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DeFi, which stands for Decentralized Finance, is a growing sector in the world of finance. It refers to financial applications that are built on top of blockchain technology, and it offers a number of advantages over traditional finance. DeFi is still in its early days, but it is quickly gaining traction and there is no doubt that it will continue to grow in the years ahead.
Decentralised Finance (DeFi) will continue to grow driven by innovations in automated market-making and other liquidity-providing solutions leading to attractive yields on cryptocurrencies, according to Swapnil Pawar, Founder at blockchain startup ASQI told Financial Express Online. Moreover, with the emergence of platforms like Olympus decentralized autonomous organization (DAO) and subsequent forks like Wonderland, a new DeFi commonly known DeFi 2.0 is likely to gain momentum. Read more
In a decentralized finance world, counterparties can create products and instruments without the need for a third party. While this may sound like a positive development, it has led to the creation of complex and innovative derivatives products that are difficult to understand and trade.
“Complex derivative products and innovative financial instruments are being created daily. Early participants are being rewarded with returns in the 1000s of percentage Moreover, with the DeFi 2.0, institutions can no longer ignore the returns and would look for safe methods to participate in the wild west of crypto,”
The growth of new technologies in the finance world is a testament to how dramatically the industry has changed over time. One area that this change has been felt most keenly is with Decentralized Finance, which brings new opportunities for investment but also more risks if they’re not properly understood and managed.
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