Here’s How DeFi Helps You Grow Your Cryptocurrencies
Decentralized finance is the latest fad in the cryptocurrency and blockchain space. Many even compare it to the extreme hype around initial coin offerings (ICOs). The total funds locked in DeFi protocols has increased from $1 billion in the first week of June 2020 to almost $8.4 billion at the time of writing — signifying an 8.5 times growth in just four months.
But unlike most ICOs that ultimately failed in a few months due to the lack of any valuable products, DeFi protocols have shown exceptional performance and acceptance in the community. People are not blindly investing their funds in DeFi lending and borrowing protocols. They’re making a thoughtful decision as DeFi offers safer investment alternatives.
What is DeFi Lending?
The second-largest blockchain platform Ethereum introduced the concept of DeFi and DeFi lending. DeFi lending and borrowing protocols use smart contracts to sanction loans to borrowers without the need for an intermediary, as is required for financial institutions.
The smart contracts managing the lending and borrowing protocols for sanctioning loans attain the funds from lending pools. These lending pools are funded by cryptocurrency holders whose funds would otherwise be sitting idle.
Companies and individual who are looking for instant loans then borrow the funds stored in the crypto pools.
DeFi lending has gained rapid adoption by crypto users due to the higher interest rates it provides as compared to storing funds in one’s bank accounts.
Borrowers, on the other hand, prefer to use DeFi lending as it acts as a source of instant loans. With banks, one has to go through a lengthy process to attain a loan. On a DeFi protocol, however, anyone can get instant access to any amount of loan within minutes if they can stake enough collateral for it.
How Hybrid Bank Makes DeFi Lending More Safe and Easy?
Hybrid Bank acts as a decentralized bank on the blockchain. Although funds on many DeFi protocols are not insured, Hybrid Bank will insure all digital assets locked under depository products. This will help users rest assured about their funds safety as they earn interest through DeFi lending.
Many major exchanges from all around the world will also become affiliate partners of Hybrid Bank. This will allow millions of users to sign up for deposit products without having to create any additional accounts. They will also enjoy higher interest rates for lending their funds through Hybrid Bank.
For further safety of Hybrid Bank users, the blockchain contracts on the platform will be notarized by law firms that have the consular certification of the embassy. The contracts will thus be internationally accepted.
In addition to that, Hybrid Bank along with its blockchain partners will also monitor whether or not the borrowers are using the sanctioned loans according to the purpose stated by them.
All these combined will create a highly secure, scalable, and easily accessible lending and borrowing system for cryptocurrency users.
