DeFi, or decentralized finance, is a term that refers to the use of blockchain technology and smart contracts to create financial services that are transparent, permissionless, and interoperable. DeFi has been one of the most innovative and disruptive trends in the crypto space, offering new ways to lend, borrow, trade, save, and invest in digital assets. As this innovative phenomenon meshes into the mainstream world of finance and investment, ordinary investors will experience its impact.
DeFi: The Bigger Picture
According to data available at Statista, the worldwide decentralized finance (DeFi) sector is set for substantial expansion, projecting a revenue of US$17,740.0 million in 2023, with an anticipated 15.86% annual growth rate leading to a total of US$37,040.0 million by 2028.
It’s projected that the sector will produce an expected average revenue per user (ARPU) of US$1,064.0 in 2023, reflecting the thriving economic activity in the DeFi space. As the sector evolves, the user base will reach 22.09 million by 2028, underscoring the widespread adoption of decentralized financial solutions and its transformative impact on traditional financial paradigms.
What is DeFi and why it matters
DeFi is a movement that aims to create a more open, inclusive, and efficient financial system, not controlled by any central authority or intermediary. DeFi leverages the power of blockchain technology, which is a distributed ledger that records transactions in a secure and verifiable way; and smart contracts, which are self-executing agreements that enforce the rules and terms of a transaction.
By using blockchain and smart contracts, DeFi enables anyone with an internet connection and a compatible wallet to access a variety of financial services without having to rely on traditional intermediaries such as banks, brokers, or exchanges. This means that users can have more control over their own funds, data, and identity, as well as benefit from lower fees, faster transactions, and greater transparency.
Advantages of DeFi to the World of Finance and Investing
DeFi has emerged as a groundbreaking paradigm shift in the financial landscape, revolutionizing how individuals engage with the global financial system. This innovative approach leverages a range of technologies to offer a myriad of benefits,…
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