Centralized Exchanges have been existing for a long time but now Decentralized Exchanges are growing astronomically to catch up. Central governments around the world issue paper currencies in the centralized system.
These currencies are regulated, and a lot of factors affect its value. But a major problem lies within the centralized financial system. They have a single point of failure because they comprise of human regulators who are prone to errors. A centralized financial system also excludes certain people from the financial system.
For example, if people are not able to access loans because of their bank’s credit card score. In other instances, a person may not open an account without complying with the bank’s KYC process and procedures. Furthermore, financial services are lacking in remote areas.
In the centralized financial system, there is too much power in the hands of central/regulatory bodies. There is no transparency, and people have little to say when they save their money in centralized financial institutions.
The Way forward for DeFi and Decentralized Exchanges
Decentralized exchanges have come to change all the limitations associated with centralized systems. Today there is a lot of buzz around decentralized finance/exchanges, and statistics have it that Decentralized exchanges outgrew its counterpart in Quarter 3.
It provides streamlined financial access to everyone around the world without the need for a middleman. DeFi has come to give financial power back to the people. It is one of the applications of blockchain technology that aims to extend financial services to every-one around the world.
There are no limitations, and you can have access to it with an internet-connected device. It includes smart contracts, digital assets, protocols, and so on. Moreover, decentralized finance is an open-source system, and its concept would change how the world economy operates.
Quarter 3 performance of Decentralized Exchange and DeFi sector
The decentralized exchange sector performed very well in Quarter 3. Its performance is majorly driving DeFi, with a trading volume of more than 88%. August and September contributed to the major increase in trading volumes, and there was an impressive surge of $3.8 billion to over $30 billion in September alone.
Knowing all about DeFi
You might be thinking that DeFi is all about cryptocurrency all alone, but that is just one of the applications. DeFi has expanded the acceptance of cryptocurrencies, but it performs a lot more actions, such as the following.
- Taking of lone and borrowing
- Asset storage
- Tradable assets, Bonds, Stocks, and so much more