Uses of DeFi and its Future.
Peer-to-peer (P2P) financial transactions are one of the core premises behind DeFi. A P2P DeFi transaction is where two parties agree to exchange cryptocurrency for goods or services without a third party involved.8
In DeFi, P2P can meet an individual's loan needs, and an algorithm would matches peers that agree on the lender's terms, and a loan is issued. Payments from P2P are made via a decentralized application, or dApp, and follow the same process in the blockchain.9 Using DeFi allows for:
• Accessibility: Anyone with an internet connection can access a DeFi platform and transactions occur without any geographic restriction.
• Low fees and high-interest rates: DeFi enables any two parties to directly negotiate interest rates and lend cryptocurrency or money via DeFi networks.
• Security and Transparency: Smart contracts published on a blockchain and records of completed transactions are available for anyone to review but do not reveal your identity. Blockchains are immutable, meaning they cannot be changed.
• Autonomy: DeFi platforms don't rely on any centralized financial institutions and are not subject to adversity or bankruptcy. The decentralized nature of DeFi protocols mitigates much of this risk.