Over the past couple of years, DeFi has perhaps become the most defining event in the cryptocurrency reality. The rise of this new star is closely tied to Ethereum, the second largest cryptocurrency network by market capitalization, on which almost all existing DeFi apps run. The point is, Ethereum is not only a digital asset that allows you to make transfers over the blockchain network, but also an entire ecosystem within which you can provide services and perform more complex tasks, such as drafting of smart contracts. It was these two functions that became the foundation for the emergence of the DeFi phenomenon, which ultimately became a kind of spontaneous market response to the demand for freedom of financial services and their equal provision to any participant in the ecosystem, whatever the social status. and geographic location.
Over the past year, DeFi market capitalization has grown nearly 60-fold to $ 130 billion, and the total value of user deposits (total value locked, TVL) has increased 100-fold, reaching around 100 billions of dollars. Many analysts predicted that the industry would experience the fastest decline in history, but DeFi has weathered any problems it faced thanks to its underlying network. The transaction overload allowed for a general correction in the cryptocurrency market, which brought down the cost of the first cryptocurrency and, with it, the rest of the crypto assets in the spring and summer of 2021. Despite all of that negative events, DeFi continued to grow. What has been the fundamental driver of this growth?
The art of breaking through obstacles
The most interesting feature of DeFi is the elimination of intermediaries from its financial processes. In CeFi (centralized finance), transaction trust is ensured by an intermediary: a bank, a stock exchange, a brokerage firm, a settlement center, etc. The intermediary usually performs functions important to the economy such as the storage and movement of funds, as well as loans to individuals and organizations.
Everyone knows more or less the shortcomings of these organizations: by their complex and demanding structure, they exclude from the economic life more than a billion inhabitants of the planet, and the high commissions which they charge to the customers do not. guarantee neither a quick nor a problem. free operation. Often, transactions, especially international ones, can be delayed for no apparent reason, and some of them can be considered suspicious. All of this leaves the feeling that your money is not yours, it is as if someone has your funds at their discretion.
This has changed a lot, however, thanks to blockchain – a transaction ledger protected against unauthorized access, distributed among users, and owned by everyone and no one in particular at the same time. Due to its decentralization, a common transaction log serves as a general source of truth for all network participants. And if some network participants are motivated to give their funds for free to others, while others take those funds in the form of a loan from a bank, then there is no need for a middleman: the role The Relying Party is played by the blockchain itself, and a self-executing smart contract ensures that the conditions are met. The same goes for all other economic interactions – insurance, issuance of currency-backed stable assets or individual protocol benefits, and even the sale of unique works of art in the form of NFT tokens.
The uniqueness of DeFi is that users of decentralized applications (DApps) get rid of not only real-world financial intermediaries, but also centralized crypto platforms that require them to verify their identity with the disclosure of personal information. , which essentially violates one of the basic tenets of cryptocurrencies – anonymity.
DeFi, with its Decentralized Exchanges (DEX), allows its users to trade without having to go through identity verification, interference from anti-money laundering regulations, or any other restriction that centralized exchanges have been forced into. ‘impose.
DeFi is more than a fintech. Most fintech projects are a digital envelope that sums up old systemic phenomena. DeFi, on the other hand, works on a whole new basis as it gives people complete independence when it comes to choosing a path in the financial world.
Of course, DeFi is still having problems. For example, congestion of the Ethereum core network with the popularity of DeFi itself results in too many transactions spawning, which in turn results in higher fees. On top of that, a lot of apps still have awkward and clunky user interfaces. As such, DeFi can be seen as just a local phenomenon, which only people in the crypto world or those familiar with the technical nuances can enter. Because DeFi remains difficult for those who are far from being tech geniuses. These are important issues that must be resolved, and whoever overcomes these obstacles will emerge victorious.
How the LocalTrade Ecosystem Solves Urgent DeFi Problems
In fact, despite the explosive growth, DeFi is still beyond the attention of most financial market participants. This will undoubtedly change soon thanks to the Local trade platform – a universal cryptocurrency exchange and ecosystem of financial products that aims to bridge the gap between traditional finance and the cryptocurrency industry.
