DeFi and DAOs

Blockchain technology is having a growing impact on the financial services sector, both in terms of the use of the technology and the digital assets that blockchains are able to create. Cryptocurrencies, digital assets, CBDC, stablecoins, decentralised finance (DeFi), non-fungible tokens (NFTs) and peer to peer (P2P) transactions are some of the use cases being adopted. And, at the frontline of changing how finance and banking is transacted, is DeFi.

Image credit: Logo of Defi DAO

DeFi is a blanket term for financial exchanges and systems of ledgers that are not controlled or run in a centralised fashion. The fact that they are decentralised is a strength since they act as disintermediate trades. Through DeFi, participants can:

·      loan - without all the hassles of paperwork.

·      lend - lend out digital assets and earn yields (similar to earning interest)

·      trade - similar to the traditional financial system, digital assets can be bought and sold

·      derivatives - users can ta…