cryptocurrency and smart contracts as its backbone. There are many benefits to using DeFi as it ushers forth major leaps forward in transaction security and clarity (among many other benefits).
DeFi has been called ‘borderless’ as it allows investors to transfer capital in the form of cryptocurrency around the globe with speed and peace of mind. DeFi uses cryptocurrency to allow users to execute transactions in an instant while they are on the go, a million miles away, or across the coffee table from the other party.
DeFi usessmart contracts which not only track transactions and provide immutable records but they also immediately execute agreements so as to allow the parties to the transaction to be immediately certain of the outcome, avoiding the time and effort loss that comes with the involvement of third parties. Records of each transaction and the transaction tables themselves are stored across each computer/member on the blockchain and each computer has a say in whether conditions are met to allow a transaction to proceed or not.
Due to its speed and accuracy (transactions and records are tamper-proof), the blockchain avoids the concern for specific malicious spending attacks such as “double spending” attacks which cause one party to spend their capital twice due to the malicious intent of the other party to the transaction.
Whether you are looking to transfer AVAX to USD or just to integrate your crypto wallet from one exchange into the next, DeFi protocols have you covered. DeFi protocols and its accompanying applications (and those designed to run on the blockchain) have left issues with inoperability behind. Ethereumblockchain backbone allows applications built on the stack to be interoperable across a multitude of networks allowing new investors and veteran investors the ability to seamlessly move and carry their crypto tokens with them using sophisticated tamper-proof technology.
Decentralized finance was built with security and transparency in mind while also avoiding cumbersome interactions with third-party and centralized systems. Transaction data is broadcast to every single node on the blockchain. On the Ethereumblockchain, anonymity is preserved through the use of pseudo-anonymous encrypted keys that match specific nodes and transactions.
Transactions can be quickly and easily analyzed using decentralized finance with speed and accuracy which is very different from centralized bank systems of the past. What used to take months and quite a bit of manpower now may take only hours and one or two forensic accountants.
Unlike its predecessor financial systems, decentralized finance guarantees permissionless access. Anyone with a crypto wallet can access the network and begin to generate transactions. Gone are the limits of minimum required funds and maintaining residence in a specific country or locale. Decentralized finance truly is an open solution to a borderless world.
DeFi market participants always maintain control and security over their own assets using self-custody. With the creation and advent of Web3 wallets, crypto traders no longer have to worry so much about their wallets falling into the hands of malicious hackers, social engineering experts, or technology that has the potential to fail without redundant backups of transaction records.
Begin to build your crypto portfolio today with FTX. Join millions of DeFi users worldwide who are purchasing and enjoying all the benefits the move to DeFi smart contracts has to offer. Trade securely and fast anywhere you are.