With the disruptive digital transformation and Industry 4.0 growth, the traditional financial model is getting inefficient. Individuals and companies from multiple domains are shifting to a decentralized finance ecosystem. With plenty of cryptocurrencies, exchanges, and wallets, DeFi or Decentralized finance is becoming the next big thing.
DeFi is a broad term used for a wide range of financial applications in the blockchain or cryptocurrency domain, which can disrupt the traditional financial intermediaries. The majority of DeFi applications have blockchain as their foundation, which enables core decentralization. DeFi applications follow a distributed ledger concept in which several entities are present to copy, hold, and validate the transactions. It makes transactions secure, transparent, and quick.
In 2021 and beyond, where businesses seek robust ways to scale their businesses, DeFi will bring the most significant paradigm shift. On this note, let's check out the primary reasons why companies will thrive in the digital era leveraging DeFi technology.
The most significant advantage of DeFi applications over the conventional methods is that it's highly accessible and anyone can start using it in no time. Anyone with an internet connection can leverage any DeFi app to buy, store, and sell their cryptos at significantly lower transaction charges. DeFi is a boon for businesses across multiple industries as they can perform faster transactions and save substantial capital in the long run.
As the DeFi applications are based on blockchain's distributed ledger framework, no centralized authority has any control over your crypto asset. Businesses and individuals have complete control over their assets which is not possible in the fiat currency system. Companies can set up their cryptocurrency exchanges and allow their customers to perform transactions without paying third-party vendors.
This freedom of ownership and the ability to do faster transactions globally will play a more prominent role in making DeFi mainstream in the upcoming time.
With rapid digitization, individuals are more concerned over how their traditional financial bodies operate and manage their capital. However, DeFi applications are changing how individuals and even banks manage finances, and now everything has become more transparent. As every transaction is done through decentralized finance applications and it is publicly visible, transparency improves significantly.
In the upcoming time, we will see more traditional banks adopt DeFi applications and offer the choice to use this new ecosystem to all their customers. Those who are willing to adopt decentralized finance and looking for trustworthy options, then this move of the banks will become a boon for them.
Complete autonomy is among the core reasons why DeFi applications will thrive on innovation in the future. As it's a distributed ledger system, the whole ecosystem is self-sustainable and doesn't require the support of centralized financial bodies. It makes the complete system tamper-proof and eliminates any financial forgery in the system.
As every node of the framework is a copy of the latest and historical transactions, it becomes impossible for hackers to modify information. For making any changes in the previous transaction, the hackers would need to own and control at least 51% of the nodes, which is impossible.
As the DeFi innovation is open source, the scope of better innovation amplifies, and anyone can participate in making the financial system more efficient. In the future, we will see innovative approaches towards establishing highly efficient economic procedures that will eliminate serious loopholes like money laundering.
Grow your business with DeFi applications
Regardless of their size and industry, businesses can opt for Defi advancement and make their transactions more secure, fast, and reliable. These applications will act as a growth catalyst for companies to help in faster customer onboarding, minimum third-party dependency, and higher transparency.
How Seven Bits helps businesses grow with DeFi
Seven Bits is an innovative and leading digital transformation agency that offers robust DeFi development services for businesses. With the support of multiple public and private blockchain frameworks and years of experience, we transform your business by making it more scalable, future-ready, and robust.
Our Blockchain Center of Excellence (CoE) team understands your business and prepares a bespoke transformation plan to meet your every business goal. From streamlining the finances to cryptocurrency exchange development and migrating the legacy system, we have you covered. Get in touch with Seven Bits' blockchain experts at firstname.lastname@example.org to explore more about DeFi and how it can help you grow the business.