DeFi cryptos are now a force to reckon with, especially since the era of the worst pandemic known to man came to play.
It’s important to note that DeFi-related assets are gaining traction, as data feeds from Defipulse revealed that Defi based crypto market value had risen from $1 billion in June to $10.71 billion, at the time this report was written, showing an astronomical gain of 1071%.
READ: Crypto: Why investors are rushing to DeFi assets
Why investors are flocking to DeFI cryptos
Several DeFi crypto assets have had their share of the spotlight in recent times, with cryptos such as Chainlink, Compound, YAM, UniSwap, Cream finance, and Melon gaining investors’ capital inflows.
- 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.
- Although DeFi assets, about few days back, had experienced some price corrections due to the rebound of the dollar and overbought indicators, the market seems to show a bullish bias relatively in the midterm, as Defi based investors increase their asset purchases momentarily.
- DeFi crypto owners in some cases can typically receive better interest rates than they would from traditional banks on the basis that lower operating costs is enabled by operating on an automated decentralized network
As a credit to blockchain technology, the contract codes cannot be terminated or manipulated by any entity, and are executed with specific conditions.
READ: Guinness Nigeria finding it hard to refinance its loans due to dollar scarcity
What DeFi means: 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.
