What is DeFi?
Although DeFi has actually added popularity to its popularity recently, it has actually been in the crypto money market since almost 2020 and has been frequently mentioned in the rise and name for itself since then.
It is the name given to the decentralized financial system, which does not belong to any decentralized organization and is completely digital. In the system where DeFi wants to give, it is actually the banking system we all know. Just as the services provided in banks are connected to a center, DeFi wants to provide this service without being tied to any center. If we continue by citing the banking system as an example; Just as we can withdraw loans from banks or put our money in deposit returns, we can do this in the DeFi protocol system, we can take out loans and put our money in interest.
Unfortunately, many people around the world still have many difficulties in accessing the Banks that play the largest role in the financial system. Thanks to DeFi, this situation will be almost completely eliminated and it will provide easy access to financial systems and tools only through digital and internet connections. In fact, when I think that each person becomes his own financial institution from this point of view, he is not thinking very wrong. Thanks to the developing technology and products, as well as the interest in the crypto world, which is increasing in popularity day by day, another advantage that Defi will provide to us is fast access, fast transfer and easy transportation. In other words, regardless of the day, time or location, DeFi will be able to make transfers of crypto assets faster than what is being done today by making banks intermediaries by using the internet connection.
What are the Advantages and Disadvantages of the DeFi System?
When we consider the fees received through credit transactions or transfer transactions made through banks, another advantage offered to us by centralized finance is that these paid amounts are in a more appropriate reasonable situation. Of course, this is not a situation that DeFi can stand up to the banking system alone. As we mentioned the advantages, there are also disadvantages. Since the crypto money world has high volume and volatility, sudden fluctuations in prices may occur from time to time. For example, a person may face a loss because an asset he holds in a stake is locked during the decline and he cannot sell it. Another disadvantage is that the number of users is small.
It is a market that has not yet matured and is in the period of development. Another disadvantage is that illegally obtained revenues can be illegally laundered through DeFi. There is another situation that makes many investors think because there is no control against fraudsters and misuse of money.
As a result, regardless of the situation now, DeFi has been increasing its popularity day by day in the period from the past to the present and shows that its future is bright. Thanks to its beautiful sides and easy transportation, it continues to attract the attention of many people and shows that it will continue to do so day by day. When asked whether it can be the financial system of the future, it is thought that it can take its lack of supervision and in the long run if improvements or different steps are taken in case of misuse of money. Of course, all these are thoughts and interpretations.