DeFi In 10 Years

We have all heard about what DeFi is, and for those who were present in the previous cycle, we all remember the boom that happened. But what, in my opinion, is the future of DeFi? Let's take it from the beginning.

Decentralized Finance, or DeFi, is like a digital version of traditional financial services but without banks. Imagine borrowing, lending, or trading money, but instead of going through a bank, you use computer programs running on the internet.

For example, in DeFi, you could lend your digital money to others and earn interest, just like putting money in a savings account. Or you could borrow digital money by using your assets as collateral, without needing a traditional loan process.

It's like conducting financial activities online, but instead of relying on a bank, you rely on smart contracts and blockchain technology.

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In the era of mass adoption and when crypto becomes something that we will use every day, I am sure that one day Blockchain technology will become that, and DeFi will replace the existing banking system. I don't believe traditional finance (tradfi) will stop existing, but the way it operates will change because banks will adopt DeFi practices.

Stop for a moment and imagine this. You have $10,000, and you want to invest them to earn some interest. If you don't know how to navigate DeFi because you are someone who doesn't want to educate yourself, what are you doing? You are making an appointment with the local bank and discussing it with an employee. If you go right now, they will tell you about some weird investment tools they have that don't really disclose how much money you will earn. You won't have the ability to keep track of how your money is being used because they are part of a larger pool of funds being invested left and right.

But in 10 years from now, when you go for that meeting in the bank, the employee tells you that you can now invest in DeFi. You can put your money in liquidity pools and earn interest or buy a token to help secure a network and get rewards for that. You can put your stablecoins like $HBD into savings and earn 20% interest or lend money to others and earn back interest for that money. If you want to borrow, you can borrow money without lawyers or expensive procedures; you just enter your collateral, and the smart contracts will do the rest for you.

Now, if someone believes that banks will die because of DeFi, it’s delusional. Banks will adapt and use DeFi to earn money. I know a lot of people don't want that, but I am pretty sure we are better off with that than the products they offer now. And, of course, the choice to do all that without the bank will still be an option that I hope most will take, but the average Joe will go to the bank.

Posted Using InLeo Alpha