Decentralized finance is by far the hottest topic in crypto, touted as a way to make a fortune by backing the right token, but also a tool to take the crypto you were storing in a cold wallet and put it to work earning interest at a price. extraordinary. rates.
There is a reason why DeFi has grown so much and so fast that it has slowed down the Ethereum blockchain, where most projects live at a slow pace, and has caused gas prices for transactions to skyrocket to $ 10. , $ 50, even $ 100 sometimes.
DeFi is primarily talked about in terms of taking over the banking and brokerage functions in which big finance thrives, but the technology can be used to revolutionize many other businesses, from energy to e-commerce.
That reason is simple: At its core, decentralized finance is about cutting out the middle man.
Why give a bank your money, for a paltry fraction of 1% interest, to lend it, when you can lend it for orders of magnitude more through a crypto lending site?
Or invest in a liquidity pool that uses an automated market maker to create a shared pot of tokens that crypto traders can buy or sell, rather than waiting to find a trader who wants to buy what they are selling at the price they pay. . want. The way liquidity pools work is that liquidity providers lock funds into pools in exchange for fees paid on each transaction, which are typically paid in an exchange’s native token.
All you’re really doing is replacing the institutions that facilitate those transactions, the man taking it from Jane and giving it to John, with smart contracts that automate both the introduction and the exchange of currency. In other words, it turns a peer-to-peer transaction into a peer-to-peer transaction.
The difference is the immutable nature of the blockchain, which makes it impossible for either party to cheat. Because you are not confident, you do not need to pay a trusted broker to do it for you.
Financial transactions are the easiest fruit for DeFi, as they are very frequent and the value of the currency being traded is very large. That said, DeFi in its cash crop, share and performance formats can get quite complex. But that’s mainly because people are willing to do very risky things like gambling on the sidelines with borrowed money.
However, DeFi works for virtually any data that you need to transfer from one party to another. That can be e-commerce, insurance, digital identity, and even electricity; the possibilities are endless. And in most cases, they are quite simple.
Decentralized power is generating enough interest that it has been given its own nickname, DeEn rather than DeFi, even though it also uses DApps and smart contracts, and generally lives on the Ethereum blockchain. Aside from cutting out the middlemen (brokers and utilities), the only real difference is kilowatts rather than kilobytes.
A year ago, the German sustainable energy company Lition launched its decentralized, blockchain-based Energy Exchange, which allows individual consumers to choose exactly which source to buy their energy from cheap or green or local energy producers, whichever they choose.
It is up and running and according According to an energy industry publication, consumers are saving an average of 20% on utilities, while energy producers see their income increase by 30%.
E-commerce is another field ready to be disrupted by DeFi, and one of the companies that does it is Uquid, which aims to build a bridge between DeFi and e-commerce.
One way to do this is through your Defito Arm of finance, which focuses on buyer loyalty programs that use tokens obtained with each purchase or sale.
The site uses three techniques commonly used in DeFi trading, lending and mining operations and adapts them to the needs of an e-commerce site.
Shopping mining is a loyalty program that creates and awards freshly mined tokens with every Uquids purchase at many online stores, offering everything from video games and music to subscriptions for streaming services like Spotify and Xbox Live. This uses one of Defito’s native tokens, DeFi Shopping Stake (DSS). Once mined, these tokens are loaded into a smart contract that allows them to be used for future purchases on Uquid’s sites or to bet on liquidity funds.
Defito’s other token is the DTO, a governance token that can be obtained by bringing liquidity to the purchasing liquidity pool. Rather than making it possible for cryptocurrency merchants to buy and sell tokens, Defito’s groups represent digital goods on Uquid’s e-commerce sites ranging from games and trading software to gift cards and mobile recharge cards. An automated purchasing maker connects groups of goods from different vendors, allowing token holders to find and track the best prices for the quantity of those goods they wish to purchase. These sites accept cryptocurrencies as payment.
Both DTO and DSS can be used for betting and paying, but DTO provides government voting rights, including whether the DSS tokens should be burned to increase in value or used to develop the reward system.
Another DeFi token is Uquid (UQC), a decentralized ERC-20 token that can be used for a variety of more traditional DeFi services including participation, lending, lending, and token swaps, as well as goods including utility coupons, groceries, and chain pharmacies across the globe. world.
Finally, Uquid has recently added a fourth token for its new NFT market, NFTD. Non-fungible tokens are at the heart of a digital product marketplace where they can be used to provide buyers of digital goods with clear ownership rights. It is a Binance Smart Chain utility token targeting things like social media content from TikTok and YouTube videos to photos and music, as well as other digital content from Uquid.
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