Why will the banks disappear soon? And what will replace them?

Imagine that there is a virtual library. There is no librarian in it, and visitors come up with their own rules. When someone takes a book, they know exactly when they need to return it, and they can't move the deadlines. Data on all books and activities is automatically available to all library users. Once the rules have been invented, they cannot be changed. Such a library can be called a DeFi system.

DeFi or decentralised finance is a system of services and applications where any financial transactions can be carried out. DeFi is independent of the state and other regulatory bodies, which means that neither banks nor courts can influence it.

The DeFi system works through special decentralised applications (Dapps) and is based on blockchain technology. The system is controlled via smart contracts. The terms of such contracts are chosen by the users. A smart contract is a code that specifies all terms and conditions of the transaction. Once activated, such a contract cannot be changed or deleted unless it's stated in the code in advance. There are no middlemen in Dapps. The "intermediary" is the smart contract itself, makes sure that all terms and conditions are strictly followed.

The DeFi system has DAOs, which are decentralised autonomous organisations and are completely independent. Since DAO is autonomous, it precisely fulfills all the functions specified. Users who carry out financial transactions within DAO manage them themselves. The rules can be extended depending on what users want from the organisation. The rules are recorded in smart contracts, and the users of the service make decisions by voting with tokens. A token is a "security" in the digital world.

Decentralised finance is already used in the following areas:
Financial analytics
Decentralized exchanges
Insurance
Proof of identity
Crediting and Borrowing
Stablecoins (cryptocurrencies related to other assets)

️ DeFi-based applications will be used everywhere in the future. DeFi-operations are becoming safer and more transparent as they are controlled by ordinary users through smart contracts, rather than by financial institutions. Users don't have to worry about the safety of their money as they will reach the recipient, and the terms of the transaction will not change. DeFi is the future that is already coming!

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