The Blockchain-Powered Space Of Decentralised Finance (DeFi)
We recognise the growing importance of DeFi in blockchain and for the wider financial services. DeFi refers to the shift from traditional, centralized financial systems to peer-to-peer (P2P) finance enabled by decentralized technologies built on the Ethereum blockchain. From lending and borrowing platforms to stablecoins and tokenized BTC, the DeFi ecosystem has launched an expansive network of integrated protocols and financial instruments. Now with over $7 billion worth of value locked in Ethereum smart contracts, decentralized finance has emerged as the most active sector in the blockchain space, with a wide range of use cases for individuals, developers, and institutions.
What is DeFi?
One area in cryptocurrencies attracting huge attention is DeFi. This refers to financial services using smart contracts, which are automated enforceable agreements that do not need intermediaries like a bank or lawyer and use online blockchain technology instead
Defi, most of it built on the ethereum blockchain network, is the next step in the revolution in disruptive financial technology that began more than 10 years ago with bitcoin. One area in which these decentralised applications have taken off is cryptocurrency trading on decentralised exchanges. These are entirely peer-to-peer, without any company or other institution providing the platform.
Scalability
Despite bringing tremendous benefits and offering many amazing features and promises, DeFi still remains a number of challenges that need resolving. One of major barriers is scalability.
While the concept of DeFi itself does not limit the platform on which the services are operated, most DeFi services are now being provisioned on the Ethereum network, due to its dominance. Nonetheless, the rapid expansion of DeFi has posed a serious stress on the network’s capacity. Transaction fee and network latency are at their highest. With DeFi proliferation in the horizon, addressing scalability issues is a dire necessity. While layer 2 scaling proposals have already been deployed, much improvement remains needed.
Our aims are to develop and provision DeFi services on high-performance blockchain systems besides Ethereum. On the one hand, this will address the scalability issues of Ethereum-based DeFi services. On the other hand, it further diversifies the DeFi ecosystem as a whole, which is in and of itself an embodiment of the decentralisation concept.
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