Decentralized Finance is setting the internet ablaze with its launch. They have ignited a mirage of contents and conversations about their business which have either got people to hate them or to love them. Since the turn of 2020, the selection of DeFi has gone up seriously with DeFi accumulating a total value of over 1 billion dollars.
By the January of 2021, DeFi has clocked a total value of 20 billion dollars which is over 20 times its growth in the last year. However, not everyone knows much about DeFi and even those who do know only surface level. However, there’s more to what DeFi offers than to intensify financial inclusion. In this article, we’re going to talk about the full knowledge of opportunities Defi offers and what entrepreneurs stand to gain by choosing DeFi.
Ignorance will not serve as an excuse for those entrepreneurs who do not take advantage of DeFi. They will not enjoy the value of its different offerings and the knowledge of its top uses.
Opportunities Entrepreneurs can benefit from DeFi
Financial transactions free of middlemen
DeFi uses a distributed ledger technology to remove the need for an intermediary in your financial transaction. These intermediaries are replaced with smart contracts which enable payments and peer to peer transactions. This peer-to-peer transaction opens the way for entrepreneurs so they do not deal with border payments anymore.
With their new model structure, DeFi has created a model for innovation and entrepreneurship. Thanks to DeFi’s model, financial services for those without banks is unlocked. This is a huge deal because 1.7 billion people do not have any financial account with any institution according to statistics from Bitcoin System.
Provide loans without guarantees
With its distributed ledger transaction, traditional financial services have issues with DeFi because their services allow them to offer more to loan collectors. People who do not naturally qualify from a traditional bank can receive a loan from different DeFi investors.
DeFi’s borrowing system is easy if you do it through TrustToken, a platform used to develop tokens backed by assets which you can easily sell or buy. Through its TrueFi system, people can borrow funds without having their crypto account locked as collateral. With this system, crypto users can enjoy nice return rates as they grant borrowers free loan without collecting collateral.
Special digital identity for transaction
People who do not own bank accounts find it hard to make a financial transaction because they lack the necessary documentation required and this limits their freedom and opportunity to grow. This problem is one of the issues solved by DeFi.
Digital identities are one of the important DeFi components. This does not come from any of your social media profiles or presence. Instead, it is an identity that linked to your device’s IP and is tiedto a unique username and password. Owning such digital identities would enable many businesses to find a way to use these identities and understand DeFi. The growth in the use of this form of payment would become essential as many companies in the industry try to emancipate themselves from fraud.
Theft and fraud have become rampant with theft hitting a 40% increase since 2016. With such records, DeFi enables the use of security bots that provide real-time verification and identification of businesses and their users. With this bot, you can confirm the legitimacy of any entity with whom you want to do business.
DeFi is leaning towards mainstream ideas and businessmen and women need to start getting DeFi coins to enjoy the big break. It is one of the biggest innovations in blockchain and is recognised for its ability to revolutionize the financial industry. This is the time for everyone to means to capitalize on DeFi.