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From the beginning of 2019, DeFi has become a hot topic in the blockchain field. Looking back on this year, the development of DeFi has brought great impact on the blockchain ecology and financial market. So what is DeFi? What does its coming mean? Let’s unveil the answer with Jarvis Plus today!
DeFi is Decentralize Finance. It is an ingenious combination of “decentralization” and “finance”, which describes financial services built on the blockchain. A decentralized system is a system that requires multiple parties to make independent decisions. In such a decentralized system, there is no centralized authority as a representative to make decisions.
The essence of finance can be condensed into: the exchange of utility and risk in space and time. In theory, all services and products provided by decentralized finance are the same as in the traditional financial world. In the traditional financial system, financial services, including financing and investment, savings, credit, settlement, securities trading, commercial insurance, and financial information consulting, are provided to users by centralized financial institutions. However, DeFi uses distributed ledger technologies, including blockchain, cryptocurrencies, and smart contracts, to provide services such as loans, financing, stable coins, and credit arrangements.
