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Everyday technology reforms in the finance industry have simplified the ways of validating transactions, without involving any intermediaries. The traditional approach of performing the tasks has been eliminated by Blockchain and has made us enter an architecture that is more independent and credible.
In the current times, DeFi, also known as Decentralized Finance, has emerged as an open finance innovation.
According to DeFi Pulse, the total value locked in decentralized finance on 18 August 2022 is $37.25b. It means that budding entrepreneurs, start-ups, and well-established businesses can enter this industry by learning how to build a DeFi app and earn profits from it.
DeFi is basically a term used for conventional processes that have shifted to decentralized blockchain networks. The DeFi concepts resemble cryptocurrencies but have a wider scope compared to them. DeFi aims to eliminate the role of intermediaries and wants technology to occupy the center stage. One can procure the benefits of a DeFi by developing feasible DeFi application solution and widen his earning prospects in the years to come.
DeFi apps are the modern tech resources that help us deliver financial services via decentralized computing.
These apps help users access funds and perform several actions like buying, selling, lending, borrowing, purchasing insurance policies, and much more. Smart Contracts are a significant part of DeFi dApp development to make the tasks bug-free and smooth.
There are significant differences between decentralized finance and traditional finance. Here is the list of parameters that distinguishes DeFi from traditional finance:
DeFi economy is independent as it involves no regulatory body, and it ends financial bureaucracy. The data is shared with the users directly through the distributed system of Blockchain. A DeFi app development company can develop these applications for you and eliminate human intervention.
Those with an internet connection can access DeFi services. You may even install a DeFi app on your smartphone. Decentralization helps us create independent service resources.
DeFi apps work in combination with other blockchain networks and have excellent compatibility with other applications.
DeFi apps enable the users to carry out transactions in real-time. While investing, interest rates will be automatically updated quickly.
DeFi market is thriving and is stretching its arms across other applications. As on 18 August 2022, the total value locked in DeFi is $37.25 billion. On 14 August, the total count of people using DeFi was 4,872,226.
It’s clearly visible that investors are showing deep interest in DeFi marketplaces, but their only concern is no one will take responsibility in case the financial crime occurs on a borderless yet encrypted platform like DeFi.
DeFi App Statistics
According to the dApp Radar list, 11,974 apps have been tracked across 48 protocols. It means that more and more businesses are entering this Billion Dollar DeFi industry by hiring experts who know how to build a DeFi app. Whether you are a start-up or a well-established business, you can unleash your earning potential by entering this segment.
DeFi applications are decentralized and independent and help to execute a variety of operations. The main aim of DeFi is to find reforming alternatives for traditional finance processes. Let’s have a look at the practical applications of DeFi listed as follows:
Stable Coins are related to stable or possess near stable volatility. Cryptos offer high volatility that impacts most investors and makes them ponder before investing. These are pegged with the assets, which makes them a revolutionary crypto entity in the market.
Tokens are minted on existing Blockchain, where they generally take the name of a native Blockchain. These are pegged to assets like Gold and fiat currency.
Certain cryptocurrencies require central authorities like a digital wallet. The key is in the hands of the wallet while crypto exchanges are taking place. The third party is still an intermediate in a distributed and decentralized architecture.
The DeFi wallet holds the cryptos and keeps the private keys. You cannot ask for new keys if you have lost the old ones that were possible with passwords.
Mining or yield farming uses cryptocurrencies to provide liquidities. Trading activities are generally controlled via Automatic Market Maker. Users swap tokens to trade cryptos within the liquidity pool and earn passive income.
Users can trade cryptos without any involvement from third parties. These apps use smart contracts to carry out direct and peer-to-peer trading.
Lending and borrowing are two common finance processes. The wallets deploy smart contracts so that both lenders and borrowers have to agree with the conditions.
Insurance adopts a risk or profit sharing mechanism. Insurance protects crypto investors from the risks related to it.
You can only thrive in a DeFi market with a competitive and innovative approach. Know the competitors to get an idea of what’s happening in the market. Also, Let’s have a look at the top 7 DeFi apps:
Uniswap was introduced in 2018 and is a decentralized crypto exchange platform. This decentralized application solution is integrated with smart contract functionality, also known as Automated Market Makers(AMM). It helps determine token prices by analyzing the liquidity of the involved tokens.
Maker is a decentralized credit platform that works on a collateral-based mechanism. On 18 August 2022, the market cap of Dia was $7,187,656,620, and 24 hours volume was $436,004,418.
Aave is a decentralized liquidity protocol. It has a feature safety module which is basically a liquidity pool that allows more investors to invest in tokens and contribute to enhancing the platform’s overall performance.
The curve was launched in 2020 as a decentralized exchange platform that supports stability. This platform gives you the chance to trade tokens at low fees, and slippage also accommodates liquidity pools.
Convex Finance rewards both CRV token holders and liquidity providers. Users can deposit and exchange their CRV tokens with cvxCRV tokens.
Flexa is a decentralized payment system that allows payments via ERC20 tokens, Stablecoins, and reward points..It involves dozens of currencies and processes the payments quickly and promptly.
If users want to trade quickly, securely, and transparently, they can register themselves on a non-custodial decentralized exchange platform dYdX. This application works on smart contract functionality and eliminates central intermediaries from its process.
You can create seamlessly performing applications like these decentralized application solutions with the guidance of technical experts and enrich the experience of the users.
Now that we have got an idea of the trending dApps it’s time to understand the integral components of DeFi app development in detail:
Currency is a crucial component of the application of finance. You can create your tokens or can combine them with existing coins or tokens to facilitate support, exchange, or other operations.
One can store private keys and perform different operations using wallets. Integrating your crypto wallet into a DeFi platform ensures that the transactions are authentic and secure. Even browsers and applications interact directly with the wallet like Metamask, trust, etc.
Smart contracts are the codes that involve self-execution. These codes execute once the transaction conditions are met. You can create rules and regulations to derive smooth performance from your dApps.
DeFi users interact with the front-end applications that further interact with the backend APIs. Finally, you get an attractive UI/UX that helps the users to access all the functionalities of a DeFi app.
Backend Integration helps us integrate both backend and front-end applications into Blockchain.
It is necessary to test DeFi apps before launching. Check the codes of smart contracts to verify their functionalities. It can be done by using testnet. Remember, once a faulty smart contract is deployed on the mainnet, it can’t be modified later.
Deployment of DeFi app is the final process, which means that the app is made available for users on the App Store and Google Play. Maintenance is an ongoing process, which includes regular updates.
Traditional Finance demonstrated significant growth but hasn’t replaced the central authority. On the other hand, decentralized finance uses technology to eliminate the need for intermediaries, as they are made fully functional via smart contract development techniques. DeFi apps have shown tremendous growth, as the masses are keenly tending towards DeFi dApp solutions. It’s expected that DeFi apps will become a common thing in the next few years.
Antier: Providing Scalable and Secure Decentralized Application Solution
Whether you are a start-up or a well-established business, Kickstart your dApps development journey by obtaining decentralized application solutions under the guidance of experts at Antier. They will understand your business requirements and develop applications to help you leave a long-lasting impact. Unleash your earning potential and streamline your DeFi dApp development journey with the assistance of the leading company.
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