Can DeFi Become Viable Alternative to Traditional Finance?

Traditional finance is riddled with issues that arise due to its requirement of middlemen carrying out financial transactions. An increasingly connected world has highlighted such drawbacks, where intermediaries like banks charge high fees to become entry barriers for accessing various financial instruments. Hence, there has been a growing need for an alternative financial system with lower transaction fees and improved accessibility. 

GlobalData’s FutureTech series report, ‘Gradually, Then Suddenly: Can DeFi Become Viable Alternative to Traditional Finance?’, reveals the challenges faced in traditional finance, blockchain’s concept of decentralization, and the growing popularity of cryptocurrencies are some of the triggering points to explore Decentralized Finance solutions.  

Intermediaries: 

DeFi allows any individual to buy, sell, lend, and borrow to interact peer-to-peer (P2P) by removing intermediaries. 

Entry Barriers: 

DeFi serves as an alternative to banks for the underserved and unbanked populations by giving access to financial instruments like loans. 

Single Point of Failure: 

DeFi is built on decentralized blockchain networks so that the information is spread across multiple nodes on thousands of computers via a P2P network. 

Financial Censorship: 

DeFi enables censorship resistance, every user has self-custody of their assets regardless of credit history or social standing. 

The report highlights how startups and enterprises are leveraging DeFi to change the way we embrace financial services using cryptos. 

For more insights, download a free report sample here 

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