What is defi?

Defi is the general name given to decentralized financial transactions consisting of decentralized and finance (finance). Defi is the name given to financial structures that are not bound to any center or authority.

Systems such as Bitcoin and Ethereum, such as non -central and decision -making authorities, are ideal examples for defi. However, since financial tools are not limited to sending and receiving money, it will be correct to bring more advanced financial functions to mind. Among them, we can count credit, loan, decentralized stock market, insurance, shopping, marketplace and the like.

Defi structures should somehow reassure users. Although an unforgettable structure is interesting, this can be used for malicious purposes. Bitcoin defi structure was provided with a math formula that is not disturbed and changed.

There should be a reason - effect relationship in all defi systems. The procedures that can be performed are clear and under which conditions are clear which procedures will be performed. For this reason, smart contracts, decentralized applications and consensus protocols have an important place in defi systems.

What purpose did Defi occur?

Defi was initiated for the construction of a more democratic financial system after the emergence of crypto currencies for freedom. Another important purpose of defi systems is to ensure that people who do not have access to traditional financial systems can do their financial work.

Approximately 1.7 billion people in the world cannot access the traditional financial system, that is, banking transactions. It aims to access defi systems to these people whose existing financial system cannot access.

Although access to bank systems are physical obstacles, the insecurity of people in general against banks that are centrally is important.

What is defi difference?

Defi ensures that people who cannot trust the bank can be carried out by an authority not by an authority but through an algorithm of the system. It allows you to be made through a certain formula with millions of devices connected to defi networks. Therefore, it is impossible to intervene in a center in defi systems. The users of the system also ensure that the system can work.

In general, the advantages of defi systems are as follows:

It has led to the emergence of decentralized stock exchanges.
It has enabled the use of money -based banking systems by everyone.
It has enabled the borrowing and lending transactions between users.
It has provided a new crypto currency to the market and to collect funds for projects.
It has enabled newly available financial equipment to be used with defi.

What is the advantage of defi systems?

After the 2008 crisis in the world, many people felt insecure against banks and state central banks. The dominance established by a center in all finance instruments and a system in which even banks could harm at any time was very criticized.

The ability of governments to print unlimited money and change their values increased their interest in systems that no one can intervene through a certain formula.

Bitcoin was the most important being in this field. It was a defi structure that could be used and managed by the inclusion of thousands of people.

With Blockchain, which is not needed to be the central authority, the financial field has become more free. Users can maintain their own assets and send them to someone else without intermediaries.

What are the defi usage areas?

Defi claims that it will offer a better system than traditional financial systems. For this reason, there are advantageous usage areas from traditional financial systems. These are generally:

To be able to transfer very cheap, fast and safe money all over the world.
With the borrowing systems established, users can both borrow and lend.
To tokens an existence of a being. Thus, it is both valued and transferred to that being.

What are the disadvantages of Defi?

Defi will radically change the traditional financial understanding in many aspects. Being at the beginning of this change is still in some areas of this system.

Defi systems have two aspects that may be missing. Although it aims to be available throughout the world, the number of people who use defi for the time being is very small.

As a second problem, so many processes should be kept in some way as data. There is not enough infrastructure for the preservation of this data.