What is DeFi and how Quarkchain will improve it

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          Decentralized finance (DeFi) has been the latest buzzword in the crypto industry for some time now, and is growing steadily. While many have heard of DeFi, not many know what it entails or how it differs from the traditional financial industry that has been around for over a century.
In traditional finance or centralized finance, people transfer control of their assets to banks and other financial firms so that professional managers can use funds wisely in the markets. Their logic is that they will make higher returns than the average person and therefore those who put their money in will benefit as well.
However, the main problem is that having a centralized system means that the risk is also concentrated in the center. While bankers can be skilled and experienced, they are not perfect and can be wrong as well. An example is the 2008 global financial crisis caused by the US housing bubble.
On the other hand, decentralized finance means that people retain ownership of their assets and have complete autonomy over them, rather than transferring them to a central system.
With this in mind, DeFi solves a fundamental problem associated with the traditional financial industry while increasing its efficiency.

          DeFi is financial instruments in the form of services and applications built on the blockchain. The main task of decentralized finance is to become an alternative to the banking sector and replace the traditional technologies of the current financial system with open source protocols. That is, open access to decentralized lending and new investment platforms for a large number of people. And let them receive passive income from crypto assets, as well as save on fees for transfers, loans and deposits.
The argument for decentralized finance (DeFi) has been made even more pressing by allegations of misuse of funds against a centrally controlled cryptocurrency.

Noting the high potential of DeFi, the Quarkchain team is currently working hard on its DeFi product, which will soon be presented to the public. This product will offer improvements to DeFi due to the unique features of Quarkchain technology.

DeFi advantages and disadvantages

          Despite the fact that the decentralized application sector is just developing, there are already quite a few benefits. The main thing is that any user can get one or another financial service, for example, lending, bypassing the bank. Decentralized landing protocols minimize risks and open access to borrowed funds 24/7. New products are especially relevant for borrowers from countries with expensive bank loans.
The procedure for creating your own digital asset and its introduction to the market has become noticeably easier and has become available to almost everyone. Payment processing does not last for several days, but a maximum of a couple of hours, interest rates and commissions have become much lower. Also, users have new ways to make money on cryptocurrency.
For developers, the simplicity of creating applications becomes a clear advantage due to transparency and open source, in addition, projects in the decentralized finance sector can be developed on any platform that interacts with smart contracts.

Of course, DeFi is not without its drawbacks:

1. Since most DeFi projects are built on the Ethereum platform, they are not very suitable for high-frequency trading as they are limited in terms of computation speed.
It is this problem that Defi Quarkchain product can solve, since the computing speed in the Quarkchain network is about a thousand times higher than in the Ethereum network.
2. Due to sharp jumps in the load on the Ethereum network, transaction fees can rise sharply, making high-frequency trading less affordable. Thanks to the use of Quarkchain technology, commissions will be much lower, which will allow you to trade more often.

          Summing up the above, we can conclude that DeFi technology is very promising and necessary. However, at the moment it is at an early stage of development and has a number of problems, including those related to the Ethereum network. Quarkchain's DeFi solution aims to eliminate them and make DeFi technology better.