In the last two years, DFI has probably become the most interesting event in cryptocurrency reality. The rise of this new star is closely linked to Ethereum, the second largest cryptocurrency network by market capitalization, over which almost every existing DFI application runs. The truth of the matter is, Ethereum is not only a digital resource that allows you to migrate to a blockchain network but also a complete ecosystem in which you can provide services and perform more complex tasks, such as writing smart contracts. Both of these functions formed the basis of the emergence of the DFI phenomenon, which ultimately spontaneously responds to the request for independence of financial services and the equal provision of any participant in the ecosystem, regardless of social status and geographical location.
In the last one year, the market capitalization of DFI has increased almost 60 times to reach a height of 130 130 billion and the total value of user deposits (total value locked, TVL) has increased almost 100 times, reaching about 100 100 billion. Many analysts predicted the fastest decline in the history of the industry, but DFI endured the problems it faced for its underlying network. The cryptocurrency market is being overloaded with transactions approved for a general correction, which has reduced the cost of the first cryptocurrency and, with it, the remaining crypto assets in the spring and summer of 2021. Despite all the negative events, DFI continues to grow. What was the basic driving force behind this growth?
The art of cutting barriers
The cool feature of DFI is the elimination of middlemen from its financial process. CeFi (centralized money), the confidence of a transaction is provided by an intermediary: a bank, a stock exchange, a brokerage office, a settlement center, etc. .
Everyone is more or less familiar with the flaws of these companies: because of their complex and demanding structure, they exclude more than one billion inhabitants of the planet from economic life and the high commissions they charge customers do not guarantee fast or hassle-free transactions. Often transactions, especially international ones, can be delayed for no apparent reason, and some of them may be considered suspicious. All of this leaves the feeling that your money is not yours, that someone is disposing of your funds at your own discretion.
This situation, however, has changed drastically for blockchain – a transaction register protected from unauthorized access, distributed among users, and not everyone and especially no one at the same time. Due to its decentralization, a common transaction log serves as a common source of truth for all network participants. And if some network participants are motivated to give their free funds to others, while others take these funds as a loan from a bank, there is no need for intermediaries: the role of the trusted group is played by the blockchain itself, and a self-executed smart contract guarantees fulfillment. . This applies to any other economic interaction – insurance, the provision of stable assets backed by currency, or the unique benefits of protocols, even the sale of unique works of art in the form of NFT tokens.
The uniqueness of DFI is that users of decentralized applications (DApps) are released not only from real-world financial intermediaries but also from central crypto platforms that require verification of their identities by disclosing their personal information, which is a violation of the basic principles of cryptocurrency. Not to disclose.
DFI, with its decentralized exchanges (DEXs), allows its users to trade without any other restrictions, such as identity verification, interference with anti-money laundering regulations, or the imposition of centralized exchanges.
Defy is more than fintech. Most fintech projects are a digital shell that covers old systemic phenomena. DFI, on the other hand, operates on a completely new basis because it gives people complete freedom to choose their path in the financial world.
Of course, DFI still faces problems. For example, with the popularity of Defy, the crowd of Etherium Core networks itself gives rise to many transactions, resulting in high fees. On top of that, many applications still have awkward, inexperienced user interfaces. As such, DFI can be considered a common local phenomenon, which can only be accessed by people in the crypto world or those who specialize in technical subtleties. Because Defy is still tough for those who are far from being tech geniuses. These are important issues that need to be addressed, and anyone who overcomes these obstacles will be the winner.
How the LocalTrade Ecosystem solves the stress problem of DFI
In fact, despite the explosive growth, DFIs are still out of the focus of most financial market participants. This will no doubt soon change thanks to the LocalTrade platform – a universal cryptocurrency exchange and an ecosystem of financial products that aims to bridge the gap between traditional cryptocurrency and the cryptocurrency industry.
