DeFi takes components of centralized finance and decentralizes them by removing middlemen and replacing them with smart contracts and tokens.

  • DeFi protocol creates monetary banking services (e.g., issuance of stablecoins)
  • It allows for the provision of peer-to-peer or pooled lending and borrowing services
  • It enables advanced financial instruments such as DEX, tokenization platforms, predictions markets, and derivatives.
  • As at the time of writing, the total value locked (TVL) across all DeFi protocols was valued at $4.46 billion. The top 5 DeFi protocol accounts for more than 80% of the total liquidity as MakerDAO pulls about 30% dominance, with a historical $1.3 billion locked in the Maker platform alone.

    It’s intriguing to realize that DeFi protocols lending platforms have focused largely on the cryptocurrency sector, it could be fascinating to see the DeFi market tapping into the traditional market, providing lending services to individuals, businesses, and enterprises outside of the cryptocurrency landscape. This is part of the narrative Ducato protocol is bringing to the DeFi space.

    With the aid of smart contract technology, the DeFi app has an unending potential to replace a handful of custodial banking functions. DeFi protocols are written in code and executed by a smart contract, which eliminates the need for a custodian.

    Once the contract is deployed to the blockchain, a DeFiDapp can run autonomously without the need for human or third-party interference, asides the occasional upgrade or improvement to the Dapp.

    The advantages of DeFi is far-reaching as it solves most of the challenges rocking centralized finance as we know it. The code is usually open-source and transactions are recorded in a public ledger which allows for easy audit and transparency.

    Interoperability can easily be achieved with DeFi, making it possible for platforms to connect with decentralized exchanges, and other stablecoins to form a larger ecosystem of products. Additionally, fast settlement time and the low transaction fees continue to distinguish the DeFi protocol from centralized finance (CeFi).

    This trend is still gaining momentum, and heightened stablecoin issuance on the Ethereumblockchain has also perpetuated it. As the ecosystem expands, new players like Ducato protocol are already getting into the industry niche with more innovative products that could add a lot of savor to the DeFi ecosystem.

    DeFi could be taking a new shape as Ducato launches a hybrid protocol designated as DeFi 2.0. A protocol that combines decentralized and centralized financial services. By combining both protocols, the platform can dip into the traditional market thereby servicing the DeFi market with deep liquidity and consequently providing room for a wide range of traditional assets to be used as collateral.

    On the flip-side, the decentralized platform enables lenders and borrowers to carry out financial services in a more secure, transparent, and automated environment with the aid of Ducato smart contract technology.

    Ducatotaps into the traditional CeFi market with official family company Delio, global suppliers of financial services who provide surplus liquidity to the Ducato protocol and also would be utilizing the Ducato hybrid DeFi platform. This is a win-win situation for Ducato and Delio.

    (Excerpt) Read more Here | 2020-08-12 12:15:00
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