DeFi is being applied in many verticals and listed here are the top use-cases of DeFi.
Borrowing and Lending
Peer-to-peer borrowing and lending is the most widely used application of DeFi ecosystem.DeFi allows users to take a loan without any applications review or a bank account. In some DeFi apps, the borrower need not find a lender, instead of the smart contract itself acts as lender, and interest is calculated based on supply and demand.In some other DeFi apps, a fixed interest rate is made for the loans.DeFi makes the process of lending and borrowing much easier and time-saving.
Asset Management
With DeFi, you are the only custodian of your own crypto assets. You can securely interact with decentralized applications for buying, selling, and transferring your cryptos by using crypto wallets such as MetaMask, Gnosis, Argent, and more. For Example MetaMask stores your password, seed phrases, private keys in an encrypted format that you can access anytime.
Gaming
The significance of DeFi has made product developers build DeFi protocols directly for various verticals. Ethereum based games are becoming popular for the use-cases of DeFi because of their innovative incentive models.
For Example, PoolTogether is a no-loss DeFi audited game that enables users to purchase lottery tickets by depositing DAI stable coins.
Identity Management
The DeFi protocols paired with identity systems based on blockchain are ways to help locked-up users to access a globally true economic system.DeFi is key that reduces the people's collateralization requirements and helps assess creditworthiness through reputation and financial activity instead of income and homeownership.
This DeFi solution provides data privacy of personal identifying information along with open access. This implies that anyone with internet access can access DeFi applications from anywhere with complete control over their data and assets.
Insurance
As DeFi is still in its infancy stage,it still faces risk around smart contract bugs and breaches. Since, many innovative insurance alternatives have arrived to assist users in buying coverage and protecting their holdings.
For Example Nexus Mutual provides smart contract cover that protects the unintended use of any smart contract codes.
Some of the other use-cases of DeFi are
Payments
Analytics
Tradings
Wallets
Education and more.
Apart from the above fields, DeFi finds applications in all businesses to make decentralized finance.
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