Keep Your Eye on DeFi: A Look Into The Growing Decentralized Finance Movement
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Technological innovation has provided new ways in which we manage, move and invest money. The financial industry has been transformed in recent years, and as the crypto industry continues to grow, new concepts and opportunities are surfacing.
Decentralized finance (DeFi) is an emerging and fast-growing technology sector of the crypto industry. DeFi is creating a new financial system that doesn’t rely on traditional intermediaries like banks or insurance brokers, providing more freedom and creativity.
DeFi is the ability to operate your personal or business finances without anyone’s permission. If you want to earn interest on your emergency savings, you don’t need to open a bank account. If you want to trade one investment for another, you don’t have to wait for the stock market to open. With DeFi, you are in complete control of your money, and it’s available 24/7, 365 days a year, to spend, save or invest as you see fit.
Before getting involved with DeFi, it is essential to understand the fundamentals. Learning how DeFi operates and the associated risks and rewards is a recommended first step that can be aided by obtaining a Certified Digital Asset Advisor (CDAA) designation.
How does DeFi work?
DeFi doesn’t exist on the central server of a bank; it resides on the blockchain. According to MarketsandMarkets, the blockchain technology market is expected to grow to $67.4 billion by 2026, from just $4.9 billion in 2021. Any organization with the technical skills and knowledge to do so can launch an application (referred to as a protocol), available for anyone to use.