Taking your Business to the Next Level with DeFi —
The easy guide to DeFi
If you made a list of words that defined 2021, ‘DeFi’ would surely be on the list. Decentralized Finance, or DeFi, is a specific application of crypto technology that has its users singing and has the traditional finance world quaking in its boots. As of November 2021, the total locked value in the DeFi industry sits at more than $100 billion USD — nearly 1000% percent higher than where it was this time last year.
More than just profit, DeFi is changing lives by bringing financial access to the unbanked and erasing the geographic borders that so often limit fiscal prosperity. It’s technology with a future, and one which will bring a positive impact to the lives of billions of people.
But first, let’s take a step back.
What even is DeFi? And how can it help you with your business?
In this article we address these two questions and take a look at some of the best ways to get involved in this emerging technology.
What is DeFi?
DeFi, short for Decentralized Finance, is a grouping of financial services offered via blockchain solutions.
It is often explained in contrast with Centralized Finance, which is the traditional financial system we’re accustomed to. In a centralized financial system, rules are typically dictated by governments, central banks and international financial institutions. This system has become overburdened with rules and regulations that change from jurisdiction to jurisdiction and make cross-border trade unnecessarily complicated and difficult — especially for everyday users.
Typical financial processes are nothing short of painful in centralized finance. For example, consider the process of taking a loan. A customer is usually required to visit the bank in-person, present a mountain of paperwork to prove their identity, run through complicated contracts that are all but impossible to understand for anyone but a lawyer, sign away precious items as collateral and then twiddle their thumbs as they wait days, weeks or even months for approval. The process is murky and people are mistrustful of the banking institutions — and rightfully so.
Compare this with a loan taken through a DeFi lender. Because DeFi is, as the name suggests, decentralized, there is very little bureaucracy behind the transactions. In fact, for many DeFi lenders, not a single piece of identification is required. Because DeFi is built on blockchains and smart contracts, every single transaction is pre-programmed, inspectable and uncompromisable. You know exactly what you’re getting yourself into every time you transact. Because of all of this, DeFi lending is highly efficient. It is possible to access a DeFi lender, post collateral and receive a loan in a matter of minutes, if not seconds. Fast, affordable and borderless — perfect for any growing business.
African DeFi businesses
Earlier we looked at the example of a loan, but DeFi is much more than that. Think of anything you currently need a bank for — lending, borrowing, saving money, collecting interest, transferring funds… DeFi supports all of these, but without the need for a traditional bank. It’s open, democratic, decentralized — and adoption is growing rapidly.
Many existing businesses and business models are making the switch to blockchain and DeFi — in fact almost every type of business can benefit from blockchains in some way or another. FarmBit, for example, connects agribusinesses with financing using DeFi and NFTs. This type of business isn’t new: traditionally banks and other financial institutions have fulfilled this role, but centralized inefficiencies and insecurities have been prohibitive. Thanks to DeFi, businesses like FarmBit are decentralizing traditional business models and, in doing so, creating incredible new opportunities.
Another African DeFi business which has captured global attention is Empowa. Empowa uses DeFi to promote financial empowerment across Africa through decentralized property development programs. Because of the way DeFi protocols are secured, Empowa can support people in ways and at speeds centralized solutions can only dream of.
Empowa is built on the Cardano blockchain, somewhere many other protocols are building. Cardano is fast, cheap, scalable and easy to understand. This makes it the perfect place for not only new projects looking to make their mark on the crypto space, but also existing businesses wanting to take advantage of this groundbreaking technology. If you’d like to take a leap on Cardano and scale your business model with DeFi, get in touch with Adaverse today.
The democratization of finance
DeFi is so much more than a way of generating money — it’s the idea that financial access should be available to all, regardless of where you live in the world or if you’re rich or poor. It gives everyone the opportunity to access vital financial services and the many benefits they bring.
DeFi helps us realize a world where a business can get quick, secure financing when they need it, without having to go through lengthy processes or deal with shady lenders. It’s a future where transparency is king, with contracts freely verifiable on the blockchain. More than anything, it’s a future that everyone can participate in.
We are a Cardano ecosystem accelerator providing funding and investment support to impact-driven crypto startups with game-changing projects across Africa. We’re helping to grow DeFi in Africa through the Adaverse Accelerator program — where you get all the support you need for a globally successful tech solution.
We are open to applications from African-based startups with a crypto-native edge and a proven concept. Apply here
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