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5 Reasons Why DeFi is the Right Move

The rapid expansion of the DeFi (decentralized finance) movement can be attributed to many factors including high rewards and more access. DeFi is a term used to describe when developers take traditional financial services and decentralize them. Originally, these services included items like savings accounts. Nowadays, the DeFi movement has evolved to also include a combination of traditional services and a variety of new protocols.

DeFi represents a major shift in the way that people interact with the financial system. It brings a host of benefits that are impossible to deny. The main concept behind DeFi is to share wealth with users. The removal of centralized organizations and third parties opens up the door for users to finally get a cut of the profits. Here are five reasons why DeFi is the right move.

Transparency

One of the main reasons why DeFi is so popular is transparency. The current financial system leaves the users out in the dark. They have little to no access to the internal workings of the bank. They have to rely on faith that the bank completes tasks as requested and in a timely manner. History has shown that when the bank is unable to meet its requirements, the people suffer.

The great depression was an excellent example of how putting your faith in a centralized organization can backfire. Imagine going to withdraw funds from your account and learning that the bank was out of money. This unfortunate scenario has been the reality numerous times throughout history. From bank runs to gold confiscation, the centralized banking system was designed to retain power, not to empower you.

The DeFi sector leverages the transparent nature of blockchain technology to improve on its predecessor’s shortcomings. Public blockchains provide investors with instant access to network details via a blockchain explorer. Users can track their payments in real-time. Additionally, because of the peer-to-peer nature of these networks, there is no censorship or gatekeeper to appease.

For example, a DeFi lending platform eliminates the role of the bank. Instead, the system simply hooks up lenders and borrowers utilizing smart contracts called liquidity pools. Users can apply for loans and in most instances, the only requirement is collateral.

In comparison, getting a loan from your local bank can require you to speak directly with a loan officer. This person has the authority to then deny or approve your loan based on any criteria they deem necessary. In this aspect, DeFi provides a more balanced way to access funds.

Cheaper

Another major reason to make the switch to DeFi is reduced fees and costs. Your local bank branch is notorious for charging fees. There are fees required to keep your account open. There are fees on every service offered and fees on transactions. In the end, a large percentage of your funds go to paying off the myriad of groups required to complete a single transaction.

These fees only go up when you discuss international money transfers. Reports have shown that the average international transaction must go through +36 third-party verification systems. Each of these groups adds a fee that contributes to the overall cost of sending money. Sadly, these fees can gobble up as much as 7% of the total value being sent.

DeFi users can send value internationally in seconds for pennies. Networks like META 1 enable cross-border payments in near real-time and in a private manner. These systems continue to see rising adoption, especially in countries where remittance is a crucial part of the economy.

Profits

Along the same line of thought, DeFi opens the door for new wealth generation processes. Your typical bank account pays a minuscule amount of interest on your holdings. Unless you have millions in the bank, these payments are not enough to increase your wealth. Additionally, since they’re so many fee requirements, your interest payments usually go mostly towards your fees.

The DeFi revolution opens the door for new methods of securing profits. Developers have created multiple ways for the average user to increase their holdings with minimal risk. For example, the introduction of DeFi staking protocols makes it simple for new users to receive consistent returns on their investment.

Platforms like META 1 provide staking features that require no technical know-how to navigate. Users can stake their tokens directly from their wallets. Staking requires you to lock your cryptocurrency into a smart contract. It’s used to help verify the state of the blockchain. Unlike trading, you already know what you’re staking rewards will be based on your deposited amount.

Innovation

DeFi investors can attest to the fact that the market is rapidly introducing new ways to earn. DeFi now encompasses a variety of features exclusive to the market. For example, peer-to-peer lending enables anyone to borrow funds directly from other users. Lenders earn profits in the form of interest payments. Borrowers enjoy a more streamlined approach with faster access to funding and no gatekeepers.

Another development that has helped drive profits is savings accounts. DeFi savings accounts are very similar to your traditional bank but with much higher payouts. These accounts require no KYC and can be accessed from anywhere in the world. Platforms such as META 1 provide VISA debit cards to help improve the user experience. These cards enable you to pay for services and items using your crypto.

The META 1 VISA debit automatically converts your crypto into fiat currency at the time of purchase. When you swipe your card, the system ensures that the vendor only receives fiat currency at the PoS. This strategy bridges the gap between the centralized and DeFi sectors.

Freedom

The most important reason to consider switching to a DeFi is the added freedom you get from the move. Platforms such as META 1 were built to provide a viable alternative to these unfair systems. As such, they reside in areas outside of the jurisdiction of central regulators. These platforms seek to change the game by providing investors with a combination of features that help them earn and stay secure.

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