Think of everything you can do today from a financial point of view, and you already have what you can do with decentralized finance.
Only the way to do it will be different.
Among other things we can do the following:
Send and send money anywhere in the world
Within the DeFi blockchain, currently dominated by Ethereum, it is possible to make all kinds of transactions with any other address in the system, that is, we can make and receive payments with any participant in the world under the same conditions regardless of where they are.
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This feature clearly teaches us that DeFi is made to unify the world, something that could only truly be achieved digitally.
The only thing necessary to be able to make these transactions is a wallet or purse.
Borrow money
Here we have one of the classic and most important functions of the traditional financial world. A function that has been lacking for a lifetime and for which banks have been mostly used, but also loans between friends or family.
With DeFi it is no longer necessary to go to a bank but we can go anonymously to borrow in decentralized markets, which we can do “directly” with the “peer to peer” (P2P) or through the pools of liquidity that We can find it on various platforms.
In this way, we can go to one of these markets and get a loan.
But who is going to lend us without knowing us and without collateral?
Here comes the difficult part, because the truth is the first thing that comes to mind.This is solved with the need to present collateral, that is, a kind of guarantee. In such a way that if we do not make the payment, the lender will liquidate it and will take possession of the tokens, which can be from cryptos to some NFT.
This is so at the moment, but I think that in order to function fully well there should be some way of knowing the credit quality of potential borrowers. That of lending without knowing who you have on the other side complicates the process quite a bit and hence the need for a guarantee.
Not to mention the possible scam attempts, something that those who are developing the matter want to eliminate with the creation of a unique digital identity, Uniswap clone script
Among the advantages of borrowing in DeFi markets we have:
*Access to global liquidity
*Privacy in the transaction (which comes with its “but” as I just commented)
*Instant Loans (Flash Loans), used in crypto trading and exchange operations
Borrow money
Wow, decentralized finance also gives us the opportunity to be loan sharks and make money by lending what we have saved.The usurer thing is a joke. Here no one is being forced to take a loan that they do not want. If something characterizes this market, it is its transparency.
With DeFi, instead of putting our money in banks and looking for a deposit or product with interest, we do it by lending money directly, since there are many projects looking for short, medium or long-term financing.Due to the dynamism and volatility of the DeFi market, interesting return rates can be achieved, for the moment, of course.
Token and crypto exchange
One of the activities that is most sought after when going to DeFi is the exchange of assets, which in the more traditional cryptocurrency markets we can do in centralized exchanges.
In decentralized finance we can do it through DeX, that is, decentralized exchanges .
Use Stablecoins
Who wants to hold Etherem as collateral for a loan or as an asset that a contract depends on? With volatility that is impossible or at least not recommended. For this, decentralized finances have created the concept of Stablecoins , a discovery that has solved this problem of volatility.These “stable currencies” are stable because their value is linked to that of the main Fiat currencies such as the dollar or the euro.
In this way they serve as a savings unit and we can save money with them or carry out any type of operation with the guarantee that the volatility will be within controllable ranges.
Derivatives trading
The DeFi market has no limits, nor is there regulation that can reach it, at the moment, so we can do the most advanced type of trading that we can imagine.This is why many derivatives and margin trading sites have been created, among other trading functions.
Crowdfunding Possibilities
If you have an interesting idea that can solve some problem in digital environments, you could try to get financing in the DeFi system itself.There are already many projects that are coming out thanks to the funds that are obtained in this environment.
As it is a transparent system, all users can check how the money is being collected and also where it is being spent.
Insurance business
At the moment it is a market that is not extremely developed. It can be said that it is starting, but the capacity is there.There is no limit to the execution of insurance contracts between insurers or actuaries and users.
Even if you have a good knowledge of actuarial science and probabilities related to insurance, you could offer your services as an insurer to other users.
Market Prediction
DeFi has the perfect environment to create all kinds of betting markets and the like on the possible outcomes of any kind of event.In other words, I’ll tell you in other words: DeFi can end up creating their own decentralized betting markets without the dealer, such as Betfair, charging their commission,
Aggregators
Imagine that you have a fairly large activity in the DeFi space, with various contracted products.It can be an inconvenience having to go to each of the platforms to see how things are going.
Well, this is solved by the powerful architecture of DeFi, and aggregators have already been created to unify all the products in the same place, in such a way that we have a kind of unified portfolio.
Index investment
We can not only invest in index funds or ETFs, as in the Stock Market. DeFi also brings us its own sophisticated index funds that allow us to invest in the best of the decentralized finance market without having to worry.
This would be something like investing in the Dow 20 or 30 of DeFi, in such a way that the fund, of which there are already several, includes the most successful tokens and projects and removes the worst, thus behaving like a good investment fund. 12 Risk-Free Lotteries and Prizes
Yes, what you read. DeFi has also given the possibility of creating lottery games and the like in which no money is lost.
But how is that possible?
Well, by making the players’ money, which is placed in a common fund, generate interest. In this way at the end of the game, we will have the initial funds plus the interest gain. What the game does is distribute the money among all the players and some will take more money than they put in.
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