Mapping the Decentralized Finance Ecosystem — 11 Ways DeFi Could Change the World
Decentralized finance is a category of financial products with common features: blockchain underpinning and decentralized governance being the two most important. Known as DeFi for short, decentralized finance is a category into which many different products fit.
Some DeFi products focus primarily or exclusively on lending cryptocurrency, while others allow users to swap comparatively rare tokens. Some look to perfect the art of cryptocurrency buying and selling (exchanges), while other products are exploring the world of tokenized derivatives.
The use cases that lie within the world of decentralized finance are diverse, ever-evolving, and proven. The DeFi sector has seen exponential investment in 2020, which can be viewed as an endorsement of DeFi products’ current viability as well as their long-term potential.
The promise of DeFi lies largely in decentralization. While the products being offered by DeFi practitioners are not necessarily new, their establishment within decentralized frameworks is. By using blockchain technology, the hope is that DeFi will:
- increase overall access to financial products, particularly to the underbanked
- promote greater governance by participants in a financial product or service, rather than by a centralized authority
- create more trustworthy financial alternatives to legacy products
In this guide, we’ll dive deep into 11 different examples of how DeFi could potentially transform the world of finance as we know it.
11 Categories of DeFi Use Cases:
- Decentralized Prediction Markets
- Decentralized Derivatives
- Decentralized Autonomous
- Organizations DAO
- Decentralized Lending
- Decentralized Insurance
- Decentralized Exchanges
- Decentralized Asset Management
- Decentralized Payments
- Decentralized Tokenization
- Decentralized Identity
- Decentralized Stablecoins