DeFi: Showing Signs How It Is The Future Of Finance

in LeoFinance4 years ago

The hottest topic in cryptocurrency last year shows no signs of slowing down in 2021. We are seeing a lot of attention coming into this relatively new financial system that is forming.

Decentralized Finance (DeFi) was long promised to be the salvation to our economic struggles. It truly brought one of cryptocurrency's tenets to the forefront: operating without a third party. If code is law, this certainly is it.


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Naturally, skeptics can point to the exit scams as an issue. Unfortunately, this is a part of all new technological advancement. There are simply people who have nefarious intentions and refuse to put forth the effort to achieve success in an ethical manner.

Nevertheless, that type of activity once concerned the politicos with regards to the Internet. The early days were filled with scams and fraud. In fact, one could state that things haven't changed much. There is still a lot of it occurring on a daily basis.

That does not stop us from using the Internet. We continue to go online and interact in a variety of ways. Ultimately, we gain some intelligence which helps us to take preventative measures. Technology also helps with more advanced anti-abuse software.

Thus far, we are getting signs into the future of finance. The path from where we are to a decentralized world of financial products and service is in our sights.

This week we saw the release by the Hive-based project, @leofinance, of a new DeFi platform on BSC. This already crossed the $10 million market in total value locked, an impressive amount for something so new.

With exit scams rather common, this is a new approach. Here is a project with close to two years of history on developing different applications. It is not some anonymous coder. This is part of the shift away from the Wild West.

At some point, we can expect a known company to follow this path. Some financial entity will get the idea that it can do the same thing. At that point, we will start to see a greater embracing by the traditional firms. They are simply going to have to adapt or be eliminated.

Yesterday, we saw a proposal put forth by @klye who is looking into pulling what is done on Ethereum and BSC to Hive. This, if accomplished, will offer the potential for cross-chain integration. Essentially, it could be thought of "anything they can do, Hive can do". The best part is that it will utilize HIVE for all transaction fees.


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These two examples show how important this sector is. We are witnessing the transformation before our eyes.

Ethereum developers have done a terrific job laying the foundation of what will be an entirely new system. How far can this go? That is anyone's guess.

However, one of the keys will be that individuals will be able to post digital assets as collateral for loans. This is a common practice in the world of finance. Yet, it is one that is wrought with paperwork and applications. All this takes time.

The easiest concept to use is the idea of getting some type of check in 90 days. This will be a payout that can be used to payback a loan. If one is going on vacation, the choice is to try and get a loan from a bank or use credit cards with high rates. The money will be there in 90 days so there is no worry there.

With DeFi, it is simple. Put up some collateral to get the loan. When the check comes in, convert to crypto and pay it back. The money is paid within seconds since there is no paperwork or bank to deal with.

This brings up the point of assets. Part of the problem, in addition to the banks being a pain in the hind end, is the fact that most people do not have anything they can put up. Their main asset, a home, is usually already leveraged. So what is one to do?

Obviously, we are seeing an enormous amount of wealth generation already in the crypto world. While we can look at what Bitcoin is doing, it is best to look further down the scale.

Individuals, often of no great means, are accumulating digital assets through their activities. This is providing them with the financial foundation required to take advantage of the financial products offered.


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DeFi is a system that provides financial products and services to people outside the present financial system. However, it looks like it can add another layer to what individuals are doing that the existing one does not: the ability to create income/wealth to get involved.

For example, how could this system be tied to NFTs? Right now that sector is a bit crazier than even the DeFi world, which is to be expected at the early stages. Nevertheless, when things settle down, consider the possibility of people creating NFTs that are tied to their works and the using the value of the as collateral for things such as loans. This could be a very real possibility as the DeFi infrastructure got built out.

We are well aware there is money in the NFT industry. While a lot of stuff might end up having little to no value, there will be things that carry a high price tag. Just this week we saw a NFT go for near $70 million.

Ultimately, we are looking at the world of DeFi expanding. Will the astronomical rates of return always be there? Not likely. However, it is a realistic scenario to see the industry grow to the point where it offers outstanding returns in a low risk manner.

If we see the rates settle at, say 10%-15% annual return, this will really do damage to the banks. How can they compete when they are offer a couple percent, if people are lucky? The answer is they cannot.

The Network Effect is something to consider in this sector. As more people join the fray, we are going to see a great deal of incentive to develop more offerings. This will keep pushing DeFi further into the centralized finance space and take over.

Another think to keep in mind is the idea of reference points. With new technology, the first stage is based upon what we know. Thus, DeFi is mimicking the financial system we have now. However, things change when the 2nd and 3rd generation rolls out. It is there where we see a lot of novelty, something that is completely different from what we knew before.

It is likely we will see the same thing with DeFi. In a few years, the development will be in areas that we are not even aware exist today. That is how innovation works.

This is not very promising for the traditional banks.


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It is likely we will see the same thing with DeFi. In a few years, the development will be in areas that we are not even aware exist today. That is how innovation works.

Time will tell which will grow and which will fall, all are new and testing is imperative especially around security. New ideas, forging a new financial future!

@tipu curate

10%-15% annual return

We need to make this mainstream so these banks understand they will go out of business if they don't want to change.

pulling what is done on Ethereum and BSC to Hive

It's a good idea. By introducing more crypto interested people into the HIVE block chain, we are more likely to gain active users. I am sure some of them have some insights into specific crypto that we would find nice to know. I think the retention rate would be better compared to inviting normal people.

