Over the past year, decentralized finance has become a real trend. The reason for this is quite simple: the usual centralized banks do not do their job well enough. Lending, transactions, and other services are not performed so quickly and efficiently.
DeFi is a decentralized finance service that aims to replace the banking sector. They use distributed ledger technology and digital currencies as legal tender.
Practice has shown that decentralized finance is doing an excellent job. Cross-border payments are carried out almost instantly, loans are issued against collateral in cryptocurrency, and the system is reliably protected from hacks.
DeFi Industry Transaction Volume
Even at the beginning of 2020, few people heard about decentralized finance. There were several projects in the top 100 CoinMarketCap, but they were not very popular.
For 2020, the industry has grown 12x, according to a DappRadar report. From 22.5 billion US dollars to 270 billion US dollars.
In part, this volume of transactions has a positive effect on Ethereum as well. Since most of the tokens are ERC-20 tokens that belong to the ETH network.
DeFi provides one interesting tool that cryptocurrencies previously could not boast of. Profitable farming. You simply block tokens within the network and receive a reward for them. Money makes money - the main principle of capitalism.
What are the prospects of DeFi?
Most of the projects could not be fully implemented due to technical limitations of the same Ethereum network. Contrary to the opinions of many critics of decentralized finance, upgrading the ETH network to 2.0 will remove many of the restrictions that previously held up projects.
After the network upgrade and the transition of ETH to PoS, the cost of transactions and their speed will be significantly increased, which will solve the long-standing problem of DeFi - high fees.
Commissions for DeFi projects are high only for decentralized exchanges. Therefore, CEX comes to your aid. Using the centralized Cryptology exchange, you can trade DeFi tokens with the lowest fees and leverage up to 100x.