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Writer's pictureLeesa daisy

Major Use Cases of DeFi



Borrowing and Lending

In the DeFi system the peer to peer Borrowing and Lending is most widely used as it allows the users to take up loan without any applications review. In some of the DeFi DApps, the Smart contract itself acts as a lender and the interest will be calculated based on supply and demand.   

Asset Management

The user will be the soul custodian of her/his own crypto assets. One can easily interact with Decentralized applications for buying, selling and transferring the cryptos in the crypto wallets such as Meta Mask.

Gaming

The Ethereum based games has become more popular recently and the use of DeFi protocols directly in the Gaming DApps has made it more approachable. Eg- PoolTogether

Identity Management

This provides solution to the data privacy of personal information along with open access. User with the interent can access to the information from anywhere around the world.

Insurance

The involvement of DeFi in the Insurance assist the users in buying coversage and protecting their holding.Eg- Nexus Mutual

Predictive markets

The DeFi involves Decentralized predictive markets, insurance and on-chain that is fully automated. For Eg- Augur- a betting platform with prediction markets.

Stablecoins

The Stablecoins has now found a significant place in the DeFi system for lending, borrowing, remittance payments and also for institutional applications like Central Bank Digital Currency. It was initially developed to to decrease the price volatility of Cryptocurrency and to make blockchain a user safe payment method.

Synthetic Assets

These are the crypto assets that offers exposure to other assets like gold, cryptos and fiats. These synthetic assets are collateralized by tokens which are locked into Ethereum based smart contracts which comprise of built in agreements and incentives. Eg- Synthetix

Decentralized Exchange

As we know that the Decentralized Exchanges involve peer to peer transactions of funds  without a central authority. The Assets are not in the custody of exchange platform because of which the risks such as hacking, price manipulation an thefts are reduced. G- Uniswap, Liquality etc.

Tokenization

Tokens are assets issued on a blockchain network that proposes security and instant transfer of funds. These tokens are like fuel to the network, helps in reducing the transaction fees while using them and also unlocks various other economic possibilities.

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