The Future of DeFi

Decentralized finance also known as DeFi in short is a growing instrument in the cryptocurrency market. The cryptocurrency has grown in such a way that now we are not just dependent on trading to earn some returns instead whatever we are holding can be used to earn a decent income. I am not saying that there is no risk involved because it is there and I believe that whenever we think of investment in any segment then we have to deal with some sort of risk factor. This is truly worth it if we have the potential to earn nice revenue or income through the investment.

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Traditional Investment

In the traditional world, we have certain investment option that includes Bank deposits, stocks and mutual funds, etc. In all these options banks play an important role because we cannot invest our money without the involvement of the bank and there is something an important part for the investment here. Because the bank is involved with any transaction so they also get certain control over who are funds and if we go for the bank deposits then the hundred percent control is given to the banking institution. It was a practice that has been followed for a long time but now people are looking for different options. It is because now things are changing and people prefer to have control over themselves rather than giving it to someone else how your banks or designed in a different way. Whenever we invest with the bank then the entire control goes to the bank and they can do anything that they want with our money till the time it is locked with them.

Benefits of DeFi

With decentralized financing, we get the entire control in our hands and there is no involvement of any third party or any intermediate to facilitate the deposit. Cryptocurrency is not just a segment where we can trade and earn money instead it is giving us to freedom to invest along with a bunch of options that we can choose as per our interest and risk factor. If DeFi brings higher risk then it also gives us the opportunity to earn a higher income.

Change in Investment trend

Things are changing now and even with social media people prefer to have freedom because when control is given to someone else that means it will be miss used anytime and we will not have anything to do since the entire access is given to the third party. Similar fundamentals are also applicable with the investment and with decentralized financing, things are changed. Invest in any instrument and make the changes whenever you want without worrying about any authorization or approval. Even though there is no KYC process that we need to follow so whatever we invest will be anonymous. Government anyways deducts the tax from the income so whatever is left after the deduction is our money and we can invest the way we want. Why should I invest my money with banks when the interest rate is too low and even for that they will have complete control of my money?

I believe that with DeFi, things are going to be so popular and banks also will be affected in the next few years because they might see a reduction in deposits in the coming years. It is going to affect them in revenue generation so I will leave now they need to think about other ways else it will be difficult for them to survive. Cryptocurrency is a revolution and if banks understand the date early then it is going to help them how any delay in this will cost them to lose the revenue which has started. A noticeable difference will be shown in coming years and probably that will be the time when banks are going to realize what they are missing out on or they have missed already.

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So to summarise, I can say that the future of decentralized financing is bright because it is going to get more attention from the people. Investment is a habit that everyone wants to do and it is going to increase in the next decade so banks have to understand that Trend and change them accordingly. Changes required and if things are not changing well on time then it also affects the future or existence and that's is something should banks have to think about.

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