Dated back to antiquity, financial control has been the horse back upon which many government and corporate entities ride on to exercise their supremacy and sovereignty.
It has been the sole responsibility of the Central Bank of every country to control and regulate the financial flows within the circumference of its territory. This control has its pros and cons.it is advantageous in the sense that illicit financial flows are tamed, inflation is controlled and financial activities are scrutinized. On the other hand, its disadvantages are also unavoidably anti-economic progression, therefore, decentralized finance brings about loss of control by the government and higher authorities which many at times leads to autonomous financial control by sub-units and smaller bodies.
While the world has continued to dance on the brink of financial turmoil, there has increased the quest by citizens and corporate entities to regulate, checkmate and own control over their personal financial activities without much interference by intermediaries.
Now comes the DEFI. What is DEFI? In simple terms, DEFI simply means DECENTRALIZED FINANCE. Inspired by the blockchain technology, DEFI is a generic term for a collection of applications and projects in the blockchain space propelled towards disrupting the global financial traditional. In other words, decentralized finance is an evolving system of financial applications and protocols built on the blockchain technology with programmable features as seen in Ethereum and Solana. The transactions under this protocol are spontaneously executed through smart contracts on the Blockchain, included in the smart contract is the immutable agreement of the bargain.
The functionalities of the decentralized finance does not depend on central financial intermediaries such as exchanges, brokerages or even the conventional Banks for financial instruments.
The advantages of the decentralized finance include but not limited to its transparent nature, immutable status, permissionless attribute, lending and borrowing features, application saving and tokenization.
Defi products vary from: open lending protocols(MakerDAO),issuance platforms and investing(polymath), decentralized prediction markets(Augur), exchanges and open marketplaces(IDEX) and stablecoins(DAI)-RiveX