Decentralized Finance (DeFi) refers to a new financial system built on blockchain technology that operates without the need for traditional financial intermediaries such as banks. Here are some of the key advantages of DeFi:
Accessibility: DeFi offers financial services to anyone with an internet connection, regardless of their location or socioeconomic status. This means that people who are unbanked or underbanked can access financial services that were previously unavailable to them.
Transparency: Transactions on the blockchain are transparent, meaning that anyone can view them. This increases trust and reduces the risk of fraud or corruption.
Security: Blockchain technology is highly secure because it uses cryptography to protect transactions. This makes it difficult for hackers to steal funds or tamper with data.
Efficiency: DeFi transactions are automated, meaning that they can be executed quickly and with low fees. This can save users a lot of time and money compared to traditional financial services.
Banks are afraid of DeFi because it represents a threat to their business model. Banks rely on their role as intermediaries to make profits, and DeFi eliminates the need for intermediaries. In addition, DeFi allows people to take control of their own finances and eliminates the need for banks to act as custodians of funds. Finally, DeFi is highly disruptive to the existing financial system, and banks are understandably wary of any technology that could disrupt their industry.
