Banks Being Replaced By DeFi
Banks Being Replaced By DeFi
When you start looking into the banking system with all of its fees and loopholes you start to get a sense of how rigged it is to the common person busting their butt off day in and day out. Fees, penalties, low interest rates on the money they loan out for big bucks and so on.
The world of banking, big governments and international corporations has seriously destroyed the possibilities of many to actully be able to retire one day. These wasteful systems have many grey and hidden areas that many in the public don't know about.
Credit cards, Banks, personal loans, bonds and fees are all system that care nothing about the person but instead to their share holders and ultimately their bottom line.
What if there was a better way? What if you could instead become the banker yourself and thus the wealth of a few would now be divided up into the wealth of many.
It's possible... It's done through DeFi which continues to expand and grow.
DeFi is quickly changing the landscape but with anything new there will be issues that come up. This stems from rug pulls and poorly optimized and constructed DeFi systems. However there are also many legitimate projects which are quickly expanding and improving the DeFi space.
What started with just liquidity providing for swapping one token for another and collecting a fee has created many other systems such as IDOs. This era was considered DeFi 1.0 and had some rather limited capabilities.
In many cases these first DeFi platforms simply keep printing a inflation of their coin and then try to offset it with demand and fees. While this sounds great at first if people stop using or use the platform less that inflation can quickly run away from you and very well never recover.
Thus was born DeFi 2.0 which takes lessons learned of DeFi 1.0 and applies them. Many of these newer systems have reduced inflation rates which is a good step but the real power comes into offer more options such as a bank would. These include bonding, loans, swaps, your defi 1.0 fees and more are being developed on these chains.
Another thing we also notice with these defi platforms is the increased use of stablecoins. Ones such as Tether,USDC, UST, DAI and a new addition I want to talk a little about called HBD.
HBD is a decentralized stablecoin and I believe the first of its kind. It offers a awesome 20% APR right now however plugged into a DeFi platform such as PolyCub Defi - Polygon (MATIC) Network This farm is paying out at the time of writing this 61% APR for a PHBD (which is the polygon wrapped version of HBD) and USDC which is coinbases stablecoin.
These new improved systems for DeFi are just starting and getting figured out. They also still have older DeFi 1.0 elements to deal with but within just a years time we have seen a major shift and overhaul of the defi network and the possibilities it presents to all people. I also feel like a decentralized stablecoin has been needed for a long time with full transparency and that's something HBD now brings to the table. It wont all happy over night but right now is the ground floor of something that could be great!
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The way Banks are charging us is high,is better we create our own bank online.
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True, and with Hive we have exactly that, and a decentralized and pseudonymous one :-)
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Yes
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Nice one. It's just happening slowly and underground and Crypto is changing the traditional systems as we know them.
It's till recently I come to realize how DeFi is similar to traditional banking but better.
If DeFi systems can reduce the ambiguity and learning curve needed to adopt them, trust me, the adoption will be massive. Though, it is still hard to build trust levels as much as traditional banks have, but time will tell.
It has a good shot at replacing sections of the banking system. Those who delve deep into it see where a lot of this is going. It is going to require a lot of infrastructure.
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That HBD APR is just crazy..it's got to be one of the best out there in defi space.
Terra's Anchor APY is still amazing being 19.51% but HBD beats even that as it's APY is 22.13% if I've calculated it right.
Yay! 🤗
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Hahahah the banks take advantage of the poor or the great majority of the population and only favor a small minority, and obviously with DeFi this is changing and that is why there is a lot of panic around. It would be interesting that the banks stop being something useful and begin to take other ways to avoid extinction.
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Heellooo fabian, and nice to LeoFinance you! :-)
I see your point, nevertheless I would rather pursue that banking system extinction :-) Look at the recent Canadian case, where several banks have frozen (stolen) their clients funds, in a decision backed by the State, on the basis of those people's political orientation... I'd doubt that banks can be reformed: as centralized entities, they'd better disappear.
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Thanks for this DeFi space overview, @bitcoinflood!
I've unbanked myself for more than 15 years now, in a process to avoid all the hassle coming from having to deal with those legalized robbery establishments. To live in El Salvador has eased the move, above all with the excellent "HiveLightning" dApp as an icing on that cake (it allows us to convert Hive or HBD to BTC, and to cash it out without a bank account).
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