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Especially with the ability to bring all ETH and BSC tokens easily into the ecosystem.

It will be interesting to see how this unfolds. I hope there is a proof of concept that takes shape soon.

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And the most important thing is that thanks kal and leofinance we are already on board of defy, although i just invested US $ 33.50 jaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa rate ...
But to learn that is good, I think.
Yes, there will always be thieves in fact in wleo and I think it will happen also in cub that I have no doubt there are always abusers, so I am waiting to see the results of the audit that is being carried out to the project there I think because of the guy specialized work I can not put any knowledge because it is code and all that.
but well, if 10 million are already there, that is not something that can be taken lightly, that will make many of us dream of their lambos to me with what I most want to buy some good soon and achieve financial independence as soon as possible, and Why not the early retirement that we long for so much wow, see us, we already reached US $ 1.00 in price, that is to say, it was something that we did not see many today they pull their hair for not having entered, I entered thanks to you with just 1k but It was a great bet, that allowed me to grow and learn a lot.
Yes, Wall Street is looking at us and has only entered BTC but little DEFI but they will come I'm sure.
I am going to review Kyle's proposal to be up to date, hopefully he receives support and takes us further than we are reaching for now.
Accumulate digital assets hopefully they will be worth a lot in the future, here in leo we have that we have gotten into the world where there is money and those guys will come here I am sure soon sooner than we think, last week I made a risky bet but that would be the Life without risks, I see that the risk has been amply rewarded.
Well with those rates and as someone said why banks want to ban crypto in Nigeria, simple because they are giving power to people without a voice, that share of unbanked and excluded is what the blockchain is taking away from the financial industry And maybe that's why they will be starting to fight in it.

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that was one hell of a comment :)

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He is good for that. Need to get him into the @leomarkettalk room. The average words per comment would top 100.

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They would lol :)

I love to comment Man specially when people give us a great advices.

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It is best to look further down the scale.

If we have missed the opportunity with Bitcoin then Alts and many projects have given us the opportunity again

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DeFi breaks the entry barrier for common man to get into the world of Finance & Investment. Remove the middleman (Banks, Big Corporates & Government) and increase the APR for investors.

DeFi is mimicking the financial system we have now.

With the evolution of Blockchain Tech, more innovative and impossible things can be done in the near future. Even I am really excited what the Young Blood (2nd & 3rd Generations) would do with something powerful like this. Possibilities are endless @taskmaster4450. Great outlook on the future of Finance.

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By the second and third generation, there will be features that we cannot even imagine at this time.

It is going to be amazing to see what is developed over the next couple years.

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Haha, True. Looks like I went too ahead in thinking of the future. Even the near future would surprise us. Let's hope for the best 🙏

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Crypto encompasses many projects as you
exemplify in your post. It is another
twist in the financial world where
anyone can participate willing they want to learn.
Hope the best for Hive in the incoming days.

!BEER

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And for hive it makes me look happy.

Social media/ communication + finance app. WOULD(with real smart contracts)/IS(LEO) BE SOOOOOOO COOOOOOL!!!!!!!!!!!

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Certainly a wonder union you are putting together there.

It is the future I believe. Social media and finance are blending. Hive can be at the forefront of that.

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totally agree with you.

2025 right? :D

cross-chain integration
This will cause a great revolution here
But you know still need some marketing

We look like the artist who paints wonderful paintings and keeps them in his home that no one sees except his household

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Interesting...

I wish I could see DEFI based on HIVE SMART NETWORK

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The more reliable the system, the more money there will be!

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Always going to be scams, 2017 was loaded with them and the days before that were even worse. Heck even Fiat currency has is good share of scams so it just comes with the territory of money. DeFi on legitimate platforms and backing however will thrive it will just take a little time. Honestly Cub has millions if not Billions to still go in TVL compared to other DeFi projects.

We are seeing the change now. Next few years are crucial as lot of developments going on and make technology more user-friendly and interpretable.

kyle is gonna make us all rich :D

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DeFi is a system that provides financial products and services to people outside the present financial system. However, it looks like it can add another layer to what individuals are doing that the existing one does not: the ability to create income/wealth to get involved.

@taskmaster4450 yeah you are right sir,Defi is a sector that should never be ignored in the financial system and it has the main structures needed to have a better financial world....

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Yesterday, we saw a proposal put forth by @klye who is looking into pulling what is done on Ethereum and BSC to Hive. This, if accomplished, will offer the potential for cross-chain integration. Essentially, it could be thought of "anything they can do, Hive can do". The best part is that it will utilize HIVE for all transaction fees.

OMG, this would be insane. Only thing I worry about is that by the time it arrives, the Defi craze would have settled down and Hive would have missed the hype train. Seems like there's so much luck in crypto of having the right product at the right time. I think timing is even more important than having the best tech.

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The world of DeFi is just getting started. We are in the first inning of the game.

This is a multi-year process.

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It was thanks to leofinance that I came into contact with the Defi world. A few days in Cubfinance and I was really impressed by the potential of this sector.
Getting rid of third parties that I define as parasites such as banks would be a great achievement for our beloved decentralisation.
Your posts are always interesting
!BEER

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Yes... we need Defi on Hive. Why not ?

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I am really, really, really glad that this is a big FU to traditional banking. You know my story, so you'll know I hate them fuckers.

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Seems engagement is the way to go on this platform. I love it. It's what I miss about being a mainstream writer. But it seems this is the place to be! So you get two comments from me! :)

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