De-Fi : A global, open alternative to the current financial system

Decentralized Finance is helping to build up more trust among users. This is achieved by building digital services in a more secure, permissionless & decentralized manner.

Why De-Fi ?

As per the report shared by bitcoin.com , the total value locked(TVL) command in De-Fi is already crossed more than 82% of the $198 billion TVL in De-Fi across all blockchains.

Many banks such as JPMorgan, Morgan Stanley, and Goldman Sachs are offering a bitcoin fund to certain clients.

How De-Fi work?

De-Fi eliminates the need to trust centralized parties and thus makes digital services open, democratic, and permissionless.

Another advantage of removing intermediaries is the possibility of full automatization. Most operations in De-Fi are performed by special computer programs — smart contracts. These smart contracts are stored on a blockchain and cannot be tampered with after they are deployed. This approach greatly reduces transaction costs while providing high levels of security and privacy.

De-Fi is an ecosystem that is based on public blockchains, digital assets (also called tokens) at the asset layer, decentralized applications (DApps), and aggregators.

Benefits of DApps

Because dApps are decentralized, they are free from the control and interference of a single authority. Benefits of dApps include the safeguarding of user privacy, the lack of censorship, and the flexibility of development. It is economizing digital resources, providing ways to monetize what has previously been very difficult to do.

According to a study done by the Blockchain Examiner, the DApps market size is projected to reach USD 21,070.2 million by the end of 2025.

Challenges with DApps

The use of dApps is still in the early stages, and thus it is experimental and prone to certain problems and unknowns. There are questions as to whether the applications will be able to scale effectively, particularly in the event that an app requires significant computations and overloads a network, causing network congestion.

The ability to develop a user-friendly interface is another concern. Most users of apps developed by traditional centralized institutions have an ease-of-use expectation that encourages them to use and interact with the app. Getting people to transition to dApps will require developers to create an end-user experience and level of performance that rivals already popular and established programs.

The challenge of doing code modifications is another limitation of dApps. Once deployed, a dApp will likely need ongoing changes for the purposes of making enhancements or correcting bugs or security risks. According to Ethereum, it can be challenging for developers to make needed updates to dApps because the data and code published to the blockchain are hard to modify