DeFi is a financial innovation that has emerged rapidly in recent years. It mainly builds decentralized financial services and tools based on blockchain technology. The concept of DeFi includes various financial activities such as lending, trading, investment and insurance. More importantly, it is conducted in an open, transparent and trustless manner.
DeFi is still in its early stages, but there are several factors that could push it towards the mainstream:
Advantages of decentralization: DeFi provides trustless financial services, allowing users to fully control their assets without relying on traditional financial institutions. This feature attracts more and more users, especially those who are not satisfied with the traditional financial system.
Investor interest: Due to the low yields and high risks of traditional financial markets, many investors are turning to investment opportunities with higher returns. Lending and investment platforms in DeFi often offer higher interest rates and flexible investment options, attracting a large number of investors.
Financial Inclusion: The decentralized nature of DeFi makes it easier for people around the world to access financial services. Especially in unbanked areas or developing countries, DeFi can provide financial inclusion to those without traditional banking services.
Impact of national policies: Some countries have begun to recognize and support the development of blockchain and digital asset technology and have formulated relevant policies and regulations. The promotion of these policies will help the development of DeFi and promote it to become mainstream.
However, DeFi also faces some challenges, including technical security, regulatory issues and market risks. For DeFi to go mainstream, these challenges first need to be solved and a financial system that is reliable and widely recognized needs to be established. At the same time, it is also crucial to educate users and investors to improve their understanding and awareness of DeFi.
