Steemit Crypto Academy Contest / S4W2 - Decentralized Finance by @jasminemary

Hello friend

Greetings to you and welcome to my post today. How are you doing today? I am sure that you and your loved ones are all doing great and catching fun. Indeed I am glad to have you here just as I am delighted to present the post which you are about to read through.

Explain in your own words the DeFi world Why is it important? Let's talk about it.

The words DeFi stands for Decentralized finance which is one of the most important words in the world of cryptocurrency. The main aim of DeFi is to create an efficient financial system that is trustworthy enough and completely independent from being manage or control just the way our traditional financial institutions are being control.

In other way round, DeFi in the world of cryptocurrency is a means by which decentralized network is totally leverage out of traditional financial system into a more transparent and trustworthy protocol (network) that run on its own without the support of a third party.

Source

The DeFi world has received billions of dollars in order to make a transparent and trustworthy financial system. The aim of the DeFi world is to provide the whole world with a deep financial system and advisors that will understand the space and create a bridge that can allow everyone to efficiently make use of decentralized financial system.

Furthermore, the words DeFi is a crypto product that is built on cryptocurrency like ether, that is fully open to anyone across the world. Basically, DeFi is a trustless application that aren't contest by a central authority like how centralized finance (traditional financial system) are controlled. In a DeFi smart contracts and blockchain technolgy is what allow the system to function properly for everyone to utilize.

Important of DeFi

The main goal of DeFi is to create an open financial system that is permissionless (open) and trustless. DeFi is very important as it has the potential to create a financial markets that are free and fair which give everyone the opportunity to have access to the financial markets through the use of Internet connections.

DeFi is also very important as it open more development and investment to improve traditional system. DeFi also help to bring more understanding of into the financial system through the use of decentralized applications.

Finally, to this DeFi is very important as its create more smart contracts, stablecoins, borrowing and lending platforms that lead to the creation of decentralized exchnges that makes the components of decentralized blockchain more and more useful.

DeFi Vs Centralized Finance. Advantages and disadvantages, let's talk about them.

In order to understand the comparison of DeF vs Centralized Finance and that of the advantages and disadvantages of DeFi vs Centralized Finance, we need to have a better understanding of these two concepts first. However, since we have understand about DeFi from the beginning of this post, I will like us to also understand Centralized Finance before looking at the both advantages and disadvantages.

Before the Introduction of DeFi, Centralized Finance was already in existence which stands as the standard for trading of cryptocurrency. Centralized Finance make sure that all cryptocurrency trade orders that are place are being handled via a central exchange. All fund and control by the central exchange which means that a users don't own the private key to his or her wallet.

Having knowing briefly what Centralized Finance is about let's take a quick look at the difference between DeFi and Centralized Finance in a tabular form below.

DeFi vs Centralized Finance

key Difference	DeFi	Centralized Finance
Custody of funds	In DeFi users has completely controlled over their funds.	Users doesn't have control over their funds, instead it is outside of user custody before the exchange control users funds.
Security	User funds are not accountable should incase of security bridges.	There is vulnerable to users funds should Incase of security bridges on the exchange.
Available Services	DeFi services are; Payment, Lending, Borrowing and also Trading	Centralized Finance services are; Trading, Fiat-to-crypto, Lending and also Payments.

Both DeFi and Centralized Finance aims to achieve the same significant goal. The main goal of DeFi and Centralized Finance is to make trading if cryptocurrency more popular and improve the trading volume of cryptocurrency. However, they objective are different from each other.

DeFi aims is to create a free space for reading of cryptocurrency, whereas Centralized Finance is to protect investors funds from been back and provide a more convenient ways of trading cryptocurrency. However let's take a look at they advantages and disadvantages.

Advantages and disadvantages

DeFi Advantages

Quick and Permanent access
DeFi provide us quick access to financial system. Before one has to go to the bank and spent a lot of time in order to send money or collect loan from the bank but with the use of the DeFi all you have to do is just to click on and access your loan once you have and internet connection.

Permissionless Operations:
DeFi doesn't allow users to get permission from third party before their can carryout financial operation, unlike Centralized Finance that requires the use of third party.

DeFi Disadvantages

Low Liquidity
Liquidity is one of the thing that is very important in any financial system. However in a DeFi there Is challenge in liquidity.

Problem of Smart Contract:
The vulnerability of smart contracts is an issues for so many DeFi projects. Any slice mistake in smart contracts program it can affect the use of DeFi and thousands of transactions will be affected.

Scalability
Scalability is another disadvantages of the DeFi. One of the scalability problem is that transactions take a longer time before it can be confirmed and secondly, transactions are very expensive at too congestive.

Have you used decentralized Exchange? Tell your experience and explain a Decentralized Exchange. Show screenshots.

Screenshot gotten from Trustwallet

Yes PancakeSwap (v2) was the decentralized Exchange that I have used. My experience with PancakeSwap exchange is that it is a DApp that is access through Trustwallet. During my first experience with the exchnges, I lost my money. What's happened was that I never knew how the exchanges was been operated.

Screenshot gotten from Trustwallet

By using the exchange one has to identify the type of network that he or she want to breed or swap. In the network, there is Binance Smart chain, Ethereum, Ethereum Class, POA network etc. What I did was that I went straight and opened PancakeSwap (v2) and added the token contracts address direct instead of adding the token first and after I had added it directly on PancakeSwap (v2), I went and copy the address and sent the token and still today I didn't received the token in my address because of the wrong connection that I did.

Honestly, PancakeSwap (v2) Exchange, is often confusing me and it is the reason why I don't involve myself with anything that has to do with the used of decentralized exchange.

Give us your opinion about the future of DeFi.

My opinion about the future of DeFi is that DeFi has come to stays and also come to replace the failure of traditional financial institutions to give and account of over $1 billion. Due to the in accessibility and bridge of security of users fund DeFi is going to be the future of finance because if how safe and reliable it is working without the involment of a third parties.

DeFi has make it possible for everyone to remain in custody of their funds unlike traditional finance that take controls of user funds. Due to how DeFi has proven the modern ways of doing things it is of no doubt, for me to say that DeFi is the future of finance since it has come to solve the problems that is confronting traditional financial institutions.

Thank you for your time here....

I am inviting @preye2, @carlaisl and @yakspeace to also join me and take part in the contest.