In the recent past, decentralized finance (DeFi) has been a gamechanger for the blockchain space. It has allowed users to have complete control of their assets. Its open-source protocols have provided an avenue for developing new financial products and projects within secure networks.
Because of DeFi’s complexity, countless people have been hesitant to use the technology, leading to slow mass adoption rates. Cryptocurrency marketplace Earnity, helmed by Dan Schatt and Domenic Carosa, is set to launch a safe and intuitive crypto platform that will make it easy for users to learn about DeFi and crypto-related products.
Some of the most common types of DeFi products and services are listed below.
Borrowing and Lending: Borrowing and lending allow users to borrow crypto assets from other users by providing another token as collateral. The lender accrues profits through the interest paid. It behaves the same as traditional lending institutions, but the difference is that DeFi has no intermediaries.
Derivatives: A derivative is a financial contract between two parties that derives its value from an underlying asset. In other words, derivatives are instruments that allow crypto buyers to hedge their risk or make profits based on changes in the underlying asset’s price. Examples of DeFi derivatives are asset-back tokens and decentralized oracles.
Insurance: In the DeFi space, there are products that manage risk in different ways. One of them is DeFi insurance, which provides a way to protect digital assets from an unexpected loss or theft. By pooling funds from multiple participants, DeFi insurance essentially creates a form of mutual insurance that can help users recover from a devastating loss.
Domenic Carosa and Dan Schatt of Earnity believe that DeFi should be about access and aim to break down the barriers that hinder people from participating in the DeFi space. The company looks to build an open and accessible crypto community where users can learn about DeFi and its applications.