Early look at DeFi on Ethereum
DeFi (Decentralized Finance) is the new new thing on the blockchain, like with new new things ( remember ICOs ?) there is a learning curve and a ton of new concepts and issues, rather than go deep into any one of them I’ll try to give you an overview and point you to other resources if you want to learn more, let’s dig in…
Don’t sugar coat it doc.
Think about what financial products you use… A checking account that gives you 0% interest, a savings account that gives you 6% APR , a loan you have to beg for at 12% APR, Insurance and credit cards to name a few, what all this instruments have in common is that there is a middle man ( your bank ) and this middle man nickel and dimes you, sets and changes the terms whenever it pleases and generally treats you like crap, DeFi at its core wants to eliminate the middle man, decentralize the whole process and in the parlance of our times let’s you be your own bank.
While this sounds great ( unless you are a bank ), it is literally day zero of this effort, and as such there are multiple issues both intrinsic ( you do know how to operate a bank don’t you ? ) and growing pains, mainly horrible UI/UX, a lack of on-boarding , early adopter risk and well the products themselves are a bit on…
