A network of so-called 'smart contracts' then automatically handles the transactions. It also provides all necessary and important checks in the entire process. And any actions if payments are not executed, such as a repayment.
DeFi
The many hundreds of companies currently offering DeFi products have almost all built their projects on the Ethereum blockchain. Just like many other smart contract projects, decentralized applications, and other blockchain projects have done so. The rapid growth in the number of projects is reminiscent of the Initial Coin Offering bubble in late 2017, which led to record prices for various cryptocurrencies such as Bitcoin and Ethereum.
Also read: Cryptocurrency: the 5 most important developments for 2020
It also caused a lot of pain for investors, as indonesia telegram data most projects saw their prices drop by 95-99% in a short period of time . In the end, 80% of the projects turned out to be outright scams. Unfortunately, we see that happening again now, like with the aforementioned YAM project, but also several DeFi exit scams.
If you can't understand it without an explanation, you can't understand it with an explanation. – Haruki Murakami
The decentralized dream that is becoming a big step towards reality sounds very nice on several levels. A world that operates without rules set by and control from governments and institutions such as banks. Everything is organized by the individual and the direct community, who are also directly rewarded for their own input.
Points of interest for DeFi
But a major point of attention that DeFi unfortunately does not yet know how to tackle is the prevention of money laundering and countering the financing of, for example, terrorism: Anti Money Laundering and Know Your Customer. The first solutions for this have now been launched , but are still only used on a small scale. Even though the cryptocurrency sector is maturing quickly, it is still in its infancy in various areas.