The LocalTrade ecosystem includes a full-fledged centralized trading platform and a decentralized financial platform for investing called Defy Lab. The combination of CFI experience and strong technical infrastructure with the capabilities of DFI, attracts local traders and investors from the field. If they wish, they can join the world of decentralized money as easily as they will work with traditional theoretical financial products that they understand.
LocalTrade wants to be the first platform that will allow everyone, even those with only a Fiat Bank card and $ 10 in their account, to gain unrestricted access to the most profitable DFI and CFI products. How is this possible? Utilizing the power of CEX, LocalTrade simultaneously simplifies the process of investing in DeFi products and makes these investments more secure. This part of the localtrade ecosystem is called Defy Lab, and includes Neobroker Smart-Fund, Defy Wallet, a launchpad for crowdfunding, as well as last year’s trend-yield farming, and more. The products of LocalTrade are absolutely unique, so let us briefly describe the essence of the innovative functions that you can access on the updated LocalTrade platform.
DFI equipment of LocalTrade
LocalTrade’s DFI Wallet is not your everyday wallet, but a product that will allow you to promote Defie and make it mainstream. It is a smart multi-currency wallet for mobile devices with an intuitive interface, complete personal and confidential with 100% storage of data locally on the user’s device, complete data encryption, 2FA, and biometric authentication for enhanced security. You can set up commissions on wallets, but its killer feature is the ability to exchange assets from different blockchains within the same application. This particular option creates the world’s first decentralized crypto wallet with a cross-chain exchange functionality.
LocalTrade’s Defy Lab is categorized by category based on a set of specialized digital tools designed for investment and their risk factors. Defy Lab is designed to meet the needs of users and is available to all retail investors. These tools are available to investors with different levels of DFI knowledge, ranging from professionals to beginners.
- Neobroker Smart Funds allow users to invest in company shares prior to their initial public offering (pre-IPO), thus becoming co-owners of such companies.
- The Yield Cultivation Protocol provides users with high APY rates for their resources, which will be used in liquidity mining through various DFI projects.
- Token Cell InvestPool is a solution that allows users to purchase tokens from crypto projects that are currently in the pre-sale / ICO stage for better returns.
- LocalTrade Launchpad is a tool for more sophisticated investors, aimed at supporting and promoting cryptocurrency projects, as well as giving investors the opportunity to buy tokens during IDOs, at the lowest possible price.
All projects managed by LocalTrade’s DFI Lab undergo rigorous verification and auditing of smart contracts to identify potential risks and thus prevent users from investing in intentionally fraudulent projects.
There is also the opportunity to make money on the platform using the LocalTrade Token (LTT), a BEN-20 standard token that is issued in the Banyan Smart Chain. The LTT token combines utility and governance functions, strengthening the entire local trade ecosystem. As a link between the LocalTrade CEX and DFI platforms, LTT includes a unique token model and is used in a variety of platform applications. There are several ways to make money with LTT:
- Stacking, through which users can join the DAO sharing economy and participate in platform management.
- Receipt of fees to attract new participants.
- Adding LTT to liquidity pools and getting rewards for cultivation.
The LocalTrade Visa Card and NeoBank application are other LocalTrade products that allow you to use crypto while still enjoying the full benefits of Fiat money. The card instantly converts cryptocurrency into fia, after which you can pay for any purchase. At the same time, cashback is provided on LTT tokens for card usage. Also, the card allows you to withdraw cash from any ATM.
If Bitcoin was the spark of the financial services revolution, then Defy was the catalyst for this process. The companies that bring DFI into the mainstream are doing a huge service not only to the world of technology, but to the entire human society. This is exactly the work that LocalTrade itself has undertaken, providing its users with a complete set of tools that will allow them to enter the world of DFI as easily as possible. On the platform, LocalTrade conducts step-by-step training to master DFI within its university structure. Upon graduation, students will not only get a clear idea about DFI, but also invest in traditional theoretical financial instruments and in general.