Decentralized Finance is making headlines, and anyone interested in cryptocurrency should be interested in DeFi. While the applications for the emerging technology are still being developed, the potential is huge.
Although still small as compared to the world’s economy, DeFi has seen expeditious growth in 2020. In early June 2020, there was only $3B of crypto collateral locked in the DeFi economy. By July 2020, the number increased $4B and continued to witness impressive growth, hitting $8B on 17 September 2020.
This growth shows that the crypto community is taking a significant interest in DeFi coins. So, if you also want to gain maximum profit, it’s the right time to invest in decentralized finance currency development.
What are DeFi Tokens/Coins?
DeFi tokens or coins are transparent blockchain-based financial networks where borrowing, lending, and other transactions can take place without the involvement of any central authority like banks.
While the concept has been around for more than four years, there is a sudden rise of interest in the DeFi token solution as they promise to replace the traditional financial method with smart contracts, which are self-executing with all conditions written in code.
Many DeFi-based tokens have been pumping strongly in 2020, with some tokens showing gains above 50% in the past few months.
However, the general growth in the DeFi ecosystem comes with thin trading volume if we compared it with Bitcoin’s daily trading volume. But the main question is – what is making these DeFi coins’ prices rally in such an accentuated way?
- Ethereum Network Activity is at its Peak
According to a recent report, interacting with the Ethereum network through simple transactions or smart contracts has recently hit an all-time high. As per the Ethereum Gas Station, Decentralized Finance exchange and USDT are the leaders when it comes to gas usage. Consequently, DeFi tokens have outperformed CEX tokens like LEO and BNB.
Similar to Bitcoin, the Ethereum network has been dealing with numerous scalability issues that can tremendously affect DeFi’s growth, given that the majority of activity occurs on the Ethereum blockchain.
The next update of Ethereum 2.0 is extremely important in order to deal with this issue.
Benefits of Decentralized Finance Currency
There are many benefits of DeFi crypto services, including the fact that funds or information cannot be seized by central authorities.
- Decentralized Finance Currencies are Democratic
DeFi currencies are the most democratic form of money ever created. Since it is decentralized, no government can set its price. Decentralized currencies are completely in control of users.
- Decentralized Finance Currencies are Truly Global
Perhaps the most outstanding reason that DeFi currencies are the future of money is that they’re truly global. As decentralized finance currencies are not controlled by anyone, they are not limited to any specific location and can be used globally, without any geographical barrier.
- Decentralized Finance currencies are immune to inflation
4) Decentralized finance currencies do not rely on geographically-based exchange rates. It means that goods and services purchased with DeFi token or coin will not be devalued due to tariffs or unfavorable changes in national monetary values.
Decentralized Finance (DeFi) currencies represent an evolving view of how information can change the world. From the way you use and spend money to the way you communicate, and the way you vote and register for services, blockchain technology holds huge potential to change the conversation on how everyone works and lives.
If you are also planning for DeFi token development, Antier Solutions can help. Our blockchain engineers have real-world experience in developing unique and secure DeFi coins or tokens.
Schedule an obligation-free call with our experts to share your business needs.