DeFi Growth, Applications & Risk factors
Decentralized Finance is encompassing the vision of a financial system that can function without relying on any intermediaries. The core concept that makes up the most of the DeFi is decentralization, as no single party is in full charge, so it’s almost impossible for someone to change the rules that govern the assets in the world of DeFi.
The growth of DeFi in terms of active users has been explosive, exceeding 2.1M unique addresses that have interacted with Ethereum DeFi in some way since early 2018.
One of the vital applications of DeFi is governance. Tokens issued in connection with liquidity mining or related mechanisms often provide governance rights for the DeFi service.
Token-holders can vote on proposed changes to protocols, or on defined parameters such as interest rates or collateralization ratios.
DeFi protocols generated revenue of almost over $4.5 billion USD for its users and token holders.
Another Application is Lending/Borrowing, you can get a loan with just one click, at any point in time. You can access the market from anywhere and anytime as long as you have an internet connection.
People can now make unique digital assets like collectibles/art, termed as NFTs on different blockchains that support smart contracts. All the NFT data is stored on the blockchain via smart contracts, Ownership of these tokens is immutable, which means NFT Collectors actually own their NFTs, not the companies that create them.
NFT Trade volume is seeing a dip currently from the last few months but if it’s compared to year 2020, the market is still 4–5 times bigger than what it was in 2020.
DeFi also has several risks, Smart Contracts deployed on robust blockchains still aren’t 100% secure, as they can still be exploited by hackers to drain all the funds from the contract if they contain any bug.
Despite major efforts to reduce the risks by devs, DeFi fraud still remains a widespread aspect of the growing space. According to the data, The first half of 2022 brought almost double the volume of DeFi hacks and fraud compared to 2020–21 altogether.
A lot of products in the defi space are partially centralized, as they are managed by certain centralized entities which control most of the governance.
Losing Private keys is another risk factor in the defi space; Missing your defi wallet’s key means losing your funds. It’s almost impossible to retrieve the private keys.
One of the most important drawbacks is the complex user interface of most of the defi protocols which makes it difficult for users to join the defi space.
As we move forward with defi, a lot of new developments will take place. Stuffs which are termed as problems today will be the seeds for new products that will do wonders in this space.
We at Slick Wallet aim to provide solutions to few of these problems :
- Starting by simply redesigning the UIs & providing a smooth User Experience to users for most of the top defi Protocols.
- Providing feature to ensure that you can retrieve your wallet even after you lose your seed/private keys.
- Slick Wallet is fully decentralized, we don’t have access to any of your private keys.
- We give you an option to remove spam tokens so that you don’t end up with phishing attacks.
& a lot more feature that most other DeFi Wallets don’t have, of which one is the buy/sell access for NFTs listed on OpenSea without leaving the app.
