Defining DeFi: What Is It & Why Should You Care?
If you haven’t heard about DeFi yet, you will soon. And again. And again.
Recent reports show that around $90 billion of collateral is locked up in decentralized finance (DeFi) services.
Over 10 million users have downloaded MetaMask, the popular crypto wallet—an 1,800% increase in the last year. And that’s just the beginning. DeFi is revolutionizing our current financial models, trading opaque institutions and strict regulations for a global, efficient system that’s built for everyone. You’re included.
Finance Reimagined: What is DeFi?
DeFi - The collective term for peer-to-peer financial services and applications on public blockchains (eg. Ethereum). Think of what you can do with regular banks: borrow loans, lend money, earn interest, trade assets, etc. Now imagine you could do all those same things, but without all the paperwork and third-party intermediaries. That’s DeFi.
Smart Contracts - Just like traditional contracts, except these are computer programs stored on the blockchain. So the terms of the contract are written and executed as code. No paperwork. No intermediary. Secure, automated, instant, borderless.
Stablecoins - It’s all in the name. A kind of crypto pegged to fiat currency (eg. USD) or other tangible assets (eg. gold). The price stability removes volatility compared to other cryptocurrencies, but with all the added benefits of decentralized technology: faster transfers, more transparency, and privacy. It’s the best of both worlds.
Opportunities of DeFi
Lending - Earn interest on your crypto by lending it out. Rates are better than what most traditional banks offer, so you can sit back and watch your balance grow in days, or even hours.
Securing loans - Your crypto holdings are digital assets—ones you can use as collateral to obtain a secured loan. Take advantage of lower interest rates, shorter terms, and fast approvals. And in most cases, no credit check required. Leave behind the messy paperwork and get your funds when you need them.
Staking - Having crypto locked up (staked) in a smart contract can offer rewards like passive income and higher yields than what you’d earn in interest at a traditional bank.
Trading - Decentralized exchanges allow you to make peer-to-peer trades. No brokerage necessary. You always retain control of your assets. And because the market is global and built on blockchain technology, it never closes. Trade how you want, when you want.
The Need for DeFi Today and in the Future
On the surface, DeFi and the traditional financial system share a lot of overlap.
After all, they both provide many of the same services. And that’s by design. DeFi offers alternative solutions to problems and inefficiencies found in our existing financial models.
In the current system, centralized authorities like governments and banks determine every aspect of financial services. Who can access accounts. What you can earn in interest. When the markets close. How to charge premiums and fees.
Governing regulations prevent customers of one institution from trading with customers of other institutions. And often, these financial establishments ask you to put your trust in them without offering any transparency in return.
DeFi removes the intermediaries and puts people back at the center of their own finances.
Blockchain technology and decentralized identifiers ensure radical transparency into transactions and applications. Transfers take place instantaneously.
Users have direct access to the products and services they want. No lengthy applications. No central authorities denying access to service or blocking you from getting paid.
Decentralized peer-to-peer networks utilize cutting-edge technology to perform the same financial services you’ve always known—but at higher speeds and lower costs.
Future of Work, Meet Future of Pay
Freelancing is another fast-growing industry—one that’s transforming traditional work structures and putting people back in control of their careers. As a contractor, you’ve already embraced the future of work.
With Rise and DeFi, embrace the future of pay.
Smart contracts and instant payments mean you get paid sooner instead of waiting for days or weeks. And with lower fees, you keep more of your money.
Crypto gives you the opportunity to maximize your income via different DeFi protocols such as staking or lending, meaning you have more freedom than ever and control over new revenue streams.
All of that through Rise's dashboard.
Freelancing revolutionizes the way we work. It lets you take control of your schedule and your projects—shouldn’t the same be true for your finances?
Crypto Operating Systems through DeFi is the future. And with Rise, it’s already here. Using decentralized technology, our talent cloud platform offers the tools for businesses and contractors to collaborate and grow. We're cultivating the most advanced ecosystem for freelancers to succeed. Get access to alternative sources of income via our unique platform. Sign up to join Rise today.