Defi (Decentralised finance) is a financial service based on a public blockchain system without the intervention of a centralized entity, with Defi users can perform all the tasks that usually they do with a banking network like trading, Borrowing, lending, and other financial operations.
How Efficient Defi is to outperform centralized finance
An anonymous person Satoshi Nakamoto created Bitcoin and simultaneously he laid the foundation stone for Decentralised financial operations. Today Defi is primarily Ethereum.
Gradually, different developing and developed nations are embracing the rapidly emerging DeFi sector. Developing nations like El Salvador have accepted Bitcoin as legal tender, while numerous countries are also showing interest to adopt digital assets along with their conventional financial system. It shows faith and the future of the world in decentralized finance.
Defi is very friendly in use, unlike conventional banking. Users aren’t required to go through the paper documentation work to open an account. Anyone can get access to it by creating a wallet. Users are not supposed to provide their personal information like name, Identity Proof, and email address.
Defi discards the control of third parties on transactions, which means Defi can’t be regulated by the country, financial authority, or central, it has uniform laws for all users across the world.
Centralized Financial systems are controlled and monitored by the state department, it also has high service charges and whenever it goes for maintenance it shuts all services which are not convenient for users.
Another limitation of the centralized system can be learned with an example: India has developed the Rupay card system which is acceptable in a few countries like UAE, Singapore, Bhutan, and Nepal, so Rupay card holders can make payment using their Debit/Credit cards. Now this payment system is limited to a few countries therefore users will not be able to use a Rupay card where it is not accepted. Defi has no borders and user can access their wallet at any point in time anywhere on the globe.