- April 23, 2022
- Posted by: Bastion team
- Category: World News
Opinions expressed by Entrepreneur contributors are their own.
Decentralized Finance (DeFi) is an umbrella term for financial products (lending, trading, savings etc.) that don’t require a centralized institution like a bank or exchange broker. Instead, they run on smart contracts, which are automatically executed when certain conditions are met. Users transact directly with each other and maintain control over their assets.
First DeFi apps appeared around 2017, but it was in 2020-2021 that the market really exploded, reaching a valuation of $100B. Apps like Compound, Curve and Uniswap handle billions in volume.
Nevertheless, the DeFi industry is facing some formidable challenges. Perhaps the biggest is connecting fiat (traditional currencies, like USD) and crypto. The general consensus is that DeFi can and should foster the coexistence of both fiat and crypto – but how? This guide explores the most promising solutions.
Providing Bank Lending Services for Both Crypto and Fiat
DeFi can generate a synergy of crypto and fiat by integrating traditional currencies in decentralized financial products. After all, fiat-based banking systems have been the lifeblood of the global economy for as long as there HAS been a global economy. Banking services such as easy lending contribute vastly to the sustainability of the financial sector globally and to the citizens who rely on loans in their…