Opinion: Five reasons why DeFi is so popular.

DeFi (Decentralized Finance, Decentralized Finance), aims to allow anyone in the world to conduct financial activities anytime, anywhere.

Since 2019, DeFi has become a long-term hot topic in the blockchain industry. To this day, the development of DeFi still affects the financial market and the blockchain ecosystem.

Just as it is difficult for many people to understand blockchain technology, DeFi also has a cognitive threshold. So, how do we systematically understand "decentralized finance"? What kind of value makes DeFi so influential and popular?  

Opinion: Stablecoins are an innovative mechanism for global investors to seek exposure to the US dollar: Encryption Valley published an article "Data 丨 The Explosive Growth of Stablecoins in 2020", showing that in recent days, the scale of stablecoins has increased by nearly 3 billion US dollars, totaling More than 9 billion US dollars, reaching an all-time high. The article believes that this is because stablecoins are an innovative mechanism for global investors seeking exposure to the U.S. dollar, and at the same time also undertake the role of cryptocurrency volatility hedging and act as a bridge between trading platforms.

According to the article, a Wall Street Journal article from March, "The World's Hunger for Dollars," said global investors were dumping assets and paying big bucks to swap local currencies for dollars. During financial crises, the demand for dollars has historically increased during "flights to safety". Stablecoins are an innovative mechanism for global investors seeking exposure to the U.S. dollar. 24/7 transfers to countless personal cryptocurrency wallets or global trading platforms.

And there is no concept of any national borders, anyone in the global cryptocurrency ecosystem can obtain and hold it. The article also believes that compared with traditional banking, stablecoins maintain multiple advantages: First, it is easier to set up a cryptocurrency wallet than a bank account, especially for people outside the United States. The second is that DeFi allows stablecoins to be borrowed, lent and used as collateral programmatically. [2020/4/28]

In August 2018, when Brendan Forster, the co-founder and CEO of Dharma Labs, proposed the concept of DeFi, he had the belief that decentralized finance would become the mainstream in the future.  

Opinion: Optimistic about the situation after the halving, the bull market will definitely come: On the afternoon of April 23, XBIT held an online AMA "Industry Big Data Analysis Halving Market" live sharing, and invited Alina, the person in charge of the OKEx mining pool, and Zhuang Zhuang, CEO of BTC.com , Bixin Mining CEO Liu Fei and Innosilicon Sales Director Wang Shenglin.

The four guests were optimistic about the trend of the currency price after the halving, predicting that the bull market will definitely come. The wet season is coming, and Liu Fei believes that the overall supply of mines this year will exceed the demand. Wang Shenglin said that the production and deployment of core mining machines will not be affected by the haze of the epidemic. In addition, Alina believes that the current period of competition is the most intense since the establishment of mining pools. Although a stable pattern of three pillars has been formed, the explosive power of rising stars should not be underestimated. In recent years, the computing power of the entire BTC network has maintained a long-term growth trend. Zhuang Zhuang believes that computing power will not affect the currency price, and only the advancement of mining machine technology can promote the gradual growth of computing power. [2020/4/23]

Today's financial system is mainly controlled and regulated by the central system. DeFi hopes to establish a transparent, accessible and inclusive peer-to-peer financial system through distributed open source protocols, so as to reduce trust risks as much as possible, so that participants can Get financing easily and conveniently. The vision of DeFi is that all assets can be tokenized and traded freely in the global open market.  

Scene | Opinion: Encrypted assets are still the major asset class with the greatest appreciation potential: Jinse Finance live report, on October 9th, BlockVC and bluewater jointly held a roundtable meeting on "BVC Summit Forum-Panorama and Future of New Asset Management". In the roundtable discussion on the theme of "Asset Allocation Offensive and Defensive Way - Global Secondary Market Trend Outlook", the participants deeply analyzed the challenges facing the global economy and looked forward to the new opportunities for the next decade of macro asset allocation. They believed that: Encryption Assets are still the major category of assets with the greatest appreciation potential, and the internationalization of digital renminbi has great prospects. In addition, how to attract traditional institutions and old money to enter the market is not only a key challenge for the future trend of new asset management, but also the core driving force for the rapid development of the industry, which contains extremely imaginative business prospects. [2019/10/9]

The main reason why DeFi projects have become popular in a short period of time is that people no longer have to rely on decentralized banks or specific trust to interact with another party. Users can trade 7*24 hours, and the settlement is relatively fast. In contrast, traditional financial settlements, especially cross-border transfers, have very cumbersome steps and high handling fees, and it takes many working days to arrive at the account. On the other hand, DeFi can bypass the intermediate carrier that earns a lot of profits, and complete the payment from A to B at a faster speed and with lower handling fees.

Now, DeFi's decentralized finance is applied to payment, lending, stable currency, decentralized exchange, pledge mining, etc.  

1. The operation is simple and easy to understand: Compared with traditional finance, the operation of decentralized transactions is simpler.

2. Cross-border payment: DeFi is global, and you can engage in financial activities no matter where you are in the world.

3. Higher privacy and security: Based on the anonymity of blockchain, DeFi also has higher privacy. It's also safer.

4. Broader global financial services: Everyone can conduct decentralized transactions through the Internet, and decentralization allows everyone to enjoy the same financial services.

5. Anti-censorship transactions: decentralized transactions cannot be closed by centralized institutions, and transactions cannot be changed.

In addition, DeFi decentralized exchanges (DEX) are also challenging traditional centralized exchanges (CEX). Recently, the 24-hour trading volume of Uniswap, the leader of DEX, surpassed the mainstream centralized exchange Coinbase for the first time in history. Although Coinbase is not the number one centralized exchange in the world, its position in digital asset finance has undoubtedly been shaken.  

Of course, the fire of DeFi is not only due to the characteristics of its application scenarios and protocols. The growth of value must be the result of the right time, location, and harmony.

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