In 2019, decentralized finance (DeFi) became the buzzword of the cryptosphere. In 2020, DeFi is expected to gain even greater momentum and push the crypto community towards a more decentralized future.

Introducing DeFi to the Crypto Community

According to Finance Magnates, the DeFi movement began when people started to use decentralized lending platforms on Ethereum.

“The DeFi movement started by the development of decentralized and trustless lending platforms through Ethereum smart contracts,” said Micha Benoliel, CEO and Founder of IoT connectivity provider Nodle.

“People then developed alternative financial services such as synthetic assets (for example gold, diamonds, other currencies), derivatives or even decentralized exchanges,” he added.

In 2019, crypto lenders reported massive growth from Q1 to Q2, with Graychain statistics revealing that Compound, Dharma, dYdX, Maker and nüo experienced a total increase of 239.84% in the number of new loans — from 5,462 to 18,562 — as well as a 145.7% increase in new loans quarter over quarter — from US$64.8 to US$159.3 million.

Stepping Towards a Decentralized World

However, with all the movement in the DeFi community, the financial industry may not be ready for a totally decentralized world any time soon. Dan Schatt, Co-Founder and President of DeFi company Cred, stated:

“To some, [DeFi] represents the ultimate dissolution of all financial intermediaries, in the same spirit that Bitcoin was created. The reality is that the world of finance is moving on a continuum, some faster than others towards decentralization. We aren’t there yet. Today, most would not trust your finances with a purely decentralized custodian.”

“However, most agree that the DeFi solutions most poised to support mainstream customers are those that deepen and blend competencies associated with blockchain, capital markets, lending, borrowing and merchant services,” he added.

Source: https://www.financemagnates.com

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