Decentralised Finance: Complete DeFi Overview & Outlook

Jan 26, 2020

📝 Simple Overview 📝

Decentralized Finance is one of the hottest topics on the crypto grapevine right now. That’s not surprising seeing that within the space of two years DeFi has gone from having less than $60 million locked in the ecosystem to nearly $800 million at the time of this video’s release.

💰 What is DeFi? 💰

DeFi takes products and services from traditional finance and decentralizes them by replacing middlemen with smart contracts.

👯 What Are People Doing In DeFi? 👯

Today, the most common uses of DeFi are:

Borrowing money

Supply money to earn interest

However, the key thing here is that this all takes place outside of the traditional banking system. That means no KYC, no need to get approval from anyone, no credit scores, no requirement for a bank account and no descrimination based on where you live.

🏦 The DeFi Ecosystem 🏦

The emerging DeFi ecosystem is already home to a wide range of platforms like DeFi loan comparison sites, automated trading solutions, lending platforms, non-custodial margin trading platforms and much more,

🔮 The Future of DeFi? 🔮

Decentralized Finance has already seen phenomenal growth over the last few years. However, there are over 1.7 billion unbanked people in the World excluded from the traditional financial system who could benefit from DeFi.

Imagine if you are living in a developing country with high inflation. DeFi gives you the opportunity to get out of your local currency and hold USD via stable coins like Dai. Even better, you can then take that Dai and lend it out at 5+% interest on DeFi platforms like Compound Finance. DeFi already offers people the tools to hedge out local currency risk and that’s a pretty big deal in countries like Venezuela.

Although DeFi loans currently need to be over-collateralized, I imagine it will only be a matter of time befer under-collateralized loans are available via a form of DeFi borrowing reputation system.

🤔 Problems With DeFi? 🤔

It’s hard for the average person to access DeFi and that's due to friction between the crypto and traditional finance ecosystem. That’s where tech solutions like Nimiq OASIS can come in by providing FIAT smart contracts which enable non-custodial crypto:fiat trades. This solution is set for launch this year in partnership with Ten31 bank and has been developed by the crypto project Nimiq. Adoption of this solution certainly has the potential to make it much easier for people to access the DeFi ecosystem.

Another major issue facing DeFi are smart contract bugs. These could result in DeFi users losing access to a significant amount of funds and it’s even more worrying seeing that bugs are not unheard of in smart contracts.


⛓️ 🔗 Helpful Links 🔗 ⛓️

► DeFi market size:

► DeFi lending rate comparison:

► Top DeFi lending platform:

► Non-custodial margin trading:

► Automate crypto portfolio management:

► World Bank report on financial inclusion:

► The bank bridging crypto & conventional banking:

► Nimiq OASIS info:


📜 Disclaimer 📜

The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading Forex, cryptocurrencies and CFDs poses considerable risk of loss. The speaker does not guarantee any particular outcome.