DeFi, an acronym to Decentralized Finance, is the current trend in the blockchain landscape. DeFi is attracting a growing number of developers and is becoming a focal point for financial technology builders. A DeFi platform offers all traditional financial services such as borrowing, lending, investing and trading in a decentralized format to enable everyone with internet access to trade in global financial markets.
DeFi is gaining popularity because there are no bureaucratic or technological gatekeepers that you might see in FinTech. Native assets on the platform are effectively bearer instruments. DeFi’s trust primitive makes it a preferred choice for builders.
In this article we’ll list the top 4 DeFi platforms that we’ve researched.
Uniswap is a protocol based running on Ethereum and serves as an interface for exchanging ERC-20 tokens. It focuses on ease-of-use and transparency and a single platform for all needs of ERC-20 token hodlers.
MakerDAO focuses on volatility migration through its stablecoin. The coin is pegged to USD and is collateralized by a separate security token called CDP. Their primary objective is to establish a stable exchange of value on the Ethereum blockchain.
This is an Ethereum-based microcredit platform that aims to challenge conventional methods of credit scoring. Similar to traditional microcredit organizations, Colendi leverages blockchain technology in order to extend microcredit opportunities on a global scale. Colendi’s purpose is to bank the unbanked, and that is 40% of global population. Lack of access to adequate banking services is a problem that extends even to the developed world. Colendi’s platform divides the issue into a protocol and non-protocol layer and resolves it.
4. Dharma Protocol
This is a project built on top of 0x, and it enables permissionless management of debt instruments through smart contracts and other Ethereum-based mechanisms. The Dharma Protocol’s purpose is to provide an alternative to the traditional debt industry, which suffers from systemic misgovernance and lack of transparency. The protocol is executed through a system of debt orders that are managed through Ethereum smart contracts in a peer-to-peer manner.
To Sum it up
DeFi use cases are versatile and have added value to every industry within traditional finance by increasing transparency and trust. These 4 projects are industry leaders and there are several others with unique use cases and real world applications. DeFi is influencing the global market and bringing about innovation in the finance industry.