DeFi, fully known as Decentralized Finance is run on smart contracts and agreements which helps to create a more decentralized world. It commonly runs on the Ethereum blockchain. The Ethereum blockchain take smart contracts quite seriously because it is widely used on the blockchain. Users can also use the smart contracts to create applications that will be used to earn income. Smart contracts do not need full supervision from humans because it is run by a programming language on blockchain.
DeFi has introduced many projects to the DeFi world. But most of these projects seem to last for a very short while before crashing. In order to change the current situation of DeFi, DEGO was created. DEGO is the future of the DeFi world.
PROBLEMS OF CENTRALIZED FINANCIAL SYSTEM
- Financial Adversity: The U.S. stock trade stopped trading 4 times in 10 days in the month of March in the year 2020. Battling with the global panic, the Federal Reserve was forced to take rash decisions on the market. This did not only lower the value of the U.S. dollar but prompted the butterfly effect. All the currencies of various countries relating with the U.S. dollar had to embrace another plan of action. The fiat currency present with the global people at that point was rendered useless. This situation is always experienced by a centralized government holding fiat currency when there is a financial crisis. We control money on the outside, but we don't have full control over it. The rise of Blockchain network and cryptocurrency grants the likelihood of dissolving this capitalist system in which the rest of the people are controlled by a few percent of the world's population.
- Capital Supremacy: Pareto's law makes it known that 20% of the people in the world controls 80% of the world's wealth. Data from charity Oxfam in 2019 makes it known that the total wealth of the 26 richest people in the world which is $1.4 trillion is equal to the wealth of 3.8 billion people in the world for just half of their total wealth. The unfair circulation of wealth between the rich and the poor is an unavoidable trend in the world. Capitalists share the wealth among themselves and control the development of markets to their taste. The ordinary people have no choice but to work for the capitalists and earn little income. The financial adversity is another way for the rich to become rich and the poor people to remain poor. Capitalists created the rules of the centralized financial system and manipulate them.
THE SOLUTIONS DEGO PROVIDES:
- DEGO Project aims to fully introduce decentralization and hand down the creation of monetary policies and allocation of currencies to algorithms. The direction of the currency can not be managed by any person or centralized body. Using this method, the financial system can finally get rid of corrupt and biased financial adversity.
- DeFi makes it possible for the financial system to go virtual. The DeFi world strips centralized bodies and capitalists from the top. Agreement and the market are the only factors that can control the direction of the DeFi world.
PUBLISHERS DETAILS :
Bitcointalk Username : Ebewah
Bitcointalk profile link : https://bitcointalk.org/index.php?action=profile;u=2835164