Stewardship – DeFi Explained
It’s possible you’ve encountered what’s called Defi. I’ll try to explain it because you need to be aware of it.
Decentralized finance, or Defi, is a system of financial products that bypass traditional banks or brokerages. They’re open to anyone through a public decentralized blockchain network. Proof of identity is unnecessary in transactions between buyers, sellers, lenders, and borrowers. Instead of working through a company or institution, people deal with software. The removal of centralized intermediaries is how Defi technology works. As a result, it offers better interest rates for borrowing and lending and low barriers to entry. Interestingly, DeFi loans are collateralized with other crypto assets. The offerings are mostly run on Ethereum. They were worth around $1billion a year ago, but surged since the pandemic. The World Economic Forum took notice and published a policymaker toolkit for it.
SmartAsset.com reports that DeFi offers the advantage of cost, speed, and security. Hacking could be reduced, but there is a problem. Currently, it’s impossible to protect asset values due to market fluctuations. These can be frequent and extreme. Be aware that the cost of trading could become expensive due to fluctuating Ethereum transaction rates. Also, take note of weaknesses in the technology of DeFi apps, called dapps, along with future regulations and taxes. So, study it carefully and remember, “in an abundanceofcounselors there is safety.” (Proverbs 11:14)
Now many couples are struggling with credit card debt. If you’re one of them, I highly recommend Christian Credit Counselors.They’ll create a debt management plan that will work for you. For more information call the Crown Helpline: 800-722-1976 or visit online at crown.org/ccc.