Central DAO presents 'All About Web3'

'All About Web3' series of publishing that’ll make you a Web3 Wizard. In the Publishing #3,'All About DeFi'

Today’s financial systems are largely controlled by big institutions—banks, governments, and corporations—leaving many people without access to basic financial services. Decentralized Finance (DeFi) is here to change that. Built on blockchain technology, DeFi allows anyone with an internet connection to access a range of financial services—like lending, borrowing, and trading—without needing a bank or central authority.

Traditional finance has several key issues:

1. Exclusion: Around 1.7 billion people globally are unbanked, many of them living in underdeveloped areas where banking infrastructure is scarce or inaccessible.

2. Centralized Control: Large financial institutions decide who gets access to services, limiting opportunities for many people.

3. High Fees: Transactions, especially across borders, often come with hefty fees and long wait times.

DeFi addresses these problems by removing intermediaries and putting control directly into the hands of users.

DeFi democratizes finance. Anyone, anywhere, can open a digital wallet and access financial services without needing a bank account. This is especially important for those in underbanked regions who are typically excluded from traditional finance.

In traditional banking, your transactions and money flow are often hidden behind layers of intermediaries. DeFi operates on public blockchains, where everything is transparent and verifiable. This openness builds trust without needing to rely on a central authority.

With DeFi, you control your own assets. Unlike in traditional systems, where a bank can freeze or control your money, DeFi gives you full ownership—nobody can seize or restrict your funds.

DeFi reduces the fees and time delays associated with traditional financial services. Cross-border payments, for example, are much quicker and cheaper, as there’s no need for intermediaries like banks or clearinghouses.

In traditional finance, participation often requires large amounts of capital or special accreditation. DeFi opens the door to everyone, allowing people to trade, invest, and earn on their assets without needing significant upfront investments.

Aave (AAVE): Aave is a decentralized lending protocol that allows users to lend and borrow a diverse range of cryptocurrencies. It introduced the concept of flash loans—uncollateralized loans that must be repaid within a single blockchain transaction

Compound (COMP): Compound is an algorithmic, autonomous interest rate protocol that enables users to lend and borrow cryptocurrencies. It supports a variety of assets and offers competitive interest rates

MakerDAO (MKR): MakerDAO is a decentralized autonomous organization that manages the DAI stablecoin, which is pegged to the U.S. dollar. Users can borrow DAI by collateralizing their Ethereum-based assets, providing a stable and decentralized borrowing option

Curve Finance (CRV): Curve is a decentralized exchange optimized for stablecoin trading, offering low slippage and minimal fees. It supports various stablecoins and has become a pivotal platform for stablecoin liquidity

Uniswap: Decentralized exchanges like Uniswap enable peer-to-peer trading without relying on centralized exchanges, giving users full control over their trades.

DeFi is still evolving, but its potential is enormous. By breaking down the barriers set by traditional financial systems, DeFi aims to create a more inclusive, accessible, and transparent financial world. It’s not just about technology; it’s about making finance work for everyone, not just a select few.

In short, DeFi matters because it offers a fairer, more open financial system that anyone can be a part of. It’s finance reimagined for a digital, global age—accessible, transparent, and empowering.

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