DeFi: The universe of cryptocurrencies, which has expanded rapidly in recent years, has been consolidated in 2021. Bitcoin, the largest digital asset in the world, has set value records and is already trading at more than US$ 66,000 (about R$ $368k at current quote). Not to mention other valuation phenomena, such as the AXS token, from the Axie Infinity game, which yielded millionaire fruits for those who knew how to invest at the right time.
But what went up, went up. Although many cryptoactives that have already taken off, such as bitcoin itself, can still be a great investment, they will hardly gain so much market value as to transform the financial life of anyone investing a small amount.
The way for those looking for big returns with cryptocurrencies, therefore, is to look for assets that still have a small market value, but with fundamentals for a potential explosion. That’s what DeFi promises.
The acronym for Decentralized Finance consists of the tokens associated with providing financial services such as contracts and loans, but without the involvement of central banks or institutions such as the Central Bank (BC) – all registered on the blockchain.
The eight major categories of cryptoactives existing so far are part of DeFi:
smart contracts platform;
tokens from centralized exchanges;
In summary, it can be said that DeFi is a kind of smart contracts platform applied to the world of finance. These platforms carry out operations and custody assets without going through centralizing entities such as governments and banks. All transactions are registered in the blockchain through programmed contracts that execute themselves according to your premises. In addition to greater freedom, this gives transparency and security to operations.
Today, the protagonists of DeFi are cryptocurrency lending systems and so-called DEX — brokers like Uniswap, which allow the exchange of crypto-assets without the need for an intermediary, like traditional exchanges.
In the short term, however, the use may spread even more across the planet with the popularization and officialization of cryptocurrencies. Not to mention the long-term opportunities, imagining a scenario in which fiat currencies are in the DeFi system or even in which cryptocurrencies take part in the role of currencies issued by governments.