Decentralized finance is undoubtedly the hottest topic in cryptocurrency. It is touted as a way to make money by supporting the right tokens. It is also a tool to set the cryptocurrency you hide in your cold wallet to work. Earn extraordinary interest rates.
There are reasons why DeFi is growing so fast that it slows down the speed of the Ethereum blockchain, where most of the projects are crawling, and the gas price for transactions sometimes soars to $10, $50, or even $100. .
The most talked about is DeFi, which takes over the banking and brokerage businesses on which large-scale finance depends, but the technology can be used to revolutionize many other businesses, from energy to e-commerce.
The reason is simple: the core of decentralized finance is to eliminate middlemen.
When you can loan money by several orders of magnitude through a cryptocurrency lending website, why should you give the bank your money-only a trivial 1% interest-in order to lend it out?
Or invest it in a liquidity pool that uses automated market makers to create a shared token pot to which cryptocurrency traders can sell or buy these tokens instead of waiting to find what they want to sell The price of the trader who buys what he sells thinks. The way the liquidity pool works is that the liquidity provider locks the funds in the pool in exchange for the fees paid for each transaction-these fees are usually paid in the exchange’s native tokens.
All you do, in fact, is to replace the agency that facilitates these transactions with smart contracts-this person is taking it from Jane and giving it to John-using smart contracts to automate the introduction and exchange of currency. In other words, it turns peer-to-peer trading into peer-to-peer trading.
The difference lies in the immutable nature of the blockchain, which makes it impossible for any party to cheat. Because it is trustless, you don’t need to pay a trustworthy intermediary to do this for you.
Financial transactions are a low-hanging fruit for DeFi because they are very frequent and the monetary value of the transaction is so great. In other words, the forms of DeFi transactions, pledges, and income agriculture may become very complicated. However, this is mainly because people are willing to do very risky things, such as betting on margin with borrowed money.
However, DeFi is suitable for almost any data you need to transfer from one party to the other. This can be e-commerce, insurance, digital identity, or even electricity-the possibilities are endless. In most cases, they are fairly simple.
Decentralized energy has attracted enough interest that it has been given its own nickname-DeEn instead of DeFi-although it also uses DApps and smart contracts, and usually exists on the Ethereum blockchain. Apart from the removal of the middleman-brokers and utilities-the only real difference is kilowatts instead of kilobytes.
A year ago, the German sustainable energy company Lition launched a blockchain-based decentralized peer-to-peer energy exchange, allowing individual consumers to accurately choose the source of energy to buy from cheap, green or local power producers —No matter what they choose.
It is up and running, and according to In power industry publications, consumers saved an average of 20% on utility costs, while power producers’ income increased by 30%.
E-commerce is another mature area that DeFi is disrupting, and one of the companies is Uquad, Aims to build a bridge between DeFi and e-commerce.
One way it does this is through its Diffito The financial sector focuses on using the tokens earned from each sale or purchase for shopper loyalty programs.
The website uses three technologies commonly used in DeFi transactions, lending and mining operations, and is adjusted according to the needs of e-commerce websites.
Shopping mining is a loyalty program that creates and rewards newly mined tokens for every purchase from Uquids’ many online stores, which provide everything from video games and music to subscriptions to streaming services such as Spotify and Xbox Live . This uses one of Defito’s native tokens, DeFi Shopping Stake (DSS). Once mined, these tokens will be loaded into a smart contract, allowing them to be purchased from the Uquid website in the future, or used for staking in the liquidity pool.
Another token of Defito is DTO, which is a governance token that can be earned by contributing liquidity to the shopping liquidity pool. The Defito pool does not allow cryptocurrency traders to buy and sell tokens, but represents digital goods on Uquid’s e-commerce website, from games and business software to gift cards and mobile recharge cards. Automated shopping manufacturers connect product pools from different vendors, allowing token holders to search for and track the best prices for the number of products they wish to buy. These sites accept cryptocurrency payments.
Both DTO and DSS can be used for staking and payment, but DTO brings governance voting rights, including whether DSS tokens should be destroyed to increase their value or used to develop reward systems.
Another DeFi token is Uquid (Queensland university), a decentralized ERC-20 token that can be used for a variety of more traditional DeFi services, including mortgages, loans, loans, and token exchanges, as well as commodities such as utilities, groceries and pharmacy coupons from chain stores around the world .
Finally, Uquid recently added a fourth token to its new NFT market, NFTD. Non-fungible tokens are the core of the digital product market and can be used to provide buyers of digital products with clear ownership. This is a Binance Smart Chain utility token that targets social media content, from TikTok and YouTube videos to photos and music, and other digital content from Uquid.
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