PANews reported on August 28 that Andre Cronje explored the reasons behind decentralized finance (DeFi) and its importance in his latest article. Cronje explained the historical origins of finance, from the initial barter to IOU, and then to the formation of the banking system. The essence of finance is to use idle assets for production and help individuals and businesses achieve their goals. However, with the development of society and the complexity of the credit system, traditional finance has become more and more exclusive, relying only on credit scores to determine loan qualifications.
Cronje pointed out that DeFi eliminates discrimination and injustice in traditional finance through open and transparent rules, and everyone can participate equally. DeFi does not require intermediaries, there are no hidden transactions, and all rules are public. Whether it is a loan or a transaction, users can clearly understand whether they meet the conditions. The core of DeFi lies in fair, transparent and democratic participation, which is why it has become the cornerstone of the global economy.
Cronje also emphasized that although there may be bad incentives and unsustainable profit models in the DeFi field, these do not affect DeFi's potential as a tool for financial innovation. DeFi provides everyone with opportunities to participate and promotes the interconnection of major industries. He believes that DeFi is the core cornerstone of building a decentralized society, and in the future it will cover major industries such as insurance, oil, real estate, pensions, car sales, direct insurance and commercial banks until all these industries are transparent and open on the chain.