DeFi or “Decentralized Finance” by its meaning in English , is a new economic-financial paradigm by which a network in the style of the purest crypto-economy would (among other things) act as a means of transmitting money , financing, and decentralized exchange script the most globalized finances from a provider of financial or money services, to a consumer of the same . And all seasoned with what is really the true invention that came with Bitcoin: distributed accounting and the disruptive Blockchain .
Those DeFi would come in most cases from the hand of their good dose of crypto-anonymity, but also from decentralization as its name suggests. And it is that DeFi would theoretically allow citizens to “finally free ourselves” from what some consider the dictatorship of banks and large financial institutions (which can often be).
Of course, these big players often exercise their enormous power without mercy (and with their vested interests), but it is no less true that it remains to be seen that in practice with DeFi we are going to be as financially free as the theory says. . It really depends on ourselves as a socioeconomy, because it is not so much DeFi that really matters, but much more its implementation .
The liberation would be very good if it were effective (and efficient), but for some it is even no longer a question of liberation, but of merely gaining access to finances.
So far we have put in the DeFi equation the necessary ingredients of real globalization, and not the simply relocation “by force” so self-destructive, which is what we have mostly seen so far as we anticipated almost a decade ago. . But it is also in the essence of DeFi to provide (much more) universal access to financial services for ordinary mortals, Uniswap clone software and not only for the most privileged and developed. And this is a point that is far from little, since you remember that in the developing world there are still millions and millions of people who do not even have the possibility of holding a simple bank account, and for which the technology had already been providing some solutions that have even madethose developing countries advanced in some aspects even the most developed at the time .
DeFi is really any type of financial product, contract or service provided in a decentralized way, that is, eliminating the need for financial intermediaries, a role that was (lucratively) necessary in the traditional financial system. DeFi really began with the birth of Ethereum and its smart contracts , since in the end (almost) every financial product or service has to be regulated by means of a contract, which if it is smart and based on a decentralized network such as the Blockchain itself, Well, that is DeFi in its purest form.
But much more has already been built on that basic and initiatory concept today, enriching the portfolio and the DeFi ecosystem with numerous new concepts, proposals, and specialized platforms. Examples such as Uniswap, Chainlink, Dai, Maker, or Compound can be counted among them . And as you will be able to see as soon as you investigate the DeFi ecosystem, Ethereum is no longer the only network that is catalyzing it, since there are already other very promising decentralized networks such as Stellar, (soon) Cardano or Algorand , just to name a few, that already they also incorporate smart contracts among their native functionalities.
Although there are many other such disruptive proposals, the truth is that, at least as regards the largest war front opened by DeFi on the lines of the adversary, which is the traditional financial system, Uniswap clone the DeFi battle par excellence orbits around to the banking-financial activity par excellence (with permission from the trading of titles in the markets): the lending of assets, money, and financing. We will therefore focus today’s analysis on this specific type of DeFi, which is the lending activity due to its special importance as a protagonist, not without stating that the concept of DeFi also covers other important financial subsectors such as financial intermediation, the insurance business, derivative products, or the same crowdfunding .
