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Cryptocurrency

Crypto: Why investors are rushing to DeFi assets

Defi is a crypto ecosystem made up of financial apps designed on leading blockchain platforms.

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IMF calls crypto "special currency" and educates the public, Crypto: Why investors are rushing to DeFi assets, total market capitalization of cryptocurrencies, Crypto, Whales move 100,000,000 Tether, USDT in less than 24 hours

While it seems that leading crypto assets like BTC and ETH have continued to experience low volatility in the past few days, a significant number of DeFi-related assets have managed to gain the attention of many crypto-investors, thereby pushing these digital coins to record highs.

Several mid-range ETH-based crypto assets had their share of the spotlight today, such as Chainlink, YAM, Cream finance, Melon, etc.

READ: Five oil majors reduce value of their assets by $50 billion in Q2

What is Defi?

Defi means “decentralized finance.” By definition, it’s a crypto ecosystem made up of financial apps designed on leading blockchain platforms.

Defi, in short, is the use of blockchain technologies (including smart contracts, decentralized asset custody, etc.) to replace all “intermediaries” with program codes, therefore maximizing the efficiency of financial services and minimizing costs.

These digital assets are designed on Ethereum codes, and usually exhibit characteristics that include having protocols and financial smart contracts.

READ: LINK, most profitable crypto-asset in 6 months, gains 451%

Importance of DeFi assets

Using “Defi” technology, one can build smart contracts with codes that facilitate the actions of intermediaries, including managing and accepting deposits, handling collateralized loans, and liquidating collateral assets as per the terms of the contracts should their values fluctuate.

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As a credit to blockchain technology, the contract codes cannot be terminated or manipulated by any entity, and are executed with specific conditions.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Follow Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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