The LocalTrade ecosystem includes a full-fledged centralized trading platform and a decentralized financial platform for investments named DeFi Lab. Combining the experience and powerful technical infrastructure of CeFi with the capabilities of DeFi, LocalTrade attracts traders and investors from the domains. If they wish, they can join the world of decentralized finance as easily as they would deal with traditional financial products that they understand.
LocalTrade intends to become the first platform that will allow everyone, even those who only have a fiat bank card and $ 10 in their account, to have unhindered access to the most profitable DeFi and CeFi products. How is it possible? Using the capabilities of CEX, LocalTrade simultaneously simplifies the process of investing in DeFi products and makes that investment safer. This part of the LocalTrade ecosystem is called DeFi Lab and includes components like the NeoBroker smart fund, DeFi Wallet, a Launchpad for crowdfunding, as well as last year’s trend – yield farming, and even more. LocalTrade’s products are absolutely unique, so let’s briefly describe the essence of the innovative features that you can access in the updated LocalTrade platform.
LocalTrade DeFi Tools
LocalTrade’s DeFi Wallet is not your everyday wallet, but rather a product that will allow you to promote DeFi and make it mainstream. It is a smart multi-currency wallet for mobile devices with an intuitive interface, completely private and confidential with 100% storage of information locally on the user’s device, full data encryption, 2FA and biometric authentication for increased security. You can set up commissions in the wallet, but its main feature is the ability to trade assets from different blockchains within the same app. This specific option makes DeFi Wallet the world’s first decentralized crypto wallet with cross-chain exchange functionality.
LocalTrade’s DeFi Lab is a set of special digital tools suitable for investments and categorized according to their risk factor. DeFi Lab is designed to meet user needs and is available to all retail investors. These tools are available to investors with different levels of DeFi knowledge, ranging from pros to beginners.
- NeoBroker Smart Fund allows users to invest in shares of companies before their initial public offering (pre-IPO), thus becoming part owner of these companies.
- The Yield Farming Protocol offers users high APY rates for their assets, which will be used to extract cash through a variety of DeFi projects.
- Token Sale Investpool is a solution that allows users to purchase tokens from crypto projects currently in the pre-sale / ICO stage in order to obtain enhanced returns.
- LocalTrade Launchpad is a tool for more sophisticated investors, aimed at supporting and promoting cryptocurrency projects, as well as allowing investors to buy tokens during IDO, at the lowest possible price.
All projects hosted by LocalTrade’s DeFi Lab undergo strict smart contract checking and auditing to identify potential risks and thus prevent users from investing in intentionally fraudulent projects.
It is also possible to make money on the platform using the LocalTrade Token (LTT), which is a standard BEP-20 token issued on the Binance Smart Chain. The LTT token combines utility and governance functionality, fueling the entire LocalTrade ecosystem. As a link between the LocalTrade CEX and DeFi platforms, LTT includes a unique token model and is used in various cases on the platform. There are several ways to make money with LTT:
- Staking, through which users join the DAO Sharing Economy and can participate in the management of the platform.
- Receive compensation for attracting new participants.
- Add LTT to cash pools and receive farming rewards.
The LocalTrade VISA Card and NeoBank App are other LocalTrade products that allow you to use crypto while enjoying all the convenience of fiat money. The card instantly converts the cryptocurrency to fiat, after which you can pay for all purchases. At the same time, LTT token cashback is paid using the card. In addition, the card allows you to withdraw money at any ATM.
If bitcoin was the spark in the financial services revolution, then DeFi was the catalyst for this process. Companies that bring DeFi into the mainstream are doing a huge service not only to the tech world, but to all of human society as well. This is exactly the task that LocalTrade has taken on, providing its users with a comprehensive set of tools that will allow them to enter the world of DeFi as easily as possible. On the platform, LocalTrade provides step-by-step DeFi mastery training at its university. After graduation, students will not only have a clear understanding of DeFi, but also traditional financial instruments and investing in general.