Potential Impacts of Decentralized Finance
- Global access to financial services
With decentralized finance, anyone with an internet connection and smartphone can access various financial services that were previously constrained by the system:
Status: no restrictions on nationality, documentation
Wealth: A sufficiently high limit to access financial services
Location: Long distances between economic activities and financial service providers.
- Affordable Cross-Border Payments
Decentralized finance removes expensive middlemen and makes remittances cheaper across the globe.
In the current system, it is very expensive to send money between countries with an average remittance fee of around 7%. Through decentralized finance services, remittance fees can be reduced to below 3%.
A Good privacy and security
In decentralized finance, users who have direct access to their accounts (= wealth) and can carry out transactions safely without validation from the central authority (e.g. banks).
Censorship resistant transactions
In a decentralized system, transactions are immutable and the blockchain cannot be closed by governments, central banks or large companies.
In many cases, decentralized finance makes certain types of transactions easier when compared to the complexity of a centralized system for similar services.
So, do you interest about DeFi?