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Decentralized finance has become an open alternative to the current financial system. While it gives control and visibility over the money, it also exposes users to global markets and gives alternatives to the local currency and banking options. Meanwhile, the value of assets used in decentralized finance was $100 billion as of October 2021.
What is DeFi?
Decentralized finance (DeFi) uses smart contracts on a blockchain to provide financial instruments without the use of intermediaries such as brokerages, exchanges or banks. People can use DeFi platforms to lend or borrow money, bet on asset price fluctuations using derivatives, trade cryptocurrencies, insure against risks and earn interest in savings accounts. DeFi is based on a layered architecture with easily interchangeable construction blocks.
The basic purpose of DeFi is to create a global permissionless and transparent financial ecosystem. As a result, it can operate without the assistance of a central authority. Additionally, this system may readily interface with other systems via peer-to-peer networks or decentralized applications (dApps). The DeFi platform is accessible to everyone with an internet connection on their device. It’s likewise based on the Ethereum blockchain and powered by a peer-to-peer decentralized network.
DeFi projects have gained massive popularity in the recent past. The creation of stablecoin has established the decentralization of the financial market. A market with such huge potential has gained attention of investors which has resulted in the introduction of some successful DeFi startups.
Here Are Key DeFi Startups To Look Out For In 2022
- Kyber: Kyber is a DeFi technology that allows users to swap and convert digital files with ease. One of the advantages is that users can pay in any token/crypto which can then be quickly converted into the coin of their choice in their Kyber wallet.
- Rocketpool: Rocketpool is a staking option that allows users to stake with less than required minimums while making the process more accessible. Staking allows cryptocurrency owners to put their assets to work and earn passive income without having to sell them. Staking can be compared to placing money in a high-yield savings account in the crypto world.
- Balancer: Balancer is a Portuguese decentralized system that allows users to swap tokens, create liquidity pools and act as an autonomous market maker. The value proposition of Balancer is that instead of paying a portfolio manager to rebalance your portfolio, you receive fees from traders who do it for you.
- Synthetix: Founded in 2017, Synthetix (SNX) is an Ethereum blockchain system that allows for the creation of synthetic assets. Synthetic commodities such as gold and silver, synthetic cryptocurrencies, synthetic inverse cryptocurrencies, synthetic cryptocurrency indexes, and synthetic fiat currencies are all supported by Synthetix. The platform expands the crypto ecosystem’s exposure to non-blockchain assets, resulting in a more mature financial sector. Synthetix platform is also available for assets like gold and US dollar.
- Nexus Mutual: Nexus Mutual is a blockchain-based insurance company with community-driven management and financials. Unlike a traditional centralized insurance company, Nexus Mutual uses Ethereum blockchain which allows users anywhere in the world for risk pooling without the risk of any intermediary. Its smart contract protects users from any hacks or loss of funds.
These are some of the most popular DeFi start-ups, which are expected to be the next big things in the coming months. If we look at them closely, each one of them addresses a unique feature such as a decentralized portfolio, insurance, swapping etc.
Brugu Software Solutions is a leading DeFi development company. . We offer end-to-end services in DeFi platform development across various DeFi standards that includes Balancer, Kyber, Synthetix, etc. Be it insurance, swapping, staking or any other DeFi features that you’d like to offer, you can get in touch with our team to develop your DeFi-based start-up with the features that best suit your business requirements.
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