WHY DECENTRALISED

FINANCE
Decentralized finance offers
financial instruments without
relying on intermediaries such as
brokerages, exchanges, or banks
by using smart contracts on a
blockchain
NEED OF DEFI

Source: https://wifpr.wharton.upenn.edu/wp-content/uploads/2021/05/DeFi-Beyond-the-Hype.pdf
CEFI VS DEFI...(1)

Source: https://wifpr.wharton.upenn.edu/wp-content/uploads/2021/05/DeFi-Beyond-the-Hype.pdf
CEFI VS DEFI...(2)
Sceneario: Currency Exchange

Source: https://wifpr.wharton.upenn.edu/wp-content/uploads/2021/05/DeFi-Beyond-the-Hype.pdf
 CHARACTERISTICS

Blockchain gives us a way to digitize and manage ourproperty rights

online peer to peer.

Digital bearer assets, commonly referred to as tokens, enable us to

hold and port valuable digital goods from platform to platform online.

These goods can be currencies, securities, and other financial assets

as well as collectibles, intellectual property, identities, and many more.

No central party controls all!!!!

#1.STORE VALUE
Individuals and institutions can use
non-custodial wallets to act as their
own banks, and third-party
custodians can hold crypto at scale
for institutions.

For managing and protecting shared

resources,Wallet nowdays provide
multisignature (multisig) capability,
meaning that groups can program
transactions to require more than
one signature to execute them
#2.PAYMENT
ENABLER
BTC, MakerDAO’s DAI, Terra Luna’s
UST, the Centre Consortium’s USD
Coin (USDC), Tether (USDT), and
Similar stablecoins can be fungible
with legal currency via Banks or
FIntech services like PayPal’s Venmo,
Early Warning Services’ Zelle, the
Society for Worldwide Interbank
Financial Telecommunications
(SWIFT) network, visa, mastercard
and other payment players
#3.YIELD EARNER

Pooled lending protocols such as

Compound (COMP) and Aave (AAVE)
augment or beaten savings accounts
at banks and other financial
intermediaries like hedge funds,
stock markets and have better yields
to boot.

Flash loans are taking DeFi to next

level
#4.HIGH RISK HIGH
RETURN

Investment aggregators such as

Yearn Finance (YFI) and Rarible
(RARI) could ultimately
disintermediate investment
advisors, mutual funds, exchange
traded funds, and roboadvisors.

They support real world assets and

cryptoassets
#5.EXCHANGING
VALUE
Decentralized exchanges such as
Uniswap (UNI), SushiSwap (SUSHI),
and QuickSwap (QUICK) are
competing with centralized
cryptocurrency exchanges for
liquidity and dollar volumes and will
be the model for all exchanges,
including today’s centralized stock
exchanges such as the New York
Stock Exchange (NYSE) and the
Nasdaq marketplace.
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