An experiment in writing 100 words a day:
“DeFi” – or decentralized finance – is an emerging area of cryptocurrency applications. These applications implement concepts from traditional finance like lending, derivatives and insurance on the public ledgers available to anyone with an internet connection. We expect to see these new iterations offering varied products and services to a growing user base at better terms and rates than seen on the market today. This expectation is driven in large part by the unique position these applications find themselves in to leverage the underlying blockchain technology they are built on top of. The decentralized nature of these budding financial platforms ensures equal access to services and that opening an account is as simple as downloading an app. By transacting only in digital assets, DeFi products should be able to cut costs and remove unnecessary intermediaries while directly passing the savings on to the end user. And the fact that these applications are mostly built with composable software allows for a combinatorial explosion in applications that permits bewildering opportunities for experimentation in new financial instruments beyond those we have seen to date.