Without mincing words, the DeFi world is one where there’s almost no unimportant person. Every player in the DeFi ecosystem is such that they are essential for both the growth of the community and every project in the ecosystem. The crypto community is broad such that it could provide a means of revenue for everyone. The big question is, “what is DeFi in crypto?” DeFi means decentralized finance, including all those blockchain applications that use smart contracts to replace banks and other financial institutions. DeFi is under the umbrella of the Ethereum network; its transactions are pretty fast, and the entire ecosystem is lucrative.
There is more than one reason behind DeFi popularity, although most users believe DeFi is still young and could grow than its present stage. However, it’s worthy to note that DeFi has grown tremendously, thanks to some of the reasons given below
What are those factors behind DeFi’s popularity and growth?
As mentioned above, DeFi’s popularity is due to several factors and players in the ecosystem. One question you should always ask yourself is, “why is DeFi under the Ethereum umbrella?” some crypto enthusiasts say it’s because Ethereum is the currency of innovation. Others say it’s because it’s a second-generation network with the capacity to run smart contract applications like DeFi. Nonetheless, these amongst several other reasons are responsible for the growth in the DeFi ecosystem and its overall popularity.
One way to push your crypto project is by having an interesting fundamental. Most times, project owners focus on ICOs alone and the number of tokens they could sell at first, so they forget to give a detailed explanation and breakdown of what the project is all about. DeFi, as explained earlier, is a decentralized finance system that gets rid of financial intermediaries and replaces them with smart contract applications. This main objective has generated a higher level of experimentation in the DeFi ecosystem such that every project owner wants to experience “freedom.” One of them is the birth of NFTs that has over time given birth to millions of dollars. There are more than enough use cases of the DeFi ecosystem, and more are being unveiled daily.
An ecosystem that keeps giving:
Before now, you might think crypto isn’t as great. If you’ve been able to explore DeFi, you should understand that DeFi is that gift that keeps giving. The DeFi product market cap is over 80 billion dollars, and it keeps growing. DeFi is just a few years old, but its growth and popularity have been exponential. Are you still confused? What is DeFi in the crypto community? It’s that ecosystem where everyone has the opportunity of making a fortune with little or no stress.
Immense creativity and versatility:
What cryptocurrency gives us is more than financial freedom. Getting creative alongside being financially independent is the best type of freedom ever. DeFi gave room for creativity in its innovative use, unlike other financial systems. So, your level of creativity will be a function of your imagination in the DeFi ecosystem. Imagine the level of creativity that goes into writing smart contract codes, eliminating financial intermediaries. With DeFi, you get the opportunity of creating anything you want using stablecoins and cryptocurrencies to either fund digital assets (NFTs) or create one. Thanks to the Ethereum network and DeFi, who would have thought NFTs would fetch millions, arts, and other interesting creativities.
Enjoy every perk of Ethereum:
The level of transparency in the Ethereum network is one big reason why Ethereum is so popular and, by that, the popularity of DeFi. You need not worry about transaction receipt; everything is all on the blockchain to prove. There’s nothing of such in a centralized finance system; they have the power to withhold some termed “sensitive” or “office use only” receipts. In DeFi, if you can analyze the data from the blockchain, you can get the full detail of the DeFi product, which is great for DeFi adopters. It’s no news that you can do more interesting things with Ethereum than you can with bitcoin. Ethereum is more of a computer with the capacity to run simulations, models and execute smart contracts.
Thanks to cryptocurrency and Ethereum, the DeFi ecosystem is becoming more mainstream. Many investors are beginning to see the reasons to invest in the ecosystem. The more investors and investments in the DeFi community, the bigger it grows. If you are looking to earn passive income in the crypto community, DeFi is the right niche to explore. On the other hand, if you want your portfolio to work for you while going about your regular job, you should give DeFi a shot! It’s always worth it with Ethereum.