Are you using DeFi projects?

in defi •  2 months ago 

I am wondering if DeFi is one of the first real use cases for blockchains.

Clearly so far we have had:

  • The use of bitcoin as money
    -- using the money aspect for gambling (to me this is not a different use than money)
  • Trading and investment vehicle
  • Fundraising tool (ICO)
  • some games and game assets

But when it comes to real usage I have to admit I am not seeing much.

defi.JPGEnter DeFi

DeFI clearly offers some solutions that traditional finance cannot. Are you able to get 10% interest on cash, with very low risk (i'd argue with less risk than putting money into a bank)?

No very clearly not. The reason you can do this with DeFI is simply because the interest rate is a determined by real market forces.

In this case how much people are supplying and borrowing. Interestingly this natural supply and demand is very artificial, due to the fact that the creation of of stable coin such as DAI via collateral at a high interest rate only makes sense because of a high tax rates. I.e. in the US taxes are 37% + a state tax ranging from 0 to 7%. Capital gains taxes are much lower at 21%. If you plan to liquidate some crypto that you gained as profits it may make sense to defer via a loan and saving 20%ish in taxes (paying 21% vs 40+%). This allows the interest rate on such loans to be so high (currently 12.5%).

On the flip side gaining 10% just buy holding DAI, is an insane amazing new use case. The thing is that this is not possible on wall street.

DeFi opens up financial innovation to the world and creates use cases that were not here before.

So are you capturing some of this wealth opportunity?

If not, why not?

I personally have not put much value into DeFi projects. The key reason for me is I don't have too much cash right now. I know that is a lame excuse. I wish I could do this in my retirement account.

What about you?

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

@knircky, I've heard about the DEFI for the first time. Sounds effective space and i want to deep dive into this more. Thank you for letting us know.

Oh, not yet but I will definitely give a trial soon. Thanks for sharing this with us. Well - detailed. Knowledge found.

Posted using Partiko Android

Wow, and here i thought everyone knew what it was!

It seems a great alternative and the future certainly moves in that direction, unfortunately, I find myself in a similar situation in which I do not have a penny to invest in it.

That sucks. But we can always save and invest small

Hi @knircky,

I am not investing in anything these days since I can barely pay my $100 usd rent in Malaysia each month. I’m not sure if this would be my first choice for investment if I ever crawl out of this hole, but you never know.

I am answering your post to let you know that unlike you I am seeing a lot of blockchain technology usage. This is something I look for and tweet.

I am not very technically able in blockchain or anything else, but I have a good twitter account with a lot of crypto connections. I already had a good account over there before getting here. Now thanks to my presence on STEEM for the last two years I follow and am followed by a lot of crypto people. So when I see anything about the mainstream jumping on board blockchain tech, I tweet it since I get a good response.

These are a few of the things I can remember seeing since I started doing this.

  • banks are using blockchain tech for internal and external communication
  • real estate transactions and especially documentation are being transmitted by blockchains. Information about liens and chain of ownership is one topic I remember seeing since I worked in that field and had an interest.
  • Insurance companies are using it for claims processing and fraud protection. This is also another area I worked in and know how bed the paper trail is.
  • Healthcare is using it for records storage and transmittal
  • Governments are using it for birth/death/marriage certificate storage.

I think blockchain usage is sneaking up on us all and one day the tipping point will be reached. The sooner the better.

Thanks for sharing man.

@knircky has set 5.000 STEEM bounty on this post!

Bounties let you earn rewards without the need for Steem Power. Go here to learn how bounties work.

Earn the bounty by commenting what you think the bounty creator wants to know from you.

Find more bounties here and become a bounty hunter.

Happy Rewards Hunting!

Congratulations to the following winner(s) of the bounty!

To listen to the audio version of this article click on the play image.

Brought to you by @tts. If you find it useful please consider upvoting this reply.

Gaining 10% just by holding DAI sounds good but I also don't have any cash now

Posted using Partiko Android

Not yet, but it's an interesting asset that enhances safe dispersion even further.