ELROND ♥ USE CASE
Decentralized Finance and the blockchain
DeFi projects use blockchain technology to enable the general population to access financial services. Regulatory institutions such as banks are bypassed with the help of decentralized applications and DeFi tokens.
DeFi and FinTech: What's the difference?
While FinTech digitizes the traditional financial world, DeFi refers to financial applications that are not subject to the control of a central player – such as a bank, stock exchange, or insurance company.
In DeFi, all participants follow the “rules of the game” of the blockchain protocol. For this, Smart contracts are the basis. The goal is to develope an open and efficient financial system for the general population.
DApps as a driver in the DeFi segment
A DeFi DApp runs independently of banks and is available around the clock. It can be used to map traditional financial services, such as lending or securities trading. Tokens are used for control.
DeFi is accessible to all the people
A bank account is required to participate in the traditional financial system. However, billions of people worldwide are thereby excluded.
DeFi opens the door to the financial market for everyone. The only requirement is an Internet-enabled device and a eWallet, such as Maiar, on which cryptocurrencies, such as EGLD, can be bought, stored, and transferred.
Investing in the DeFi segment
The growth of the DeFi segment is predominantly driven by investors who want to generate returns with their crypto assets, for example with staking. With DeFi DApps, even the most finance-savvy student can invest micro amounts in a financial product on the blockchain.
DeFi and the Elrond Blockchain
The application possibilities for DeFi projects are almost unlimited. The Elrond DeFi 2.0 module and the Elrond ecosystem already represent important use cases.
Blockchain & Lending
With the Elrond Lending module, participants can quickly and inexpensively access funds (collateralized) or can provide capital to generate returns.
The loan terms are fixed in the smart contract. The peer-to-peer network handles the loan transaction itself without the intervention of a bank.
Blockchain & decentralized exchanges
Decentralized exchanges (DEX) do not have access to traders’ assets and are therefore particularly secure.
‘Maiar Exchange’ uses the Elrond architecture to offer low-cost transactions between a growing number of (tokenized) assets to millions of people. Maiar Exchange is integrated into the Maiar app and can be used via any internet-enabled device.
Blockchain & Synthetics
DeFi allows investors to use cryptocurrencies to buy shares in assets such as commodities or gold without leaving the blockchain ecosystem.
This helps reduce the volatility of cryptocurrency holdings while leveraging the speed and security benefits of blockchain technology.
In staking, delegators make their EGLD tokens available to a validator (such as Istari Vision) for a freely selectable period of time. This secures and decentralizes the Elrond network.
As a reward, delegators receive rewards (interest income) in the form of EGLD and generate an attractive, passive income.
Stablecoins
Stablecoins are tokens whose value is linked to a fiat currency such as USD or other assets. This reduces the volatility risk of digital currencies.
Stablecoins are the first step in placing blockchain innovations in the traditional financial system.
The Elrond ecosystem includes many stablecoins such as Binance USD, European currency stablecoins, or algorithmic stablecoins from partners.
Blockchain & Trust
In traditional finance, escrow accounts are usually governed by banks and come with high fees.
With DeFi, the conditions required to release funds can be encoded in a smart contract. A central authority for control and settlement is no longer necessary.
The contract partners release the transaction themselves when the agreed conditions are met. The fees are minimal.
Blockchain & Marketplaces
Online marketplaces such as Amazon or eBay dictate the terms of trade to merchants and customers.
Via decentralized marketplaces (peer-to-peer networks) based on smart contracts, sellers can sell goods directly without intermediaries.
Advantages:
- Elimination of commission for marketplace operators
- Trade security, because the goods are only released when all contractual conditions have been fulfilled
- Data protection through elimination of fraudulent activities
More about the Elrond blockchain
Let us show you why we are convinced of the Elrond blockchain technology.
Functional Comparison
Elrond is a high-performance blockchain technology based on the proof-of-stake consensus mechanism. It was developed to eliminate vulnerabilities of other blockchains. Actually, we claim that Elrond is the best blockchain technology in the world.
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Advantages of the Elrond blockchain
Let's talk about Elrond and DeFi.
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References
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