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Crypto lending, DeFi and Investments: Are banks soon to be a thing of the past?

Brand Voice
·4 min read

The cryptocurrency demand is rising, the bitcoin rate is going up, and the niche is gaining more and more attention. With the encouragement of opening up a larger variety of possibilities, we have seen how far cryptocurrency can go. The most important ones for us are DeFi (decentralized finance) and crypto lending. Why is this so relevant now?

Cryptocurrency: The future of ecommerce?

This fall, we’ve seen a dramatic rise in cryptocurrency value. This is due to the increased participation of the big institutional investors in the crypto industry. The high price remains constant, although the further correction will only demonstrate the predictability and strong longevity of cryptocurrency would not be withdrawn. Such a growth reveals a promising future ahead of the digital currency and proves once again that investing is definitely worth it.

The best of the two worlds of the digital finance – Hybrid solutions

Online lending and internet banking are being replaced by the well-established Crypto Banking Niche. The market simply replaced fiat lending facilities with cryptocurrency banking like DeFi – the new representative that has quite recently appeared in the niche.

DeFi is an open financial infrastructure with crypto-friendly facilities. Many experts say that DeFi can show the hidden cryptocurrency potential. Yet DeFi weaknesses such as transparency, scalability, uniformity should not be refuted:

Most DeFi projects have an open source-code, which makes them hackable.

Smart contracts throughput is very low and almost impossible to scale.

In general, smart contracts are not created anew. Contract templates are open source and regularly revised, leading to glitches and mistakes leading to financial failure.

The “hybrid” financial systems entered the industry not too long ago. These are essentially unified platforms running with their own technology and solving the problems of conventional cryptocurrency banking and DeFi services:

Third parties, hackers, and security vulnerabilities are no more with the closed source.

The service infrastructure operates without smart contracts; any expansion is a component of the structure.

The software is produced afresh and is subject to continuous testing.

BitcoLoan is known as one of the most popular hybrid service providers. It gives its clients not only opportunities to lend in cryptocurrency but also to invest in cryptocurrency loans.

Crypto lending Investments

The stock market is now very volatile due to the global financial crisis. Many businesses have ceased their operation; catering and hospitality industries have deteriorated or are at risk of shutdown. It is merely impossible to find a safe investment option at times like these.

Investments in crypto lending are made through DeFi and consolidated networks. Given its high significance, such an investing approach is currently very common with all investors around the world, provided the criteria are met. Low access hurdles, decreased risk and resilience are just beneficial.

In the process, these facilities serve as an intermediary between both parties, the lender and the borrower. They appeal to investors who will only need to top up their account and do nothing extra to make a transaction. No delays in funds withdrawing for borrowers is also quite engaging.

Is crypto banking insured?

One of the good things that crypto lending inherited from conventional banking is an insurance scheme. Such a tool sees to the client’s compliance with the rules and helps in making some extra money. The BitcoLoan platform users, for example, invest right in the company’s insurance fund. By doing so, they ensure their compliance with the terms and generate profit for all investors on the platform. Such a way of funds allocation makes for a safer investment environment and should encourage even the most distrustful investors.

Why should more credit be given to hybrid financial systems?

A bunch of emerging innovations, including DeFi, have captured users’ trust too early, as experts from the cryptocurrency and IT sectors pointed out. In reality, in 5-7 years from the mass adoption, such a financial model would only unleash its potential.

Hybrid platforms like BitcoLoan only use validated crypto banking strategies when developing solutions to fix the identified issues. Therefore, the “testing period” of these innovations is shortened considerably. Regarding clustered hybrid systems, these services are now on the verge of mass adoption and make for a safe place to invest in at the times of crisis.

(Syndicated press content is neither written, edited or endorsed by ED Times)