{"id":3683,"date":"2022-02-14T11:00:00","date_gmt":"2022-02-14T10:00:00","guid":{"rendered":"https:\/\/alicebiometrics.com\/todo-lo-que-necesitas-saber-sobre-las-defi\/"},"modified":"2022-03-06T22:40:15","modified_gmt":"2022-03-06T21:40:15","slug":"everything-you-need-to-know-about-defi","status":"publish","type":"post","link":"https:\/\/alicebiometrics.com\/en\/everything-you-need-to-know-about-defi\/","title":{"rendered":"Everything You Need to Know About DeFi"},"content":{"rendered":"\n

DeFi is the umbrella term used to describe decentralized currency, or peer-to-peer financing through public blockchains<\/a>. This concept is set to disrupt financial intermediaries and change the way people transact.<\/p>\n\n\n\n

While most people know about cryptocurrencies, not many know what DeFi is about. This article takes an in-depth look at DeFi, including the benefits and risks involved.<\/p>\n\n\n\n

What is DeFi?<\/h2>\n\n\n\n

DeFi is short for \u201cdecentralized finance,\u201d which is any financial application that falls in the blockchain framework.\u00a0<\/p>\n\n\n\n

DeFi takes the concept of simple transfers to more complicated financial uses. These transactions are peer-to-peer, which means it\u2019s done directly between two people, with no middleman.<\/p>\n\n\n\n

\u26a0\ufe0f Blockchain is the technology behind cryptocurrencies like bitcoin and ethereum. It holds public records on various decentralized servers of any transactions. This means no centralized institution controls the transactions, or, put simply, no bank controls the transactions.\u00a0<\/p>\n\n\n\n

Why is DeFi Important?<\/h2>\n\n\n\n

DeFi creates an alternative to traditional finance solutions, taking control from entities and giving it back to the people.<\/p>\n\n\n\n

Centralized institutions and human gatekeepers can control the speed and sophistication of transactions, but with DeFi, the control is completely in the hands of the two parties involved in a transaction.<\/p>\n\n\n\n

Key Attractions to DeFi<\/h2>\n\n\n\n

There are various benefits to DeFi. Some of these include:<\/p>\n\n\n\n

Fees<\/h4>\n\n\n\n

With traditional financial options, there are considerable costs involved. DeFi is virtually cost-free, eliminating the costs involved with traditional banking services. There are no offices or salaries to pay, making it a much more viable option for many. There also are no charges for the transactions, where traditional banks often charge fees for many of their transactions.<\/p>\n\n\n\n

Open Access<\/h4>\n\n\n\n

You don\u2019t have to fill in lengthy application forms or provide proof of identity. You can access the services simply by creating a digital wallet, which is more secure than keeping money in a bank account thanks to the use of blockchain.<\/p>\n\n\n\n

Pseudonymous<\/h4>\n\n\n\n

While you\u2019re not going to be completely anonymous, one of the major benefits of DeFi is that you don\u2019t have to provide any personal details, including your name or address. You can use a \u201cscreen name\u201d or a pseudonym to conduct your business.<\/p>\n\n\n\n

Flexibility<\/h4>\n\n\n\n

You can move any of your assets at any time. There are no limits to amounts or cut-off times for transactions.<\/p>\n\n\n\n

Fast<\/h4>\n\n\n\n

Transactions are lightning-fast, with no waiting periods. No one needs to authorize transactions, and there\u2019s no system they need to go through. You can also expect higher interest rates than with traditional financing.<\/p>\n\n\n\n

Transparency<\/h4>\n\n\n\n

Both parties can see the entire transaction history as it appears in the blockchain. This isn\u2019t often possible with traditional banking methods. This decreases your risk, as you know exactly what you\u2019re in for.<\/p>\n\n\n\n

How Does DeFi Work?<\/h2>\n\n\n\n

To participate in DeFi solutions, you need software typically called decentralized apps, or \u201cdapps.\u201d Most dapps are run through the Ethereum blockchain.<\/p>\n\n\n\n

When engaging with DeFi, you can accomplish a number of different tasks, including:<\/p>\n\n\n\n