How? We’re glad you asked!
DeFi protocols operate on self-executing smart contracts; Which automates various processes, eliminates intermediaries, and also rids users from the need for human intervention.
By simplifying asset management and contractual execution, It lowers operating costs for beneficiaries.
DeFi platforms are backed up by ultra-secure blockchain networks. Hence, eliminating the need for Banks and safeguarding the assets from hacking and attacks through regular auditing of smart contracts and using on-chain price oracles.
Giving individuals full control over their assets saves them from having to compromise their funds due to the absence of a single point of failure.
Compared to the closed-door model of the traditional financial system, DeFi platforms are more transparent.
Anyone can see the transactions recorded on blockchain networks and vote on numerous proposals, make decisions, and get freedom from centralized leadership on DeFi platforms.
DeFi platforms offer passive income for token holders and liquidity providers and enable them to earn high returns in a short time in various ways like Staking, Yield Farming, Peer-to-Peer (P2P) lending, etc.