Decentralized Finance - The next revolution in the world of finance services
Decentralized Finance, or DeFi is a financial service carried out on the public blockchain protocol, including decentralized exchange, money market, insurance, borrow & lending, and so on.
Decentralized Finance is predicted to be the next revolution in the world of finance services, some even predict it can replace the function of banks. I wonder why? Let’s learn!
DeFi (Decentralized Finance) privileges
1. Defi transaction fees are cheaper and transactions are fast
2. Peer to peer network
3. Not controlled by one particular entity
4. There is no minimum limit to participate
5. The existence of token goverence, which means that it involves community approval, cannot be changed by one party only
6. Transparent DeFi Dapps code
7. Without KYC / Know Your Customer
8. User experience is flexible
Talking about DeFi, it must not be separated from the Decentralized Exchange. Actually, what is the difference between Centralized Exchanges or Traditional Market and Decentralized Market or DeFi Market? Here is the explanation
Centralized Exchanges offer centralized or authorized cryptocurrency exchanges and use an order book system, namely sell orders and buy orders. For example Binance, OKEx, Kucoin, MXC, Hoo, Upbit, Indodax, Tokocrypto, Hotbit and so on. The advantages of Centralized Exchanges are higher trading volume compared to DEX, the existence of Fiat — Cryptocurrency trading, high liquidity, and high functionality. While the drawbacks are vulnerable to hacking, centrally regulated, possible scam from third parties, under government regulations in a country, prone to arbitrage, no incentive bonus.
Decentralized Exchanges offer cryptocurrency exchanges whose transactions are controlled by automated processes executed with smart contracts. This trade is said to be peer to peer. For example Uniswap, Unifiprotocol, Bakeryswap, Newdex, Pancakeswap and so on. The advantages of DEX are high security from hacking because the nodes are distributed, there is no centralized organization company, cannot be closed by the government because it is decentralized, there is no arbitrage, there is an incentive bonus for both LP users and providers. The drawback is that the trading volume is lower than CEX.
From the DEX example above, let’s discuss more about the unifiprotocol which is a DEX AMM multiple blockchain!
Unifiprotocol is a DEX AMM that runs on three blockchain networks, namely Tron, Ontology and Harmony. Unifiprotocol harmony network was released recently and harmony itself funds unifiprotocol. Then how do you use it?
Go to https://harmony.unifiprotocol.com/ and connect wallet harmony using the wallet harmony extension. Then select the features that will be used, you can trade, add liquidity, and claim UP. Add Liqudity and get UP Token rewards even more.
More information :
Unifi is Launching on Harmony
The Unifi Protocol will enrich the Harmony ecosystem and provide added utility to ONE
Incentivizing community participation in DeFi across multiple blockchains
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