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Ross mas cercano5/5/2023 Now, as we have an idea about what types of services we are aiming to provide through a decentralized ecosystem, let us dive in and understand DeFi What is DeFi ( Decentralized Finance) The lending of money from one person to another,.Transfer of money from one point to another,.Thus, financial system services include the following services: The financial system of any nation consists of banks, investment houses, lenders, finance companies, real estate brokers, and insurance companies. Now as we know the problem that DeFi is trying to solve, let us understand the types of services that a financial system provides. Because of intermediaries in a specific transaction, transaction costs are high.Authorities can regulate the whole financial market for their own interest.Your personal details may be shared with other parties and authorities.There may be hidden transaction charges applied to a particular transaction.A bank may restrict your account or prohibit you from transferring money to another party.Lack of access to these financial sectors sometimes prevent people from being employed.There are some nations or sectors of society that do not have access to the banking systems.The significant problems of a centralized financial system can be listed as follows: As a recent example, consider the 2007-08 financial crisis in the US, which resulted from the bankers’ housing market bubble. Banks, insurance companies or stock markets, and other financial institutions have someone in charge that controls and offers financial services.īecause humans control the whole system, the system itself is prone to mismanagement, fraud, and corruption. Today, our traditional financial system and all of its services are entirely centralized.
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