How are smart contracts used in DeFi?

• • Real-time execution

Whether it is Ethereum or Tron smart contract software, the code automates the tasks that are generally accomplished through manual means in traditional finance. Thus, smart contract brings real-time execution to all kinds of business and financial processes.

• • Transactional Accuracy

With the automation of transactions, the chances of manual error are reduced.

• • Risk elimination

Traditional financial set-ups are prone to the risk of manipulation. However, the use of smart contracts in DeFi almost eliminates any risks related that can be injected into the system due to manipulation.

• • Reduced Intermediaries

Smart contracts act as legal contracts between two parties. Thus, the need to depend on intermediaries is almost eliminated from the system.

• • Lower cost of operations:

The Smart contract development services design smart contracts in a way that the DeFi apps and processes require minimum manual intervention and intermediaries. This reduces the cost of operations.

1. 1. Financial services

In financial services, smart contracts can be used for:

a) Trade clearing and settlement:

The Tron smart contract software can manage the workflow between the smart contract counterparties. It can also calculate the trade settlement amounts and as soon as the terms of the contract will be met, the funds will be transferred instantly.

b) Coupon payments:

The smart contract designed to make coupon payments will automatically make periodic payments and as soon as the bond expires the principal will be returned.

c) Insurance claim processing and micro-insurance

Smart contract development services can design smart contracts to perform automated error checking, routing, pay out calculations and pay out processing.

Other areas where smart contracts are used in Decentralized Finance (DeFi) are margin trading, stablecoins, derivatives, lending and borrowing.

1. 1. Tokenization of real-world assets

Smart contracts enable the tokenization of real-world assets. The real-world assets are synthesized on a blockchain and the smart contracts enable the trading of these tokens and keep track of the exchange rates of these tokens.

1. 1. Betting decentralized Applications

The betting industry has a bad name because the traditional betting industry is prone to heavy manipulation. Tron smart contract software finds a strong use case in decentralized betting applications. Using smart contracts, the apps can automate betting odds, bet settlements, and transactions. Without any intermediaries, these transactions can be completely trusted.

1. 1. Gaming Apps

Gaming Apps often use lucky draws or lucky drops. To enable this, smart contracts enable Verifiable Random Functions. These enable trustless lucky draws.

1. 1. Prediction Markets

Tron smart contract software and data oracles can work together to relay real-time information to the prediction market apps. This real-time data could be crypto market movement, sports results, or more.